Financial PlanningRetirementHow to Decide: Aging In Place vs Assisted Living

How to Evaluate the pros and cons

When those diagnosed with life-threatening illnesses are asked by their doctors to make lifestyle modifications, only 9% make changes.1 They find it too hard to change even when they know it’s good for them. Likewise, many people may resist change, especially when that change could affect where they’ll live as they age.

Why We Like to Age in Place

For people over 50, 77% plan to age in their homes.2 Why? We’re comfortable in our homes. We like the routines, privacy, and freedom that come with homeownership. At home, we don’t have to ask if we’re allowed to have a dog or a cat. We enjoy having lots of space to spend time with friends and family. We don’t like the thought of being crammed into a small living place and having to get rid of lots of our stuff. And those of us who like to cook would be disappointed having to do it exclusively with a microwave.

Many people are confident in their ability to age in place. They don’t feel they’ll need support because they see themselves as younger than they are. Sixty percent of adults 65 and older say they feel younger than their age. Of those surveyed between the ages 65 of 74, a third say they feel 10 to 19 years younger than their age.3 As a result, people in their 40s, 50s, and even 60s can find it hard to anticipate the physical ailments ahead. This mindset can push the thought of moving to an assisted living community or nursing home off the table.

The Health Risk of Aging in Place

Since most homes weren’t built for aging people, aging in place can increase health risks. As people age into their 70s, 80s, and 90s, their risk of falls, and resulting injuries, in their homes increases. One in four people over age 65 falls each year.4 More than 300,000 people are hospitalized each year from broken hips, and 95% of these fractures are a result of a fall.4 Most of these falls occur in the home for a variety of reasons, including clutter, loose rugs, limited access to railings and grab bars, or poor lighting. A broken hip can force people to consider moving to an assisted living facility.

The Social Risks of Aging in Place

Loneliness can be the most severe outcome of aging in place.5 As we age in place, our mobility and access to transportation can decrease. This can result in going out less frequently to participate in social activities, which can lead to isolation. During a six-year study, the loneliest people in the study were nearly twice as likely to die as the least lonely.5

Our Homes Aren’t Ready for Aging in Place

For people with no mortgage (or a low mortgage) and enough income to cover expenses, aging in place might seem like a no-brainer. But we need to think farther into the future and evaluate if our homes will be a good place to live as we age.

A study from the Joint Center for Housing Studies of Harvard University found that less than 25% of homeowners age 55-plus have a bedroom and full bathroom on the first floor of their homes, a way to get into the house without steps, and no steps between rooms—universal design features that make life easier for all ages.6 The house that works today may not work as well in the future. Home modifications may be needed. Not doing the necessary modifications could put you or a loved one at risk for an accident that could ultimately cost more than the modification, and could result in significant health issues.

The Cost of Home Modifications

The cost of home modifications can get pricey. But, when compared to the cost of assisted living, they may be worth it. To get a better idea of the types and expense of home modifications you may need, meet with a certified aging-in-place specialist (CAPS). The CAPS program was developed by the National Association of Home Builders in collaboration with AARP. To find a CAPS professional near you, visit https://www.nahb.org.

The expense range of home modifications varies greatly. The number of modifications needed can depend on your needs. Basic modifications can cost up to $10,000,7 including installing:

  • Grab bars
  • Sturdy handrails along stairs
  • Replacement rugs
  • Better lighting
  • Lever-handled doorknobs

More extensive modifications can cost up to $100,000 or more, including:7

  • Removing (or reducing the height of) steps
  • Widening hallways
  • Adding a ramp
  • Lowering cabinets
  • Installing no-step showers
  • Installing a generator to protect against power loss

Since the range of expenses for home modification is so great, and the impact on the quality and safety of clients’ lives is significant, it makes sense to involve a CAPS professional to create a holistic aging-in-place plan.

If you’re remodeling your home, consider making age-friendly adjustments, such as widening doorways and corridors, eliminating walls to accommodate wheelchairs and scooters, or even creating space in a multistory home to add an elevator later. The additional costs during a remodel can only cost an average of 5%.8

The Cost of Aging in Place Support

As we age in our homes, at some point we may need help getting things done, e.g., housekeeping, laundry, heavy lifting, lawn care, gutter cleaning, grocery shopping, changing light bulbs, and air filters, and more. Fifty-two percent of those age 70 and older say that their health makes it hard for them to do home maintenance or repairs.9 We may be able to hire people to help with these activities.

Similar to home modifications, the cost of home-care support can vary. Between 50 and 70 percent of people over the age of 65 will eventually need significant help with their day-to-day tasks and overall care.7 The average annual cost of a homemaker is $61,776 assuming 44 hours of care per week.10 Homemaker service includes household tasks that people can’t complete on their own, including cleaning the house, cooking meals, or running errands. The average annual cost of a home health aide is $52,620.10 They offer more extensive personal care than family or friends can or have the time or resources to provide.

Can Support From Family and Friends Help Keep Costs Down?

