Louise has lived in her Florida home with her husband for the past 10 years. A daughter who has her own health problems lives nearby and a son lives a state away. Though he visits often, for practical purposes Louise has to manage day-to-day problems on her own.
She called me because she wanted to know if moving into a Life Care Community (also known as a Continuing Care Retirement Community) would be a smart choice. As a Daily Money Manager, I help clients pay bills and stay on top of their finances. In the past year, Louise had been diagnosed with blood cancer that sapped her energy and her husband was diagnosed with Parkinson’s disease and also has suffered a cognitive decline. Both are in their early 80s.
Louise loves her home, but now with the decline in her husband’s health, she has had to take over not only home repair duties but also all the financial management. While she was undergoing chemotherapy, she hired home care aids to help maintain the home, prepare meals, and make sure her husband was safe. As her husband’s health has declined, she kept the home care aid to help care for him.
When we first spoke, she wanted to understand how much it would cost to move into a new community, but as we talked through the numbers, she shared her concerns about what would happen if she predeceased her husband. As we continued to review numbers, she said she was having trouble keeping up with all the home maintenance and that she felt isolated in her own home. The choice confronting her dealt with more than just the money.
Ninety Percent of Americans Want to Age in Place
According to AARP, 9 out of 10 adults say they want to stay in their own home and community. The main reasons cited include proximity to family members, satisfaction with their current home, and satisfaction with job or job opportunities. None of those were a factor for Louise. In my work with seniors over 70, I have found that discussions about the choice between aging in place and moving to a life care community usually start with costs but quickly flow into concerns about care needs, independence, and isolation. It’s also easier to do nothing.
Most reports about the costs of care take your breath away, though the range of costs varies by geographic location and type of community. In 2015, for example, the cost of care for my mother in a memory care community in Northern Virginia was $98,000, with another $90,000 for a personal care assistant 12 hours a day. The assistant was needed because despite the dementia, my mother loved to walk. The aid was assigned to help her when she was awake so that she wouldn’t try to get up without help or using her walker. Without that help, she was at risk for falling, hitting her head and breaking bones. We hired the aid after the first trip to the emergency room.
Some reports place the costs of a retirement community at between $3,000-$5,000 a month, but those are costs for independent living and don’t include any entrance fees. Because these costs are so variable, you might want to find out the actual costs if a community near you meets your needs. Then you can use actual costs to compare with what it might cost to age in your own home.
The Costs of Aging in Place
To guide Louise, we determined how much it would cost to remain in her home and bring in the extra help she needed and compared that with the cost of moving into a life care community. To calculate her current living costs, we included the obvious, such as mortgage, taxes, insurance, utilities, phone, cable, television, lawn care, housekeeping and home maintenance. Homeowners should expect to put as much as 3 percent of the home value into repairs and things like a new roof or new heating and cooling as well as to update and repair plumbing and electrical.
Some life care communities include things such as home phone, housekeeping services, internet and basic television plans as part of their monthly fees, so it is important to know what you pay for these services and whether you would eliminate those costs if you moved into a life care community.
You also need to calculate how much you spend on food and entertainment. Many life care communities provide one meal a day as part of the monthly fee. Many also offer free movies, musical performances, educational programs, and other free activities. These will reduce but not eliminate food and entertainment costs.
You may also reduce your automotive expenses. If you go from two cars to one car, you will reduce insurance and maintenance costs and since most communities have walkable amenities as well as shuttle services for shopping needs, you would also reduce gas costs.
When she added everything, Louise, who had paid off the mortgage, found her total monthly expenses were about $4,800. We added the cost of personal care assistance for her husband, an additional $1,500, which brought the real cost of staying in her home to $6,300 a month.
Because Louise was overwhelmed by managing home maintenance and repairs, which her husband used to handle, she added the cost of a handyman or service for those chores for another $500 a month, bringing the monthly cost of staying in her home to $6,800.
Beyond those basic costs, we considered what it might cost to bring in more personal care assistance or skilled nursing help, or if she ended up in the hospital or needed someone full time with her husband, that would add another $350 or so a day. Since skilled nursing care averages about $240 per visit, it was easy to see how quickly costs could escalate if she decided to stay in her home.
The Cost of a Life Care Community
Louise found a nearby life care community that she liked. A 1,500 square foot apartment, including utilities and one meal a day, cost $4,650. In addition, she would need to pay for the home phone and mobile phone, would keep one car and would still have some food and entertainment expenses. We calculated the monthly cost for an independent living apartment would be $6,850, with no more expenditures for household maintenance and service chores.
Louise also felt that when they moved into the community, she would no longer need the personal care assistance since they would be living on one level and all their needs were within walking distance. However, this community had a non-refundable buy-in cost of $90,000. To retire that cost over three years brought the real monthly cost for moving into the community to $9,350 per month.
How Much is Community Worth?
With a foundation for comparing the costs of staying in their current home at $6,300 with a monthly cost of an independent living apartment of $9,350, we started talking about lifestyle. Louise admitted she felt very isolated in her home. She spent a lot of time driving her husband to meet friends or get to medical appointments in addition to managing all the home chores. That left her with little time, or energy, for much else. Friends who used to live nearby had either passed away or moved.
Louise felt that being able to walk to an activity and spend time with other women her age would be a benefit to community living. She also wanted to be sure that if she predeceased her husband, he would be in a place that would guarantee lifetime housing and increase levels of care as his needs changed. Too, she knew that by making a choice now she would not burden her children with the chore of clearing out their home.
Her brain was set on moving into the community, but her heart found it difficult to want to make the move.
One Way to Handle a Move
Louise decided to move into the community, but before she signed the final papers we decided that she should stage the move. Luckily, she didn’t need to sell her home to afford to make the buy-in payment. She and her husband could move in and make sure their furniture worked for their needs. After they moved, items could be swapped or replaced. Then we would find a realty firm that specialized in helping seniors move and would help sell, donate, and prepare the home for sale as well as place the home on the market. Having the option to move back into their home gave Louise the comfort she needed to make the move.
Helping Your Parents Make This Choice
Independence, meaning and purpose are the most important values to remember as you try to help a parent sort through their choices about where to live. Take the time to figure out the costs, as well as the pros and cons of moving into a community. Are there other options to consider, such as moving in with family? In my community, a non-profit is working to match young adults who will provide basic home maintenance, support, and companionship in return for reduced rent. Is something like that available in your community? As my grandmom used to say, “there is more than one way to skin the cat.”
I hope this helps you find the solution that suits your family needs.
