Retiring: Stay or Move?

Retiring: Stay or Move?

By Larry Hungerford 336-998-7000 or of

As we age, approaching the end of our working years, we face many tough decisions. Can we afford to retire? What do we do about long-term care? Should we relocate or stay put?

Typically, a conservative safe approach recommended by many experts, is to plan on taking no more than 4.5 percent of your savings annually for everyday living expenses. Of course, that assumes you are willing to invest 60 to 70 percent of your portfolio into stocks and/or stock mutual funds.

According to a recent release from Fidelity, the average 65-year-old couple retiring this year will need an estimated $280,000 (in constant 2018 dollars) to pay out-of-pocket health care costs during the couple’s retirement years. That number assumes Medicare coverage but not expensive nursing-home care.

It is an extremely difficult decision to decide whether to buy long-term care coverage. Most articles that I have read argue that if nursing-home insurance is desired, it should be purchased between the ages of 55 and 64. Buying it younger than your mid-50s typically means far too many payments before you may use it, However, payments are pricey when beginning coverage at age 65 or older.

Almost two-thirds (64 percent) of all long-term care expenses are paid by Uncle Sam’s Medicaid program because so many seniors use Medicaid “spend-down” strategies so they can qualify for government payments.

The value of life-insurance policies would ordinarily make the policyholder ineligible for Medicaid. However, they can still get Medicaid because “anyone in possession of an in-force life insurance policy has the ability to transform that policy into a pre-funded account that will disburse a monthly payment stipend to help pay for that individual’s long-term care needs.” (See “How to Use a Life Insurance Policy to Pay for Long-Term Care,”

Perhaps an even more difficult decision all retirees face is the stay-put or move decision.

According to a 2017 AARP study, 90 percent of people plan to age in their homes. Many of my readers will argue that staying put is an easy decision given their houses are probably paid for and they have friends and family close by.

Certainly a social network is extremely valuable to seniors — a six-year study that ended last year discovered that the loneliest people in the study were twice as likely to die than the least lonely. (Two reasons that retirement communities are so popular is the combination of a friendly built-in social network and typically outstanding health care.)

People in their 60s often dismiss aging worries because they believe they are in much better shape than their peers. A research study in 2009 found that 60 percent of adults age 65-74 claimed they felt younger than their age, with 34 percent of them believing that they feel 10-19 years younger than their age. Only 3 percent admitted that they felt older than their age. (I’m guilty, too — I’m convinced that at age 82 I feel I’m as healthy as the average person in his late 60’s.)

One problem is that seniors underestimate falls — one in four people over 65 fall each year. (I fell four times last year, but I still jog!) More than 300,000 people are hospitalized each year with broken hips. Most of these falls take place at home because, all too often, their houses are not “age-friendly.” Harvard University research found that less than 25 percent of homeowners age 55 plus have: (1) a bedroom and full bathroom on the first floor, (2) a way to get into the house without steps, and (3) no steps between rooms.

So now the decision to stay put becomes more complicated and costly when needed upgrades are factored to include grab bars, sturdy handrails along stairs, replacement rugs, better lighting, etc. But far more expensive is removing steps, widening hallways, adding a ramp, installing no-step showers, and other improvements.

Another problem is that adult children are typically unwilling to talk to their parents about aging issues. One amusing report claimed in 2016 that 54 percent of people surveyed would rather have the “birds and the bees” talk with their kids than the “senior care” talk with their parents.

Sixteen years ago, I suggested that my wife and her sister tell their 89-year-old father that he should stop driving. She said to me: “What will you do when your kids tell you that you should give up your driver’s license?” I instantly answered: “I’ll tell them to mind their own business.” (Now that I’m older, I hope I’d be more open-minded!)

Given the excellent choices of retirement communities locally as well as others nationally (Florida has no state-income tax), I believe considering a retirement community should be a priority for seniors who can afford them. It is ideal if you can move into one when you are in good health and can live independently. You find it reassuring that you know you will be taken care of as your health declines. I believe many people wait too long to move — it is far more difficult to make new friends if you have health problems when you first move in.

Admittedly, I’m spoiled by the lifestyle Sue and I enjoy at Bermuda Village. We can travel without ever worrying about the safety of our condo. All the activities (the Kentucky Derby party was yesterday) and exercise classes are great, but for me the two best highlights are being able to walk the hallway to fine dining and to swim almost anytime in our beautiful salt-water pool.

There is no doubt that change is hard and moving is particularly difficult for seniors. However, whether we stay put or move, making plans for tomorrow becomes ever more important as we age.

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