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Making a Commitment to Aging in Place for a Sustainable Retirement

As the generation of baby boomers collectively began to enter its golden years, surveys reflected a growing desire to age in place. In the early part of the decade, our newest ranks of senior citizens were comfortable with the idea of growing old and retiring in their current homes. That would allow them to stay settled in a place they are familiar with, and spare them the effort and expense of relocating somewhere new.

In recent years, the cost of living – and affordable housing in particular – has continued to rise. At the same time, our economic situation has only grown more uncertain. The cost-effective appeal of aging in place has grown, and a case could be made for making that decision well in advance of one’s senior years. But is it smart to make that commitment so soon? Here’s a closer look.

The case for an early decision

Aging in place is probably not a serious consideration for young Americans. Younger generations value mobility. Not only the basics but even home luxuries, such as swimming pools or an above ground spa, are portable – that allows you to relocate and take almost everything with you.

Deciding to settle down in a specific location can limit your career options and dictate many lifestyle choices. Also, personal values may change throughout your life. Have kids, and you’ll want to move to an area with good schools. The busy city lifestyle may suddenly prove too unhealthy or stressful for you.

At some point, however, we become less flexible and more pragmatic. With more stability, you can afford to think ahead and plan for your retirement. At some point, you realize that retiring may entail significant expenses – and housing is among the biggest ones, maybe even ahead of healthcare.

The earlier you decide to age in place, the more you can set aside for other retirement expenses. While retirement is still several years down the road, you can invest in improvements that transform your home into a senior-friendly living space. You can also allow yourself to form a stronger bond with the community, knowing that in years to come, you’ll still be a part of this network and can count on them for support in turn.

Not all about financials

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From the viewpoint of cost analysis, the sooner you commit to living out your years in one place, the more you can save. It’s similar to how compound investment works; start investing money sooner, even in small increments, and the value will grow exponentially over time. Come late to the party, and your benefits diminish significantly.

Yet just like investments, there are two potential downsides you need to consider when making the early decision to age in place: risk and opportunity cost. Millions of Americans lost their jobs in the wake of the pandemic; the path to recovery is currently uncertain. Committing to one place based on the current scenario or the evidence of the past few years might be unwise as things continue to change. Housing costs could go down soon; people you know may depart the community for greener pastures.

Opportunity cost is also tied to this emerging picture of uncertainty. In a dire economic climate, you may need to extend your working years. It’s almost sure that in the near future, you’ll need reliable internet access to work in relative safety from COVID-19. If you live in a place where such job opportunities are scarce, you could be missing out on additional income to cover a potentially more expensive retirement.

Exploring the alternatives

A recent survey by Fresenius Medical Care indicated that the desire to age in place remains strong among adult Americans; nearly two-thirds wish to stay within their current location and community. Yet only one-third believed that this was a realistic goal.

Two concerns stand out from the data: health security and social factors. Indeed, investing in wellness might be the best choice you make if you still have several years to go before retiring. Maintaining good health is a preventive measure that effectively lowers the cost – and increases enjoyment – of your senior years.

Caregiving costs have only increased in recent years, and there is a projected labor shortage in this industry in the future. Move to where social support is. That could mean staying in place, but it could also mean reconnecting with your family – “informal” caregivers are on the rise as families fall back on traditional support models. Explore these alternative approaches, and you may be able to find the ideal solution for a sustainable retirement.

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