Pros and Cons of Aging in Place

For many retirees, the idea of covering medical expenses later in life is a top priority for both personal and financial reasons. No one wants to exhaust their nest egg prematurely and become a burden on their loved ones.

We frequently talk about the idea of self-insurance or obtaining a Long Term Care (LTC) policy as part of the retirement planning process. Unless you’ve had an experience with a family member, it’s possible that you are confused about what it would look like in practice.

Specifically, would you prefer to age in your home or transition to one of the retirement communities? If we set the financial aspects aside, there are several considerations for you to keep in mind. I’m also sharing some brief examples of actual decisions and circumstances that came from working with our clients.

Here are some of the pros of aging in place.

Independence & Comfort

Staying at home means keeping control over daily routines and personal space.

The majority of retirees, regardless of their age, prefer to stay at home for as long as possible.

One of my clients, who is in her mid-80s, loves gardening. This is something she wouldn’t be able to do in most retirement communities.

Cost-Effective Compared to Retirement Communities 

In many cases, it can be more cost-effective to age in your home. 

If you have no mortgage and need to make only minor modifications to your house, this can be the right decision for you.

One of the retired couples I work with lives in a single-level home and it cost them only $75,000 to make it retirement ready. 

At least initially, when you are able to drive and potentially need some assistance at home for a few hours a day, this is likely to be a good option for you.

Emotional and Social Benefits

If you’ve been living in your neighborhood for many decades, you will likely enjoy the comfort of knowing your surroundings and your neighbors.

The idea of “naturally occurring retirement communities” (NORC) has been around for several decades and will likely become even more popular in the future.

For those of you who are less familiar, NORC refers to a community or neighborhood where a large proportion of residents have aged in place over time.

They often include supportive services like transportation, social activities, and healthcare programs to help seniors maintain independence.

There are also important issues that need to be addressed if you decide to stay in your home.

Home Safety & Accessibility Challenges

Many homes aren’t designed for aging adults which can make daily tasks risky.

One of my clients fell on the stairs and broke her pelvis. She had to spend several months in a wheelchair and wasn’t really able to return to her normal life after the accident.

Once you do the analysis, you may realize that making your multi-level home retirement ready may not be possible or cost-effective.

This frequently leads to a decision to transition to a retirement community. Ideally, you would want to understand your options and plan ahead of time.

Increased Need for Support & Care

As you continue to age in your home, you will likely need more support over time. 

I recently had a meeting with one of our clients, who is in her mid-80s and requires a lot of assistance to stay in her home.

We project her 2025 expenses to remain in her home to be almost $260,000 or over $710 per day.

This figure does not include her other living expenses.

I’m not exaggerating to make a point. These are the actual numbers and a crucial part of your retirement distribution strategy.

Transitioning to a higher-quality retirement community can be expensive, but in many cases, it will actually be lower when compared to the cost of aging in your house at a later stage in life.

Social Isolation & Limited Mobility

Once you begin to experience mobility issues or even stop driving, you may find yourself lonely and isolated.

One of my clients used to be an active member of a local book club. I even attended one of his presentations several years ago.

Ever since he stopped driving, his daily routine shrank to watching TV and walking around the neighborhood.

He eventually moved out of state to live with his children, which turned out to be a much better option for him. 

What does this mean for you?

As a financial planner, I encourage you to have a plan that accounts for your later-in-life expenses to ensure you are comfortable.

I also suggest that you to explore your options even before you need them. There are solutions for almost any budget or preference.

Please also understand that many modern retirement communities offer dramatically different services than the “facilities” or “nursing homes” of the previous century.

At Capital Squared, we partner with many professionals who are dedicated to serving the senior community and would be happy to point you in the right direction if you ever need some help.