Retiring in the City
“Many boomers are ditching suburban home ownership for rentals in urban centers,” says Diane Eastabrook. (1)
I was recently interviewed for an article on Forbes, and I thought the writer did a great job. You might enjoy it. Click here to read her story:
Let me expand on my thinking, because you, or a retiree you know, may be considering moving homes. Share this story!
Three Points on Health and Moving Homes
Dying in place. “The plan is to leave here feet-first!” says Doug, in the article above. A nice goal, but for many of us, it’s not realistic. Call your Wealth Manager here and ask for our new resource, “My End-of-Life Decisions” workbook. In spite of the gloomy title, I find this workbook empowering. You’ll find great conversation starters for you and your loved ones about what matters most to you. You’ll get a few good ideas about how to plan for aging in place. You’ll learn how to convey to the younger generations the way you want things to go. It gives you as good a chance as I know about to maintain your dignity and independence. (2)
Convenience. Getting home healthcare is easier when you’re living in a place with public transit. But that may not mean it’s less expensive. Research on the costs of urban and rural healthcare costs are inconclusive—which is less and better varies, dramatically. The biggest determinant is not fair, but obvious, and that is your financial resources. The more you have, the more likely you are able to provide good healthcare. So, do your research first for where you want to go. Learn about what is available for home healthcare, hospitals, insurance options, and alternative medicine too. (3)
Final point about moving homes and your health: not dying, but dementia and other ailments are expensive. Healthcare “aging shocks” get a lot of publicity, and rightly so, because many of them are not covered by insurance. “The typical 65-year-old faces present value lifetime costs for uncovered long-term care of $44,000. By contrast, the present value of lifetime out-of-pocket prescription drugs costs averages $12,000, uncovered medical care comes to $16,000, and uncovered private insurance premiums come to $18,0001.” Importantly: these costs are spread out over a nearly thirty-year life expectancy, so the “shock” is not often realized as a lump-sum. The media usually reports even higher costs, but I feel like these “present value” costs are both fair and likely to be paid by many of us. (4)
Three Points on Wealth and Moving Homes
Rent before you buy. If you’re considering a move, I recommend you rent (even if it seems counter-intuitive) before you commit to a purchase. You’ll learn more by living in a new place than you could ever find out by researching. If you regret your purchase, the pain may be worse than the rent payments. Even if you have not rented since you were just out of school, renting can make good financial sense.
We are not our parents; our housing shouldn’t be like theirs either. We sometimes let the experiences of our parents and grandparents determine our own thinking about health, wealth and housing. We do so to our own detriment. We’ve either seen, or heard, nursing home horror stories. But we’re living longer, with better health, than prior generations. And the continuum of housing options is various, and huge, and (honestly) quite exciting. Let’s look to our peers, not our parents, for guidance about what the future holds and where we should be living. Think instead about your values—and if that’s too complicated—take a look at your checkbook. See where you’re spending your money. Place your location next to your avocations.
We are the deciders on many of the costs that increase as we age. Transportation, for example, gets both more expensive (chauffeur, UBER) and less expensive when we don’t pay for gas, insurance and an optional garage. None of us want to burden our relatives with the time/hassle of taking us to/from various appointments. None of us want to lose that freedom either! Consider also the home maintenance costs. They may go down as we age because we don’t do the necessary upkeep. That’s not fair to the neighbors, nor the inheritors! And they may go up if we don’t move out because we have to hire out—which sometimes feels like the home owns us, not the other way around.
These factors, and more, make the idea of moving to a more metropolitan area, possibly renting, and/or simply downsizing, good for both our health and wealth. Use the experience of your wealth manager and discuss your goals, values and relationships and you’ll make the right decision. Guaranteed.