Support and care provided by family can be cheaper. However, family members often pay the price. Many take time off from their careers or retire early, which on average costs caregivers $10,525.11 On average, caregivers pay $7,242 per year out of pocket for things like food, medication, and bills for their aging loved ones.11 The stress of caregiving on family members can lead to burnout. While family members might be willing at first, they might grow very tired of helping out over the years.

Low or no-cost support may be available. Try to find local social service agencies, senior centers, and private companies that can provide transportation and meals, either at a center or delivered to the home.

Discussing the Possibility of Assisted Living

There can come a point where we can’t care for ourselves, or it’s not safe for us to live in our homes. Then assisted living can be a good solution. Determining when that point comes is usually a family decision, but families tend to procrastinate on this decision. Fifty-four percent of people surveyed would rather have “the bird and the bees talk” with their kids than “the senior care” talk with their parents.12 Most people don’t like the idea of adult children trying to push them out of their homes and into assisted living.

While it’s not an easy topic to discuss, it’s better to discuss it sooner rather than later, when your options for insurance or care may be fewer and the costs may be higher.

The Cost of Assisted Living

The average national annual cost of assisted living is $54,000, and a private room in a nursing home is $108,405.10 Assisted living facilities provide personal care and health services for people who may need assistance with activities of daily living (walking, feeding, dressing, toileting, bathing, and transferring). The level of care provided is not as extensive as that which may be provided in a nursing home. Nursing homes provide higher levels of supervision and care than in an assisted living facility. They offer personal care, room and board, supervision, medication, therapies, rehabilitation, and skilled nursing 24/7.

Each assisted living community has its own pricing model, but monthly costs typically cover:

  • Taxes
  • Insurance
  • Utilities
  • Repairs
  • Appliance repair or replacement
  • Meal plan
  • Recreation and entertainment
  • Fitness center
  • Library
  • Beauty salon/barbershop
  • Craft workshop
  • Scheduled transportation

Finding prices for assisted living can be challenging because of the complexity of individuals’ needs. It’s rare to find baseline pricing online. To get accurate pricing, you and your family should visit a community, get a full tour, talk with the residents, and then have a conversation with the facility staff about your needs and financial resources.

Health Advantages of Assisted Living

Assisted living communities are designed for mobility and accessibility while also offering expert care and medical attention if needed. Residents are served three meals a day that are tailored to the specific health needs of seniors. Maintenance is taken care of, so the risk of falls is reduced, e.g., there’s no need to climb up on a chair to change a light bulb.

The Social Advantages of Assisted Living

Assisted living offers socialization through planned activities and outings, such as field trips, dancing, and cultural events. Daily living in the common areas also offers fun and socialization for seniors. Plus, there’s a better chance to stay engaged living in a community of people of similar age dealing with similar issues.

To summarize, we’ve covered:

  • Aging in place: Cost, social, and health impact
  • Assisted living: Cost, social, and health impact

Plan for Change

Change is hard. However, taking action and making plans for tomorrow can make tomorrow easier. At some point, we’ll probably have to decide whether to age in place or move to an assisted living community. Some people will refuse to discuss the possibility of moving, while others will be more open. Consider discussing your options with a financial advisor. They can help you anticipate your senior housing needs including, the health, cost, and social impacts of those decisions.

Next Steps:

  1. Discuss senior housing options with your financial advisor
  2. Google search CAPS professionals and meet with one
  3. Visit an assisted living community, get a full tour, talk with the residents, and then have a conversation with the facility staff about your needs and financial resources.

Sources:

  1. The neuroscience of change: Why it’s difficult and what makes it easier, Langley Group, 5/23/12. Most recent data available.
  2. Despite Pandemic, Percentage of Older Adults Who Want to Age in Place Stays Steady, AARP, 11/18/21
  3. Sad, Lonely and Downright Cranky? Busting Myths About Happiness and Older Women, Stria, 10/14/19. Most recent data available.
  4. Facts About Falls, CDC, 2022
  5. Just What Older People Didn’t Need: More Isolation, The New York Times, 4/13/20
  6. Homeowners Get Ready to ‘Age in Place,’ The Wall Street Journal, 4/9/18. Most recent data available.
  7. Aging in place vs. assisted living … It’s complicated, CNBC, 6/18/18. Most recent data available.
  8. 6 Things You Must Know About Aging in Place, Kiplinger, 5/15. Most recent data available used.
  9. Home Maintenance Among Homeowners Age 50+, The Hartford, 3/18. Most recent data available used.
  10. Compare Long Term Care Costs Across the United States, Genworth, 2021
  11. Caregiving Can Be Costly — Even Financially, AARP, 6/2112 How Senior Care Impacts Families Financially, Emotionally and in the Workplace, Care.com, 2016. Most recent data available used.

The information in this presentation is provided for informational purposes only. Hartford Mutual Funds may or may not be invested in the companies referenced herein; however, no endorsement of any product or service is being made. Hartford Funds is not associated with the entities referenced in this presentation.

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