Doris Bersing, PhD

How to Upsize in Retirement

Copyright: Steven Frame

As the aging population continues to expand, many of us are beginning to think about our future need for long-term care. You can’t predict the type of long-term care you will need or how long you will need it, but you can start planning for the cost. Long-term care is certainly not cheap. According to the Genworth 2020 Cost of Care Study, the median annual cost for adult day health care services was $19,240. The average costs for homemaker services and in-home health aid were $53,768 and $54,912, respectively. And in 2020, families spent an average of $93,075 for a semi-private room and $105,850 for a private room in a nursing home.

Reducing Your Chances of Needing Long-Term Care

As you may have noticed above, receiving your long-term care at home is the most frugal of the options, says Bob Shannon (*). To make aging-in-place possible, it’s important to have a home conducive to such a lifestyle. A safe home for seniors shouldn’t have too many steps, and safety features should be added in common areas like the bathrooms and kitchen. If your current home isn’t ready for you to age in place, it might be time to look into downsizing for your senior years. Selling your current home and moving into a smaller, one-story home can also help you net some cash to cover the costs of long-term care. To estimate how much your home is worth, you can use an online home sale proceeds calculator. Furthermore, the fewer medical issues you have, the smaller the chance you will need long-term care in your senior years. While you can’t prevent hereditary issues, you can be proactive in preventing many chronic illnesses, including heart disease, diabetes, and obesity.

  • Consume a healthy diet based on whole, unprocessed foods. Cut out the junk that is high in sodium, saturated fats, and excess sugars.
  • Exercise Working out regulates blood sugar, controls your weight, and reduces pain caused by stiffness and inflammation.
  • Be social! We need social interaction for our mental and emotional health. Socialization keeps you mentally and physically active while keeping you from being lonely.

Saving and Paying for Long-Term Care

The sooner you start saving and planning for long-term care, the more options you’ll have for the future. Long-term care insurance is expensive, and some people find the high premiums are not worth the trouble. However, the younger you are when you buy into a long-term care insurance policy, the more affordable it is.

Reverse mortgages are a popular option for seniors. A reverse mortgage is a home equity loan for older homeowners. Once seniors have a reverse mortgage, they no longer have to make their monthly home payments. Plus, they get their payout either in one lump sum or installments. When the homeowner passes away, the property is then sold to cover the remaining costs. Homeowners should only consider a reverse mortgage if they do not plan on leaving their property to others.

Another option is a Health Savings Account, or HSA. An HSA is a tax-free, high-interest savings account that allows you to invest thousands of dollars a year into your future medical needs. According to NerdWallet, funds can be withdrawn without being taxed if they are spent on qualifying medical expenses— including long-term care. HSA holders can withdraw money for other purposes, but these withdrawals are subject to taxation.

Brief, long-term care is a huge expense for seniors. Planning ensures that you are able to pay for the type of care you want. Living a healthy lifestyle can prevent chronic diseases from developing and reduce your chances of needing long-term care. Moving to a smaller and more manageable home means you can choose care at home and age-in-place. When it comes to paying for long-term care, the right option depends on your situation. The younger you are, the more affordable long-term care insurance is and the more time you must contribute to your HSA. However, older seniors should investigate reverse mortgages to see if it’s a smart option for them.

(*) Bob Shannon, along with his wife, Mary are the creators of The inspiration behind SeniorMeet was to have a website that allows seniors to “meet up” and talk about topics that are relevant to their daily lives. This is one of those topics.