Financial planning tools and services to put you on the path to the future you want
Your guide to financial planning and retirement
Connect with peers and experts
Get to know the people behind the company and the mission behind the work
Digital financial planning and guidance at scale
February 1, 2017
Love your home? Figure out how to stay there for retirement.
The survey — conducted by Philips and the Global Social Enterprise Initiative (GSEI) at Georgetown University’s McDonough School of Business — sheds light on baby boomers’ perplexing problems, including a preference to age in place, but a lack of preparation for remaining independent in their homes.
Despite strong indications that the cohort wishes to stay in their homes as long as possible, a staggering 80% of Americans age 60 to 80 are not thinking about, or are not sure, whether they will upgrade or update their homes.
But the American Bankers Association (ABA), which celebrated American Housing Month in June, offers some tips on how older adults can start planning ahead.
“America’s 50 and older population is expected to increase by 20% in the next 15 years,” said ABA President and CEO Frank Keating, in a press release. “It’s important that older adults and their families plan ahead to ensure they have the housing they need for a safe, comfortable and independent life.”
Here are seven tips to help you stay in your home longer:
1. Take a Look at Your Finances
It does not matter how you do it, but you need to understand your financial future. Use a retirement calculator, contact a financial planner, or arrange a meeting with a trusted family member or friend and a banker.
“It’s critical to understand your financial resources, how long they’ll last and what housing options are the most cost-effective for you,” the ABA says.
Be sure to consider all costs associated with aging in place, including:
2. Consider a Reverse Mortgage
A reverse mortgage is a loan that converts some of your home equity into cash flow. A HECM, or a home equity conversion mortgage, is a reverse mortgage insured by the Federal Housing Administration. It is the most common reverse mortgage.
Depending on your age and interest rates, a portion of the equity that you have built up over years of making mortgage payments can be made accessible to you through a reverse mortgage.
The money can be taken in a lump sum, monthly payments, as needed with a line of credit or some combination of these options. To be eligible for a reverse mortgage, you must be at least 62 years old.
Just like any financial product, a reverse mortgage is better suited for certain people in certain situations. But if you want to stay in your home, but are worried about finances then it is something to strongly consider.
Before signing on the dotted line, make sure to:
3. Assess Your Home
While most Americans prefer to age in place, there are often design changes that must be made to their homes to ensure they’re safe and comfortable, the ABA says.
To stay in your home as long as possible as you age, you should:
4. Make Security a Priority
Financial fraud schemes are an all-too-common way older Americans are scammed out of financial assets that are critical to their retirement stability.
In fact, selling bogus investment products to older Americans is big business, with an estimated $2.9 billion worth of retirement investing losses being attributed to financial elder abuse annually.
It’s a common scenario: You receive an email, letter or phone call promising easy money or dire consequences. If it sounds too good to be true, that’s because it probably is.
Be cautious about who you allow in your home and do not disclose sensitive information strangers. The ABA also advises you:
5. Look Into Community Resources
If your mobility is limited, look into services offered in your area. Many communities have established nonprofit programs that offer transportation and food delivery to assist older Americans at a reasonable cost.
Additionally, look into services provided by companies, such as Uber and Peapod, which provide on-demand transportation and grocery delivery services, respectively.
Using such services can help you remain independent in your home as long as possible.
6. Be Prepared for Emergencies
Don’t wait for something to happen before you prepare. Make sure you have a plan in place ahead of time.
To prepare, the ABA suggests you:
7. Re-Evaluate Your Needs
Every six months, you should re-evaluate your situation to make sure all your needs are being met, the ABA says.
As you age, your needs inevitably change. Take time twice a year, or as needed, to sit down with your trusted family member, friend and a financial advisor to make sure your current living situation is still the right one.
Share this post:
Our weekly newsletter full of inspiration, podcasts, trends and news.
© 2022 NewRetirement, Inc. All rights reserved.
Disclaimer: The content, calculators, and tools on NewRetirement.com are for informational and educational purposes
only and are not investment advice. They apply financial concepts in a general manner and include
hypotheticals based on information you provide. For retirement planning, you should consider other
assets, income, and investments such as equity in a home or savings accounts in addition to your
retirement savings in an IRA or qualified plan such as a 401(k). Among other things, NewRetirement
provides you with a way to estimate your future retirement income needs and assess the impact of
different scenarios on retirement income. NewRetirement Planner and PlannerPlus are tools that
individuals can use on their own behalf to help think through their future plans, but should not be
acted upon as a complete financial plan. We strongly recommend that you seek the advice of a financial
services professional who has a fiduciary relationship with you before making any type of investment or
significant financial decision. NewRetirement strives to keep its information and tools accurate and up
to date. The information presented is based on objective analysis, but it may not be the same that you
find on a particular financial institution, service provider or specific product's site. All content,
tools, financial products, calculations, estimates, forecasts, comparison shopping products and services
are presented without warranty.