Why Age 75 Is a Turning Point for Retirement Housing Decisions

On this episode of The Long View, eldercare attorney Harry Margolis discusses how estate planning changes as you age, what to consider when deciding housing, and how to navigate long-term care.

Here are a few excerpts from Margolis’ conversation with Morningstar’s Christine Benz and Amy Arnott.

The Hidden Costs of Aging in Place

Christine Benz: I wanted to ask about that dimension of people aging in place in their homes. Do you think that sometimes clients, people, underrate the nonfinancial aspects of that, of selecting caregivers or selecting a caregiving agency, making sure those people get paid, and then overseeing the whole household running in addition to … They might think about, well, yes, I have the money to pay these caregivers, but do they perhaps underrate the complexity of continuing to keep that household up and running?

Harry Margolis: I think so. I mean, just managing a house is a burden in itself, and there’s always issues. Houses, I think, are beginning to fall apart as soon as they’re built, so you have to keep them maintained, and getting help can be difficult in part because it’s hard to get exactly what you need because you may need somebody to just help you get up in the morning and get going and maybe help you at night with your medications or some kind of wound care or something like that. But if you’re getting home health from an agency, there’s usually a four-hour minimum, which is both very expensive and more than you need. You probably don’t want that person just hanging out in your house, killing time, because you can only hire them for a four-hour minimum. Then that’s through an agency. And then hiring somebody on your own, you have the same issues. If they don’t show up, you got to deal with that. If you’re going to do it right, you have to take out FICA, you have to get workers’ compensation. So these are all very difficult issues and just more burdens, either on you or on your family who’s trying to manage all this.

Are CCRCs Worth the Buy-In?

Amy Arnott: I’m wondering if you have an opinion about continuing-care retirement communities as a housing option, both from the perspective of how well they’ve worked for people that you have worked with as clients, as well as from an estate planning perspective, since they’re usually set up so that you make kind of a large lump-sum payment at the beginning and then your estate gets a certain percentage of that, maybe 80% of that back after you pass away.

Margolis: I think they can be great. I may have a more favorable opinion just because we have some really good ones in the Boston area that provide great service. They provide community, and you kind of know you’re taken care of, and the family knows you’re taking care of if anything happens to you. My in-laws actually lived in one, and they were very well taken care of. So I think they can be really good. And so you may lose 20% of your buy-in and not get the growth in kind of the investment value while you’re there, but that’s just a cost. And if you can afford the cost and get what you need, I think it makes sense. But of course, before you move in, you really need to kick the tires and make sure it’s a community that’s been around for a while and that you be confident that they are going to do what they promise to do and that they will pay the money back when the time comes.

Why Timing Matters When Choosing Where to Age

Benz: I’m wondering, Harry, if there are any financial or lifestyle decisions that you’ve found that people most regret not having made earlier and maybe in their 60s while they still had their full independence? What have you experienced?

Margolis: I think it really is taking stock about where they should live as they age. There’s a elder law practitioner out in Washington State named Rajiv Nagaich who has really made a campaign of people taking stock at age 75 and really considering whether they should stay in their home. Because by the time you’re 75, you almost certainly have retired. You got a pretty good fix on your finances. If you have children, they’re probably old enough to be settled somewhere, but you’re also probably still healthy. So you’re able to make a move, whether that’s selling and moving somewhere else in your community or moving perhaps closer to your children. So if you need help, it’d be a lot easier for them to provide it. And I think that makes a lot of sense. I think I like the age 75 time as a time to do it, because, again, things are probably settled in terms of your work and your retirement and your finances, and you’re able to make a decision.

How Families Can Meet in the Middle on Aging in Place

Arnott: What would you recommend in the situation where someone is at age 75, and they really have a strong desire to age in place, but family members disagree with that decision or feel like it’s not the best option for the elder?

Margolis: It’s always your choice, right? It’s your life. You should choose where you want to live, and it’s your finances, how you’re going to pay for it. I just think—just try to be clear-eyed about it. What happens if you fall and break a hip, and you’re in the hospital, and you’re in a skilled nursing facility, and want to come home and need some help, how’s that going to be provided? If your family members don’t live close by, how are they going to help you? And I think the other thing people need to be aware of when they’re making this decision is that sometimes options aren’t available later down the road, that they are available to you when you’re kind of cognitively and physically intact. We’re talking about CCRCs. You have to move into those while you’re still able to manage things so that you can age in place. It’s just a different place. If you wait until the need arises, you probably can’t get in or there’s going to be a long waiting list.