Many Baby Boomers are now taking care of their aging parents and preparing for their own retirement and final housing arrangements. Below is an article I found in the Summer 2011 USAA Magazine that addresses the changing needs of housing.
DESIGN A BLUEPRINT FOR AGEPROOFING YOUR HOUSE – OR YOUR PARENTS’ HOME – FOR THE LATER YEARS
Americans are increasingly choosing to remain at home in their later years. Whether you’re a senior or you have aging parents, you need to make some critical decisions. Read on for insights to help you get started.
As the first baby boomers begin to hit their retirement
years, they’ve made it clear that they’d rather not stray far from their own
front door. In a recent AARP survey,
nearly three-fourths of adults age 45 and older said they strongly desire to
remain in their current home for as long as possible.
That preference might seem like a
tall order, considering a struggling economy, strapped public programs and an
uncertain long-term care insurance market.
But experts tell us that “aging in place,” as it’s often called, might
be quite feasible for many.
To realize the intention of
remaining at home, you’ll likely need some updates—both to your home and to
your financial planning strategy. Among
the biggest pitfalls: letting pride or
denial subvert thoughtful planning.
“It’s very risky in the current environment to hope that either family
members or the government is going to step in help you out,” says Howard
Gleckman, author of Caring for Our
Parents. “You need to plan to
To determine if staying put is feasible, for you or your
parents, it’s important to carefully assess the big picture, says Amy Goyer,
family specialist for AARP. Finances,
safety and health concerns should top that brainstorming list. But think creatively, Goyer stresses, because
the key hurdles might not be immediately obvious.
Your mother may have numerous local friends on speed dial.
But if she struggles to keep her house clean, she risks stumbling over
accumulating clutter. Her nutrition
might suffer when preparing meals becomes too difficult. Or prescriptions can stack up unfilled on the
Sometimes, the biggest issue involves transportation.
And some seniors live in more rural areas, where there are fewer stores,
doctors, pharmacies and hospitals.
A reality check on the current state of affairs is a key component to informing any
decisions. Is the mortgage paid
off? Does the house need a new roof or
major repair? Is credit card debt
resolved, or at least manageable?
A variety of support services—paid and unpaid—can be cobbled together to assist with
daily tasks and logistics. (As one
starting point, go to eldercare.gov and type in your ZIP code.) And many communities offer adult daycare
centers. Even so, someone has to
coordinate these services, and the older individual or spouse may not be up to
the task, Gleckman says. “Being a
caregiver is in many ways like being a small-business person.”
For affluent families, one option is to hire a geriatric care manager. Other innovative living arrangements are also
emerging, such as intentional communities.
Under that arrangement, older at-home residents pay a membership fee for
help with transportation, home repair and other services.
As you weigh the various logistic and financial concerns, experts emphasize the
importance of pricing the alternatives.
According to federal estimates, having three home health visits per week
costs about $18,000 annually. Moving
away from home could be far pricier—a private nursing home averages $80,000.00
annually, and an assisted living facility costs roughly $40,000, according to
the National Clearinghouse for Long-Term Care Information.
Updating Your Home
Today’s houses aren’t necessarily designed to accommodate
all ages and mobility levels. Many homes
have narrow doorways, steep steps and awkwardly placed light switches. But at least most houses fulfill one crucial
safety requirement: 82 percent of
respondents in a 2010 AARP survey reported having a full bathroom on the main
Also vital is easy access at ground level, perhaps through a garage or a back door if the
front steps are too difficult to navigate, says Carolyn Sithong, an
occupational therapist in Orlando, Fla.
Sithong is a Certified Aging-in-Place Specialist, one of a growing
number of professionals trained in age-related home modifications.
Ideally, home modifications should be made sooner rather than later, perhaps as part of
a general bathroom or kitchen remodeling job.
Don’t wait until a medical crisis strikes, says Greg Secord, also a
Certified Aging-in-Place Specialist and a director at Rebuilding Together, a
nonprofit organization that focuses on home rebuilding.
