The United States is aging, and fast. With roughly 10,000 Americans turning 65 every day, we will have more seniors (those over 65) than children (those under 18) by 2035, according to the U.S. Census Bureau. The Census Bureau illustrates this demographic shift succinctly with this graph showing how Americans’ age distribution is shifting from a pyramid to a pillar.
About 90% of seniors over age 65 say they want to continue living independently at home, according to a series of studies conducted by Clarity and the EAR Foundation since 2003. And despite 53% of seniors worrying about their ability to age in place, many seniors fail to properly prepare while they’re still healthy.
And seniors aren’t the only ones who are concerned. The same series of studies found that 82% of baby boomers worry their aging parents would be mistreated in a nursing home, and 89% worry they would be unhappy. But boomers are also increasingly retiring themselves, and caring for an elderly parent is no small feat.
Fortunately, it’s easier than ever to age in place. If you or your parents are worried about the costs and logistics of aging in place, try these tips to do it on a budget without sacrificing safety or quality of life.
What Is Aging in Place?
Choosing to age in place means continuing to live in your own home, rather than moving in with family members or moving into an assisted living facility or nursing home. It’s easy enough for healthy older people, but it gets trickier when and if your health starts failing. From blindness to dementia, seniors are subject to a range of ailments that can make it difficult to live independently.
Retirement planning doesn’t end with saving a nest egg. Part of preparing for a healthy, happy retirement involves planning for a physical and possibly cognitive decline, even though it’s the last thing anyone wants to think about.
How to Age in Place on a Budget
If you want to age in place, here’s exactly what you need to do to prepare while you’re still fit and healthy.
1. Choose Your “Forever Home” With Care
The house where you raised your children is probably a bad candidate for aging in place. In all likelihood, it’s too big, too remote, and has too many stairs. That means you should start looking for your “forever home” while you’re still healthy, because finding a home, moving, and settling in takes work.
Consider the following as you decide where to settle for the rest of your life.
Stairs become a challenge at a certain age due to joint pain, muscle deterioration, and the risk of falls. Sure, you don’t think twice about them in your 60s, but that changes for most adults in their 80s, so plan for it now.
After my mother-in-law retired in her late 60s, she bought a semi-detached two-story. It’s not much smaller than her previous house, but the layout is very different. The master suite is on the first floor, so she doesn’t have to walk up stairs to reach her bedroom and bathroom. The home has a second floor containing two bedrooms, a full bathroom, and a second living room – perfect for visiting children or younger housemates; her son currently lives on this floor.
Driving is no big deal at 70, but what about at 90? Plan for life after driving long before you actually sell your car.
The ideal forever home sits within easy walking distance of groceries, dining and entertainment, a pharmacy, and ideally, a health care facility. Perhaps most important of all, it’s also within walking distance of peers, friends, and acquaintances.
Quirky young adults aren’t the only ones who can benefit from living in a walkable town and ditching their car. Long before driving becomes a safety concern, it’s still expensive to own and maintain a car. According to the most recent AAA study of car ownership costs, it costs an average of roughly $9,000 per year to own a car, with all expenses included. As a retiree, that $9,000 could make a big difference, so you may find it’s easier on your budget to ditch the car in favor of walking, ride-hailing, and public transportation.
Access to a Senior “Village”
Across the United States, there are hundreds of senior “villages,” or networks of older adults living close to each other, within existing communities. They band together for friendship and to share costs such as the full-time employees who service village members. These employees provide services from housekeeping to medical care.
One early village, the Beacon Hill Village in central Boston, began enrolling members in 2002. The village now has over 400 members living in a cluster of neighborhoods in central Boston and employs seven people to service its members. The members organize social events and outings, coordinate with local health care and other organizations to arrange services for members, and look out for each other.
You can read more about the rise of the village movement for seniors at Home Health Care News.
Cost & Maintenance
When you’re an empty-nester and retiree, will you really need to live in a 3,000-square-foot, four-bedroom, two-story suburban home on a half-acre of land?
Downsizing not only helps reduce your housing costs, but it also reduces maintenance needs, lawn care and landscaping, and general upkeep. Yes, the house where you raised your children has fond memories and sentimental value. But by reducing your housing costs, you can also reduce the amount of money you need to save for retirement.
The “Granny Flat” Option
Another option to consider for aging in place is a “granny flat,” or accessory dwelling unit, with one of your children.
