I will never forget my uncle John, who has reached the robust age of 95 years. Even though I don’t know if he could have lived longer, I can’t keep wondering if he could have lived better in his later years.
My uncle was growing up in the era of the Depression, and he never parted easily with his money for his own well-being. Sometimes I wonder: If I had taken the time to clearly analyze the cost of living at home compared to a nursing home, maybe he would have avoided falling in his house and breaking his hip? Being malnourished, would he have benefited from healthy home-cooked meals instead of drinking a nutrient shake bought from a store every day to get his nutrients?
Comparing the costs between aging at home or in a retirement community
If you or a parent are struggling to decide whether to age at home or in a retirement community, make sure to analyze the good and bad sides from both a lifestyle and financial point of view. This will require some time to pass in order to process and analyze all the information.
Karen Henderson, who is an Independent Planning Specialist with the Long Term Care Planning Network, talked to me about this topic. "It's so complicated!", She began. Do you live in an apartment, house or condo? Do you have issues with mobility that would require major renovations, and what is your health status? Home care costs vary between $24 and $35 per hour and nursing costs $60 plus per hour. I knew a family who spent $10,000 a month on their dad's premium care when he was battling prostate cancer and decided to stay home."
Financial responsibilities for owning a home
If you are like my uncle John, you can assume that living at home is for "free," but that's far from the truth. Here are four financial considerations if you or a parent choose to stay in your own home:
- Daily living expenses. If you add up all your monthly and annual costs of living in your household, you may be surprised to hear how much you will spend each month in order to maintain your quality of life. In some cases, an option such as a retirement residence does not cost much more than living at home.
- Summing up the costs of home care. Depending on your place of residence, the cost of home care can vary greatly, as mentioned above. You or a parent can easily spend $120,000 a year without realizing it on home-based care if the individual needs health care, just as Karen’s clients. Living in a retirement residence is less expensive! Also, do not forget the cost of additional needs such as home repairs and maintenance, snow-shoveling, housekeeping and meal delivery.
- How much does it cost to stay social. It is very important for people who are in their retirement years to stay social, but it is going to cost. If you don’t have a car you will have to call a taxi, or paying for car insurance and registration if you have a car, entertainment costs such as having coffee or eating meals with your friends, or other recreational activities such as exercise classes or shopping sum up quickly.
- Expenses of owning a home. Even if you live without mortgages now, costs are unavoidable for owning a home or renting an apartment. Condo fees, electricity bills, insurance, property taxes and so on.
The value of services provided by a retirement home
If you do not need much care from a home care provider after doing the cost comparison, you may still find that retirement costs more than you currently pay at home. However, when you think of the value of services provided by a retirement home, such as: For example, fitness and leisure opportunities, 24/7 security, the social atmosphere, and dining options you will find that the costs are well worth the effort to make life more comfortable, fulfilling and altogether more enjoyable. Like my uncle, you might find it hard to switch from "saving" to "spending," but if you are able to afford it, you should consider it an investment in your health and well-being.
My uncle John was very strategic about his investments, but not with the investment of his lifestyle during his retirement years. If you're thinking about retirement living, we encourage you to meet with a Chartwell Retirement Living Consultant or your Certified Financial Planner to understand the numbers so you do not miss out like my uncle!
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