Major remodeling can often be accomplished more affordably than you might realize,
Secord says. Converting a bathtub to a
walk-in shower—at a price tag of $3,000 to $5,000—is one of the more costly
changes. A more economical
alternative: Hire a professional to cut
a space in the side of the tub and install a small door to safely step
through. Including materials, that
approach costs less than $1,500, notes Secord.
Widening doorways can also be a big-ticket expense.
At least 32 inches is needed for a walker or narrow wheelchair, Secord
says. Some doorways provide just 30
inches or less of clearance. A wider
door could run $300 to $600, including labor.
But a few vital inches can be gained by replacing the existing hinges
with an offset pair, enabling the door to swing completely away from its
frame. Secord’s estimated cost: under $30 for the hinges.
If you’re concerned about resale value, most modifications shouldn’t present a problem,
Sithong says. After all, a spacious
walk-in shower would likely be attractive to all ages. Even some bathroom fixtures are being
designed in ingenious ways, with built-in grab bars invisible to the untrained
eye, she says. “As more and more people
start doing this type of renovation, there are all kinds of creative ways to
make this look good.”
Footing the Bill
How to pay for it? That’s a particularly difficult call, given the uncertainties involved.
An analysis in the health care journal Inquiry
estimates that a typical 65-year-old should have nearly $50,000 set aside to
pay for long-term care (that is, assistance with daily living activities such
as bathing, dressing and eating) in his or her remaining years. But averages can be misleading. While 42 percent of 65-year-olds won’t have
any long-term care expenses, according to that same analysis, 16 percent will
foot a lifetime bill that exceeds $100,000.
For those who prefer to remain in their home, the military health plan TRICARE shouldn’t
be relied on, because it doesn’t cover long-term care. Medicaid covers some long-term care, but only
for people with very limited finances who meet specific requirements.
The price for long-term care insurance, which varies based on age and breadth of coverage,
may initially seem daunting. Many
long-term care policies can cost as much as $3,000 per year. An option for military families and federal
employees is the Federal Long Term Care Insurance Program. If you’re eligible for FLTCIP, it still makes
sense to shop around—an individual plan could be less expensive and offer
additional flexibility in coverage.
FLTCIP open season runs from April 4 to June 24, 2011.
Deciding when to buy is a balancing act. While
premiums cost less for younger adults, you’ll be paying them longer. And there are competing requirements such as
disability and life insurance, as well as getting the kids through college,
says J.J. Montanaro, a Certified Financial Planner™ practitioner with USAA. “You want to buy it while you’re healthy
enough to qualify and can incorporate it into your budget. Typically, I see this convergence in the
early to mid-50s.”
Don’t shop on price alone, says Kevin O’Fee, assistant vice president of retirement
strategies at USAA. Check out the
ratings of the companies, he says. “What
good is a low rate if the company is not there to pay a claim?”
Your personal health is an important factor in the screening process for long-term
care insurance. And that screening can
differ from the kind used for life insurance, Gleckman says. Someone with rheumatoid arthritis, for
example, may have more success getting a life policy than long-term care
coverage, he says.
A program passed as part of the health care overhaul may one day provide an option for
those currently denied long-term care insurance for medical reasons. Dubbed the CLASS Act, for Community Living
Assistance Services and Supports, it’s designed to provide a daily payment to
cover long-term care expenses for those who pay premiums and meet other criteria. Many specifics, including premium costs,
won’t be finalized for a few years, although one analysis has projected a rate
of about $120 per month for an average daily benefit of about $50.
As you save for long-term care costs, don’t forget about tax diversification, Montanaro and
O’Fee advise. A hefty 401(k) account
accrued through one’s employer will be taxed as ordinary income once it comes
time to withdraw, Montanaro says.
“There are a lot of people who do a great job of saving,” he says. “And then they get to retirement and they
come to the realization that, ‘Hey, I only own 75 percent of my nest egg.’”
Instead, both Montanaro and O’Fee suggest looking at converting some of those funds into
a Roth IRA. That step will result in a
hefty tax bill now, they say. But
proactive steps like this will lead to less uncertainty heading into your later