A granny flat is a separate, self-contained living unit with its own entrance, kitchen, bathroom, bedroom, and living space. It’s on the same property as your children’s house, so you can visit each other as frequently (or infrequently) as you like, and they can check in on your health periodically.
It’s also potentially a lot cheaper than buying a new home or moving into a nursing home.
2. Retrofit Your Forever Home
Once you’ve chosen your forever home, it’s time to make a few modifications to make it safer for an older adult.
Falls are the leading cause of injury and death among seniors, according to the National Council on Aging. That means that fall prevention becomes a top priority when retrofitting your forever home.
First, install non-slip pads and handlebars in the shower. Both are cheap and easy to install. Consider going a step further to make your shower “step-free,” removing the tub to create a walk-in shower.
If you have a step or two at the front door, make sure you have a handrail next to them. Eventually, you can replace these steps with a ramp, but that’s not a decision you need to make immediately.
Because grip strength declines in older adults, make doors easier to open by replacing doorknobs with levers.
You can also price out widening doorways on the main level to accommodate wheelchairs and walkers, although that may never be necessary. Read up on more home remodeling tips and ideas for aging in place.
3. Buy in Cash or Pay Off Your Mortgage
As adults get closer to retirement, they should increasingly shift their investments away from high-risk, high-volatility assets like stocks and toward lower-risk assets like bonds. That’s because the risk of a market crash early in retirement, known as sequence of returns risk, can be ruinous for retirees.
The ultimate low-risk investment, however, is paying off your debts.
If you have unsecured debts, it’s a no-brainer to pay them off rather than invest the money elsewhere. Even low-interest car loans and mortgages typically make sense for older adults to pay in full. Or better yet, skip the expensive mortgage fees altogether and buy your forever home with cash.
Think about it. If low-risk bonds are returning 4%, and your mortgage interest rate is 4%, there’s no reason to accept any risk whatsoever from bonds when you could simply pay off your mortgage and get a guaranteed 4% return. The return on U.S. government bonds is typically lower than the interest rate charged by mortgage lenders, making the decision even easier.
Rather than trying to earn a little more income from your investments, lower your living expenses by paying off your mortgage early.
The Real Estate Contingency Plan
Imagine you sit down with a financial advisor, and you ask how much money you can withdraw from your nest egg every year. The financial advisor explains the notion of safe withdrawal rates: what percentage of your portfolio you can safely sell off each year without the risk of running out of money before you die.
But financial advisors for retirees typically base their recommendations on the worst-case scenario. They aim for zero risk of running out of money, so the amount they say you can safely withdraw is extremely low.
Let’s say you have a $1 million nest egg, and you anticipate living for another 20 years. Retirement planning professor Wade Pfau illustrates how a portfolio of half stocks, half bonds has a 99% chance of surviving for 20 years if you withdraw 5% of it every year, a 79% chance of lasting 20 years if you withdraw 6% every year, and a 62% chance of lasting 20 years if you withdraw 7% every year.
Common wisdom from your financial advisor would be to only withdraw 5% per year, or $50,000 in this example. But you could withdraw more – say, $60,000 to $70,000 per year – and still have strong odds of never running out of money.
To mitigate the additional risk, the key is having a backup source of income, something you could turn to if your portfolio performs poorly and you start worrying about running out of money. This is when it helps to own your home free and clear; it will give you a contingency plan to take out a reverse mortgage to generate extra income if needed.
It’s one more reason to pay off your mortgage before you retire.
4. Consider Home-Sharing
Young, single adults have spare time and plenty of vitality to go around. What they often don’t have is thousands of dollars a month to rent a one-bedroom apartment.
Enter: home-sharing, in which an older homeowner rents a room to a younger adult who splits the utility bills, helps out with chores around the house, provides social interaction, and can call for help in an emergency.
My mother-in-law rents a room to her son, but increasingly, intergenerational strangers are shacking up as housemates to age in place when they don’t have a child to help them.
There’s even an online service, Nesterly, that matches young adults looking for low rents with older adults offering cheap rooms in exchange for help around the house. The City of Boston partnered with Nesterly to create a pilot program in 2018 that matched grad students with older homeowners. Of the program participants, none registered complaints, and 89% said they would recommend the program to others.
Even nursing homes have increasingly been opening cheap or free rooms to young adults in exchange for chores and social interaction with residents, as The Smithsonian outlines in this case study of an Ohio nursing home.
