According to a recent survey from TransAmerica Center for Retirement Studies, “Three out of five current retirees have remained in their homes and almost the same proportion of workers over 50 expect to stay put when they retire.” Given that, so many Americans want to age in place, it may make sense to do some prep work. Below are five items to consider when planning for your retirement:1
- Home Modifications
Having the right floor plan can be very important and may even require moving to a single-story home. However, if a move isn’t possible then having the ability to live on one level may be necessary, i.e. relocating a bedroom or laundry room to the main floor. If you have stairs, consider installing a motorized chair lift, which can cost approximately anywhere between $3,000 to $4,000. You may also need to think about replacing tubs with a walk-in shower and grab bar. Install slide out shelves in the bathrooms, kitchens, and linen closets for easier access. You might also consider widening doorways and hallways, and installing ramps and non-slip flooring to accommodate wheelchair access.
- Cost of In Home Care
While many seniors prefer to stay in their homes throughout retirement, it’s important to be prepared if home care is needed. These services can be very expensive and are not covered by Medicare. According to a recent article, the median cost for in home care is $3,861 a month, and is about the same for homemaker services. It’s also a good idea to have a backup plan in the event that both spouses require care.
- Home Equity
A recent study from the Center for Retirement Research at Boston College found that home equity is the largest source of wealth for seniors over the age of 65. Therefore, if a significant amount of your net worth is tied up in the equity in your home, you may want to consider accessing this equity through a reverse mortgage. A Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a Federal Housing Administration insured loan. A HECM enables seniors to access a portion of their home’s equity to obtain tax free2 funds without having to make monthly mortgage payments.3 You can use the loan proceeds to fund home repairs/renovations, pay for medical expenses, supplement retirement income, pay for unexpected expenses, etc.
- Home Maintenance Costs
Speaking of home repairs, maintaining your home can be more challenging as you age. You may not be able to do some of the little things around the house that you used to such as mowing the lawn or shoveling snow. Hiring someone to help out and do repairs here and there can add up. According to a study from Boston College, “Housing costs including utilities, taxes and maintenance make up 30 percent of all expenses for couples between ages 65 and 74.” Therefore, it’s helpful to budget for these extra costs.
- Access to Health Care and Transportation
Aging in place means that your home should be located in close proximity to quality health care, and that you have access to affordable transportation alternatives. For example, you might live in a remote area and/or “There may come a time when you can’t drive or don’t feel comfortable behind the wheel. That means you need a community that has a good public transportation system or an abundance of taxis, Uber or Lyft drivers.”
If you’re looking for extra money to help fund your retirement, a reverse mortgage may be able to help. To learn more or to find out if you’re eligible, please use our Reverse Mortgage Calculator or call us at 800.218.1415.
1 Aging in Place: 5 Things You Have to Do to Retire in Your Own Home – thefiscaltimes.com, By Janna Herron, 10/4/16, http://www.thefiscaltimes.com/2016/10/04/Aging-Place-5-Things-You-Have-Do-Retire-Your-Own-Home?&tc=eml
2 Consult your financial advisor and appropriate government agencies for any effect on taxes or government benefits.
3 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance and maintain the home according to Federal Housing Administration requirements.