The Cautious Investor

There’s No Place Like Home…Or Is There?

You have planned for a successful retirement, saved and invested to support a com-fortable lifestyle. But have you thought about where you would like to live? The place you choose can play a role in your retirement success.

There are many elements to consider for a healthy and happy retirement:

•  Engaging in a healthy lifestyle and finding activities and support systems to maintain your health.

• Social interactions are essential to our overall well-being, so opportunities to build and maintain social relationships are important to your retirement success.

• Staying actively involved in activities and pursuits that interest you help keep your mind young and make life so much more enjoyable.

• Where you choose to live, or visit can have a big impact on your overall well-being and retirement success.

How does where I live matter?

Where you choose to live can have a direct impact on your happiness and well-being. Will you have opportunities to have an active and engaged life, or might you be isolated and alone? Will you live in a safe environment with access to quality health care as well as social opportunities?  

As we age, our social circles can narrow for a number of reasons.  Retirement reduces the opportunities for casual social interaction and our family and friends may no longer live nearby, or even in the same state. Eventually we ourselves will become less mobile, which may further isolate us. Thus, you want to live in a place where opportunities for social interaction is part of your daily life.

What should I consider when choosing my next home?

We have so many options as we move through retirement, and our desires will change over time.  Initially, your primary consideration may be geographic. Do I stay in the area where I now live, or do I consider living elsewhere? Do I become a snowbird to take advantage of better weather in the winter, while maintaining my home base, or do I choose to relocate? Do I move closer to children and grandchildren, or just spend more time visiting?  

You may also want to consider whether to downsize or right-size. Like it or not, there may come a time, even if only temporarily, where you may not be able to navigate stairs, narrow doorways, bathtubs, etc. so you should also consider accessibility within your home.  

Should I consider a senior living community?  

Senior living communities can run from active senior communities for people age 55 and above to continuing care retirement communities (CCRC), which offer various levels of care as we age. Senior living communities offer three main features – security, senior-focused amenities and a sense of community.

Which type of community is right for you will be influenced by your desired lifestyle, preferred climate, wish to be close to family and friends, cultural opportunities, access to good health care, etc.  Remember that as you age, your goals and needs may change, making it likely that you will be revisiting your options at various times throughout your retirement.

What types of senior living options are there?

Senior Living Communities: These are communities for active, healthy seniors who are able to live on their own. You can live in a home, townhouse, condo or even a mobile home. You can own or rent or share a home as part of a cooperative.  Think of it like living in your old neighborhood, except these communities have age restrictions – usually over 55 – and most offer amenities such as clubhouses, gyms, yard maintenance, housekeeping and security.  Senior living communities have their pros and cons:

Pros

• Opportunities to make friends with other retirees: In active adult communities, residents are all pretty much in the same place in life, having worked hard for many years, raised a family, and now looking to enjoy a relaxed retirement. So it is easy to find people with whom you have much in common and wonderful friendships can result.

• A quiet, mostly kid-free environment: While adult children and grandchildren are of course welcome to visit, the 55-plus age requirement for residents means that active adult communities are usually nice, quiet places to live. 

• Amenities: An active adult community will provide you with many opportunities to get exercise, socialize, and stay spry into your retirement years. In these communities, residents will often organize social events, affinity clubs, volunteer groups, and other ways to stay active and involved.

Cons

• Lack of age diversity: Since active adult communities usually require a minimum of one person in the residence be at least 55 years old, there is a lack of age diversity within the community, and not everyone perceives it to be appealing to live in a community with people who are so homogenous age-wise.

• Care services are not included: Active adult communities do not provide assisted living or health-care services of any kind and there are no on-site health-care facilities. It is of course an option to arrange for in-home care if needed, and some active adult communities may even have contract arrangements in place with third-party home-care service providers. But ultimately, these communities would fall under the same category as “aging at home.”

Some 55-plus communities target people with specific lifestyle preferences.  These may include:

• University and college-based retirement communities for those seniors whose thirst for knowledge only increases with age.

• Faith-based retirement communities.

• Golf retirement communities.

• Boating retirement communities.

• Artist retirement communities.

• Luxury apartments in the city.

• Singles sharing homes a al Golden Girls.

Assisted Living Communities: In an assisted living retirement community, there is a moderate level of care provided. This type of living arrangement allows seniors to live in their own homes, which could be apartments, condos, or single-family dwellings. 

However, seniors also receive assistance for basic and vital needs, such as help with getting dressed, meal preparation, taking medication and transportation. Additionally, these facilities also provide social and cultural activities to keep the residents engaged. Keep in mind an assisted living facility does not provide health care services directly. However, these facilities will work in coordination with health-care providers such as dentists, hospice workers, podiatrists, counselors, and physical therapists.  This allows residents to benefit from specialized care without having to move to a nursing home or in-patient setting.

Continuing Care Retirement Communities: Part independent living, part assisted living and part skilled nursing home, CCRCs offer a tiered approach to the aging process, accommodating resident’s changing needs.

Upon entering, healthy adults can reside independently in single-family homes, apartments or condominiums. When assistance with everyday activities becomes necessary, they can move into assisted living or nursing care facilities within the same community.  These communities give older adults the option to live in one location for the duration of their life, with much of their future care already figured out.  This can provide a great level of comfort both for the senior and the potential caregiver, taking much of the stress out of the caregiving relationship.

CCRCs are generally the most expensive of senior living options. They may require a hefty entrance fee as well as monthly charges. Entrance fees can range from $100,000 to $1 million. Monthly charges can range from $2,000 to $5,000 and may increase as needs change.  These costs are dependent on a variety of factors, including health, the type of housing chosen, where you rent or buy and type of service contract.

There are three basic types of contracts for CCRCs:

•  Life Care or Extended Contract:  This is typically the most expensive option but offers unlimited assisted living medical treatment and skilled nursing care without additional charges.

•  Modified Contract: This contract offers a set of services provided for a set length of time.  When that time expires, other services can be obtained, but for higher fees.

•  Fee-for-Service Contract:  The initial enrollment fee may be lower, but assisted living and skilled nursing will be paid for at their market rates when needed.

How do I decide which type of community would be right for me?

Deciding to move to a senior living community is a big step. Think about the life you want to live, as well as any limitations you need to consider. Do your homework – research the communities you are interested in. Talk to people who have chosen the communities you are considering – their experiences can be invaluable. And finally, consult your financial adviser, who can be a valuable resource as you are evaluating the financial aspects of your options.

Fee-Based Planning offered through W3 Wealth Advisors, LLC – a State Registered Investment Advisor – Third Party Money Management offered through Valmark Advisers, Inc. a SEC Registered Investment Advisor – Securities offered through Valmark Securities, Inc. Member FINRA, SIPC – 130 Springside Drive, Suite 300 Akron, Ohio 44333-2431 * 1-800-765-5201. W3 Wealth Management, LLC and W3 Wealth Advisors, LLC are separate entities from Valmark Securities, Inc. and Valmark Advisers Inc.  Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Diversification cannot assure a profit or guarantee against a loss. Indices are unmanaged and do not incur fees. One cannot directly invest in an index. Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Copyright 2019 The Business Journal, Youngstown, Ohio.