The costs of aging in place can be ‘crushing’
Growing older remains the preference of the vast majority of older Americans. But the financial and emotional consequences of staying in your current home, rather than moving to a nursing home or assisted living facility, can be a heavy burden.
The Wall Street Journal emphasized aging in place issues this week by interviewing several families across the country about their “crushing” struggle to care for elderly relatives. The article notes that the growing senior population in the U.S. is expected to make these problems more widespread, as about 25% of those over 65 “will ultimately require significant support and services for more than three years.”
In Nebraska, a couple has spent the past seven years dealing with the fallout from their husband’s Alzheimer’s disease diagnosis. His wife tried to care for him on her own, but when it became too much, she called for help. Since then, she has hired and fired a series of home care workers and now relies on a team of five assistants who work around the clock.
Annual healthcare costs are $240,000.
In Illinois, a man in his 90s, surviving on Social Security benefits, saw things take a turn for the worst three years ago. Because he couldn’t walk, he also needed 24-hour assistance.
Monthly health care costs of $13,000 quickly depleted his Social Security and veterans benefits, as well as $350,000 in savings. His daughter helped him qualify for a home equity line of credit to tap another $85,000. When he died in June at age 96, he had just $45,000 in the bank.
“My father wanted something left over when he passed away,” his daughter told the Journal. “I had to try to avoid the conversation. It would make him depressed. … I always told him, ‘Dad, you’ll be able to live at home forever.’
Insurer details Genworth financial shows that home care is less expensive than other options such as a nursing home. But with the staggering monthly cost of about $6,300 for a home health aide, this isn’t feasible for many Americans.
And inflation is expected to make these costs even more severe, Genworth said. Assuming an annual inflation rate of 3%, the cost of a home care aide will increase to $8,700 in 2034 and to $11,700 in 2044.
A reverse mortgage could be a way to access needed funds, with the added benefit of no payments required until the borrower dies or moves out. A personal finance editor at Kiplinger made the same argument this week, pointing to ample levels of U.S. senior home equity that rose to $13 trillion by the first quarter of 2024.
“Seniors often use the proceeds from the sale of their home to pay for care in a residential care center or nursing home,” the article says. “If you prefer to age at home, you may be able to use a reverse mortgage to pay for care at home. Creating a source of guaranteed income that keeps money coming in no matter how long you live could make it easier to give money away while you’re still alive.”
In July, senior interest group AARP unveiled his ideas for a comprehensive national plan for aging that is unique in its kind. His proposal contains four key objectives, including promoting access to affordable and quality health care; ensuring access to affordable and quality support services in the long term; providing opportunities to grow and maintain financial resources; and creating more livable communities that allow Americans to age better in place.
“While other countries are responding to these changes by developing and implementing national strategic plans to help them meet the challenges and maximize opportunities to extend lifespans, the U.S. has yet to develop a comprehensive national plan on aging ,” explains AARP. “Importantly, growing older in itself is not a challenge; being unprepared for growing older is.”