That social interaction is worth more than most people assume. One 2018 study of 69 nursing homes found that as little as one hour per week of interaction with younger people significantly reduced dementia symptoms and agitation in seniors. The National Institute on Aging summarizes several studies finding that loneliness is tied not only to depression but also to physical symptoms such as higher blood pressure and higher mortality rates.
And hey, the rent money is nice too.
5. Take Advantage of Technology
While older adults are notoriously reluctant to adopt new technology, there’s some pretty helpful tech for seniors nowadays. Here are just a few examples of how technology can help seniors age in place safely.
Manual Emergency Alerts
Today’s “help button” emergency alerts have become more sophisticated but remain just as simple to use. Rather than units fixed to a wall at home, companies such as MobileHelp offer smartwatches and other wearables that allow seniors who fall to call for help instantly from anywhere. Many even include GPS functionality so that family and other responders know exactly where to find their loved ones.
Automated Emergency Alerts
Some of the better wearables and smart tech, including MobileHelp, include automatic fall detection. That’s a reassuring feature considering that falls often leave their victims unconscious for hours.
Beyond wearables, many companies offer smart sensors that can be programmed to alert family members if the senior has not performed a common action recently. For example, sensors can report whether the person has gotten into or out of bed within a certain timeframe. Sensors can track the front door, a favorite chair, the coffeemaker, or the refrigerator door, and loved ones can even view in real time through a mobile app the last time these common items were used.
Check out Alarm.com’s Wellness products for examples.
Automated Pill Dispensers & Reminders
One of the most common problems faced by seniors aging in place is remembering to take their pills – and remembering whether they already took them that day.
Smart pill dispensers can release the pills daily, along with flashing lights, audio alarms, smartphone alarms, or all three. They can also alert family members about usage through a mobile app, so children can tell if their parents have taken their pills that day.
These have been around for a while, but they’ve gotten smarter and smaller. For critical but small items like keys, wallets, and smartphones, attach a locator to find them in a hurry. Try Tile for a well-reviewed line of products.
Self-driving cars have been around for a decade or so, and they’re oh-so-slowly rolling out pilot programs for ride-hailing and delivery services. In December of 2018, Google’s self-driving offshoot Waymo launched a driverless ride-hailing pilot program in Phoenix. Ford and Walmart launched a similar pilot in Miami in late 2018 that includes delivery of groceries and goods, per CBS News.
Self-driving cars are not science fiction, though they may not be commonplace just yet. Older adults can take advantage of ride-hailing services and delivery services, with or without a human driver, to keep them connected with the outside world long after they give up their keys.
6. Exercise to Stay Young
Staying active preserves not only your physical health but also your mental health. A study from Rush University Medical Center released in 2019 found that older adults who are more active are significantly less likely to develop dementia and other cognitive disorders as they age.
There’s also growing evidence that exercise not only helps keep you healthy longer, but it can also extend your life. In a study published in the British Journal of Sports Medicine, researchers tracked older men’s activity levels with an accelerometer. For every half-hour of daily “light activity,” such as walking a dog or gardening, the men were 17% more likely to still be alive at the end of the five-year study – all the more reason to live in a walkable neighborhood, ditch your car payments, and walk to buy your groceries.
7. Form a Plan for Bringing in Help
When you age in place, you hope to remain completely independent until the end. But even as you hope for the best, you should plan for the worst.
Beyond legal help, write a plan for how you’ll bring on help around the house. Home-sharing is a great way to start, as someone pays you to live with you and takes care of some chores in the bargain.
When and if you decline physically, you’ll need more than just help with household chores. You may need help cooking meals and even bathing and eating. If you don’t intend to move into an assisted living facility or nursing home, you need to plan for that kind of physical help in your home.
At a certain point, you may need to swap out a rent-paying housemate for a paid live-in caregiver. From a financial standpoint, it’s often still cheaper than a nursing home; according to Genworth Financial’s 2018 Cost of Care survey, the average annual cost for a private room in a nursing home is $100,375.
Planning out what help you’ll need later on makes it easier to call in that help when the time comes.
Think of your late-life planning the same way you think of retirement planning or estate planning: You have to do it in advance. By the time you need it, it’s often too late.
Choose your forever home with care, while you’re healthy, and retrofit it with safety features before you actually need them. Make sure you have plenty of social and logistical support, including from peers as part of a “village,” from family, from housemates, from technology, and eventually from caregivers.
Aging in place is a practical and affordable option, but only if you plan for your needs years in advance.
What are your greatest concerns about aging in place? What steps have you taken to prepare for your later years?