I was one of the first contractors to focus my design-build remodeling business on the aging-in-place market back in the early 1990s. Studies have repeatedly shown that more than 70% of older consumers wish to age in place, so it seemed like a good niche to develop and it has kept me busy. In this role, I have advised many couples, individuals and families on important issues that impact the quality of their retirement. Financial planners should be partners in providing this information, too.
Two things I learned early while pursuing this focus motivate me to collaborate with financial advisors:
- A successful experience through later life requires planning. In my area (metro Washington D.C.), you can’t phone in for immediate home modifications while an illness triggers a few days of anxiety and turmoil or, worse, on the way home from a hospital or rehab stay.
- Money, though important, is not a guarantee that you can get what you want.
‘Zero excess mental capacity’
The first point can be understood from the following story:
I arrived at an evening appointment, scheduled the week before, to discuss a remodeling project with a family. The spouse who opened the door barely remembered the appointment and said, “Oh. Yes. Come on in. I just got home from the emergency room with my son. He is okay, twisted his ankle at soccer practice. My spouse is upstairs changing from work clothes but is a little upset because they are planning some ‘reductions in force’ at work and we don’t know what will happen or how it will impact our cash flow. We also have family in from out of town, unexpectedly. Come in so we can talk about the project.”
This story may be an exaggeration, but you get the idea. The chance of getting their attention for a successful sales appointment is less than zilch.
That family dynamic is essentially the same for a family whose loved one is in the hospital or rehab: They don’t know the prognoses, they don’t know the financial situation, and they have zero excess mental capacity for a thoughtful conversation and decision making. My time will be better spent at a bar watching the ball game. I am sure some points of this story resonate with financial planners.
A hospital bed in the living room isn’t a long-term solution
The second lesson is that although money is important, it may not be enough to meet one’s hopes, dreams, and expectations.
I was called to meet with the wife and adult daughter of a man who was hospitalized following a stroke. The couple lived in a beautiful, large, well-maintained home in one of the nicest DC neighborhoods. They probably owned it outright and it had increased in value many times since they bought it.
The patient desperately wanted to get home, but was in pretty rough shape, and expectations about his recovery were unclear. His family wanted to meet his wishes. They also wanted him back home.
One solution — a hospital bed in the living room, a bedside commode and bed-baths — was not a long-term lifestyle they could picture for themselves.
The other solution was just too overwhelming to consider. It required time for design, contractor shopping, pricing and permitting; construction of a no-step entry to accommodate the man’s wheelchair; and the installation of an elevator or full bath on the main floor.
Everyone who has had their home remodeled knows the strength and stamina required for this sort of project. So, although the family had the financial resources, the man never saw the inside of his beloved home again.
Help clients fulfill their dreams
As I see it from the outside, financial advisors help their clients accumulate and preserve resources while using them to fulfill their dreams. Of course, the dreams are personal, but many of us want similar things: to enjoy family; pursue hobbies, habits and interests; and possibly travel — and to do it all in pretty good health.
Most importantly, we want the choices to be ours, not forced or constrained by the availability or usefulness of the resources. That is where the “planning” comes in. The point is to look ahead so that hopes are reasonable expectations, not disappointments.
Home equity always figures into the retirement planning exercise. Whether as a sale, or, sometimes as a reverse mortgage, the value is usually understood as it can be converted to cash.
“But our homes, much like our nest eggs, were not initially designed for the years and health that comes with increasing longevity.”
But our homes, much like our nest eggs, were not initially designed for the years and health that comes with increasing longevity.
The Harvard Joint Center for Housing Studies reports that fewer than 7% of American homes have safety and accessibility features needed for aging in place. We should prepare to access this asset as a strategic tool for lifelong living.
Anticipate future needs
As financial planners begin to see their clients enter their advanced years, the nature of the advice they are called upon to provide changes. Shorter horizons and shifting priorities come into focus. As is true with any time-sensitive health issue or financial investment, it is hard to make good decisions during a crisis.
Good remodeling decisions for successful projects are made far in advance of needs, with the type of calm, foresight and planning financial advisors are known to provide.
During the COVID-19 pandemic, we’ve learned that our homes can be classrooms, offices and exercise centers. We also learned that they can be comforting, isolating and empowering. It has become increasing clear that health and long-term care can be provided in our homes, and it is smart to make sure our homes are appropriate for this eventuality.
Lower care costs and some investment advantages
Creating a safe and accessible home environment can make it easier and even more affordable to care for many individuals. For example, a properly designed home can minimize the likelihood and the cost of falls, which are often a life-changing source of misery, heartache and financial burden.
Safer homes also reduce the hours of caregiving needed, whether provided by family or paid. This makes economic sense when you consider the cost of just one month in assisted living is more than the average home modification project.
Increasing the resiliency capabilities of the home as a strategic asset should be part of the planning process. Aging in Place 2.0, published by the MetLife Mature Market Institute, explains the broad resources required for successful aging in place and spells out some of the investment advantages.
Three conversations starters
There is a common misconception that aging in place means living in the home where you have lived for many years, possibly raised a family and spent your career. This may be true but many people move to be near (or far from) family or to be near a golf course, the mountains, the sea or their alma mater. These are lifestyle choices. All can be aging in place. What is not aging in place is being forced from this home you have chosen by health conditions that often accompany aging.
How would a financial planner add home planning for a client’s later years to their retirement planning process? For starters, here are three questions to ask clients:
- What is your home like? Is it an apartment, single family, owned, rented?
- Do you like it and picture yourself living out your later years there?
- Are the design and details conducive to caregiving and mobility that often or typically accompany the natural process of aging? This refers to steps, bathroom safety, lighting and more.
In addition, here are some questions for which financial planning clients need answers:
- What are the features of a house that is a tool for lifelong living?
- How can we modify our homes to make sure they meet our needs as our health changes?
- When must we start evaluating and updating to make sure these capabilities are ready when we need them?
An updated home has significant benefits and growing evidence shows that this includes finances. Yet, the most important benefits for clients are the dignity and joy that come from their choices and desires being honored. Good advice to make our houses the place where these universal goals can be realized is an important frontier.
Louis Tenenbaum is a recognized authority, speaker, consultant and advocate driving policy and investment for aging in place. He founded the HomesRenewed Coalition to bring together consumers, businesses, nonprofits and policy stakeholders to increase the nation’s aging-in-place capacity. He partners with financial advisors to help their clients age in place. Louis can be reached at firstname.lastname@example.org.