Considering Retirement Communities: Is It Really Less Expensive to Stay in Your Home?
Many older adults say that one of the reasons they want to stay in their own home is because it is less expensive. Although this can be true in some cases, it is important to know that the actual cost savings may not always be as much as first appears. Here are some things to consider when comparing the costs of staying in your home vs. moving to a retirement community:
Big-ticket home repairs: In addition to the regular and ongoing maintenance costs of owning a home, including services for things like yard work, pest control, housekeeping, pressure washing, and more, there are also the larger one-time repairs that can really add to the overall cost. These repairs might include replacing the roof, HVAC, heat pump, or driveway. It also includes the completely unexpected costs and burden of items like a busted pipe or basement flooding. A general rule of thumb is that home maintenance costs average between 1–4% of the home’s value. The older the home, the higher the expenses will usually be.
Property taxes: Another potentially high cost of owning a home is property tax, particularly in states that tend to have higher tax rates. Nationally, homeowners pay annual property taxes equaling a little more than 1% of their home value on average, although it’s much higher in some areas. With most pricing models for retirement communities, property taxes are included in monthly service fees.
Double counting: When comparing the monthly cost of staying in your home with moving to a retirement community, it’s important to avoid double counting expenses. For example, when you consider what you pay for many of the regular and ongoing maintenance costs mentioned above, such as housekeeping, utilities, and yard maintenance, it’s important to realize that the monthly service fee at the retirement community likely covers many if not all of those same services. Meals are often not thought of on this list, but with most communities offering included meal plans, that can be a large expense to remove from the cost. Ultimately, you should go through everything you pay for in your current home and then look to see how many of those expenses would be included in the monthly service fee at the retirement community. Here is one that we utilize at The Cedars of Dexter for your convenience and consideration.
Home modifications: You also may need to factor in the cost of potential home modifications that may eventually be required for your home to remain safe and practical as you age. On average, people spend approximately $10,000 on home modifications to meet their needs, but some spend significantly more, even reaching into the hundreds of thousands. These include items like chair lifts, additions of ramps, reconfigurations of cabinets, and much more. If you are considering aging in place, it’s important to begin assessing the need for and cost of potential home modifications now so you can properly plan for them.
Cost of in-home care services: Lastly, aging in place often leads to the need for in-home care services to help with tasks like bathing, cooking, housekeeping, and more. The cost of six hours per day of in-home care is roughly equivalent to the cost of living in an assisted living community, although there are many variables that go into this. Factor in another 18 hours per day that someone else may need to be involved in some level of caregiving assistance — oftentimes an unpaid family member. The cost of 24-hour care would far exceed the cost of living in an assisted living community, or even a skilled nursing care community.
Impact on family members: As mentioned above, aside from the help provided by paid caregivers, it is still necessary for family members to be highly involved with caregiving in many cases. While unpaid family caregivers often end up providing some financial support — either through out-of-pocket expenses or time away from their career — there are other well-documented non-financial costs incurred by unpaid caregivers such as higher stress, health consequences, and time away from other family members and friends. These health issues can also lead to higher expenses for personal healthcare needs.
Aging in place equals unpredictable senior living costs: At first glance, it may seem that remaining in your current home as you grow older will be less expensive than moving to a retirement community, and in some cases, it can be. However, when you tabulate the costs of homeownership along with the unpredictable expenses that may arise from necessary home modifications and caregiving requirements, that cost differential can quickly begin to shrink. Add to that the toll that unpaid caregiving can have on loved ones and the cost of staying in your current home further increases.
Brio Living Services is here to help; and, in most cases, can be of assistance whether you do want to stay in your home or move to a community. From affordable living options and Continuing Care Retirement Communities (CCRCs), to Porter Hills Home Health Care and PACE (Program of All-Inclusive Care for the Elderly) options, we aim to achieve our vision of a world in which we are all empowered to age well.
Thank you to The Architectural Group Inc, a Live Life with Brio Campaign Silver Sponsor! We are grateful for your dedication to the older adults we serve and our team members.
