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Considerations for Staying at Home through Your Retirement

A recent Wall Street Journal report looked at how three couples are making their homes livable for decades to come – often referred to as “Aging in Place”.  The article describes that - even though there is no immediate need for it - people are replacing steps, widening doorways, and retrofitting bathrooms to ready a home for older age.  Planning for the future “you” is a great idea, but the article never really asks the more important question: Are these upgrades a wise investment?

Remodeling to add ease-of-access features to a kitchen and no-step showers could easily cost up to $100,000 or more.  It is debatable whether or not upgrades like these will translate into a higher sales price in the future – you could actually be reducing the number of potential buyers if you take aging in place too far.  For example, a house full of no-step showers won’t appeal to a buyer with a young family who is going to need a tub somewhere.

Your Home as a Financial Asset

More to the point, thinking of your home as a financial asset in addition to a physical asset can help put things in perspective.  Imagine a large residence where you only use a small portion of the space.  You still have to pay for upkeep costs for the entire home which could be substantial; instead, you could turn that expense into income by moving to a smaller home and using that equity.  Also, California residents may be able to transfer the low tax base of their existing residence to a new one under Propositions 60 and 90.

Your Home as Part of a Network

Issues such as caregiving costs, social/emotional needs, and transportation are also important to take into consideration as you think about staying at home.  Aging in place can become more challenging if friends, family and neighbors move away – often leading to isolation which can be detrimental to your health.

The costs of home care as compared to other housing options varies considerably, but having a willing family member nearby can help defray some of these costs.  My colleague, Ellen Li, made a helpful chart describing other senior housing options which can help you map out your alternatives.

In his book, Aging in the Right Place, Stephen Golant refers to the concept of a residential mastery zone where you feel capable, competent, and in control.  He further points out that this should be balanced with your emotional comfort zone where you have memorable and hassle-free feelings.  Thinking through your retirement years and planning for the various possibilities, you may find that the right choice is not the one you expected.