Reader Question: Hello Monty, my wife and I are in the late sixties. We are in good health and have no home mortgage. We have no trouble keeping busy, but as we look to the future and the options, sorting it all out in a logical and efficient fashion seems complicated. There is so much information and fluff out there it is hard to sort out. We are wondering about resources or advice as to how to go about it. Thanks for your advice. Martin S.
Monty’s Answer: Hello Martin, and thanks for your question. According to the United Press International, there were about 40 million Americans 65 and older in the US in 2011. It is estimated that number will grow as the baby boomers age, to over 70 million by 2030. The question is one that is on the minds of millions of Americans.
Answer a central question
While it appears on the surface that there are many options and a lot of decisions to make if one basic question can be answered, the whole puzzle becomes much easier to resolve. Should we stay in the current home or should we move to some other lifestyle? A central issue in considering this question is what can we afford for the housing budget.
The great majority of us stay in our homes. We retain our independence. We are familiar with the surroundings. There are no decisions to make and no risks to take.
We will sometimes make a change when we are no longer connected to a job, and we either have the means or squeezed by life developments. It requires a planning effort, the ability to make decisions and to take risks. So the first question to answer is; if we have the financial ability to move, do we want to?
What are the options?
Look at the options by unbundling them. This simplifies the analysis because there are three main categories that are very different. Those categories are; independent living, options in your own home and multiple levels of assisted living. Here is a general breakdown of the three categories:
- Independent living – This means a smaller home, rent by choice apartment, or condominium. Most often these options can reduce the housing portion of the annual budget. They also reduce the workload if performing self-maintenance. Choice two and three also dictate a reduced independence with the HOA and apartment house rules.
- Home care – There are many companies and small independent contractors providing a plethora of services to the senior community in their homes. From maintenance to grocery shopping to personal attendants and 24 hour housekeeping and supervision. Additionally, this category includes adult day care and respite care for the caregiver that takes place outside the home. The Internet and technology have created a new in-home innovation were monitors and cameras create new methods for assisting seniors with minimal needs.
- Age restricted communities – Here we have choices such as active senior communities, independent living apartments, assisted living, memory care and nursing facilities. Except for the independent living, the balance of these choices provides different levels of service and care for seniors requiring assistance. There are also sub-categories that involve financial assistance based on income and veteran status. A final choice in the category is the continuum of care facility where people move from one section of a campus to another as their needs change.
The next step is to gather specific information from a variety of sources. One source that has a tremendous amount of information is the Department of Housing and Urban Development at: http://1.usa.gov/dYnKQn. Another organization with good information is the American Association of Retired People (AARP): http://bit.ly/IzyXkT. A search for senior housing choices on the Internet will reveal many links to information that may be helpful. It is likely your choices will come from within one of the mentioned three categories.
Keep it simple
Knowing your housing budget and having selected one or two of the options that suit your situation, now do some comparison-shopping by location, price and amenities that are important. One of the important issues when leaning toward a move is to determine the value of your home to factor into the equation.
I did not include the reverse mortgage concept into the available options. I believe a higher likelihood of fraud exists in this type of transaction. Here is an article linked the Wall Street Journal that describes the situation.