The house is way too big for two people. It needs to be painted. Weeds in the backyard threatened to engulf your two-year-old on a recent visit. And you've begun to notice slight failings in your aging parents: dulled memory, a tendency to forget appointments, a new slowness or preoccupied manner. To make matters worse, your mother recently took a fall, injuring her ankle. Temporary help was called in to cook, clean, and, in general, to ease the increasing burdens of daily life. There's a sense that something's got to change, though the facts are hard for grown children and their parents to acknowledge. What do you do?
The best thing is for the family to sit down, perhaps with a neutral facilitator who knows the options, and gently talk about plans for the future. "Most people aren't prepared to have this discussion, nor are their parents. Parents don't want to talk about money and funerals with their children," says geriatric-care manager Emily Saltz, L.I.C.S.W., director of Elder Resources in Boston. "At most, kids might work up the courage to ask about it and their parents say, 'The will is in the third drawer,' and that's the end of it." As with most problems in life, however, the sooner such issues are grappled with, the easier they are to solve. "The most important thing to do is to plan ahead, to take control with the goal of having the fullest, most independent life possible," advises Saltz. "It all seems terrifying--possibly leaving your home--but if you avoid it and don't make these changes now, decisions are going to be made for you later."
Luckily, there is a robust elder-care industry (including the burgeoning care-management field) out there willing and able to help families sort through the morass of housing options and the accompanying financial, legal, and emotional considerations. And the industry expects to keep pace with the rising elderly population: by 2030, the number of Americans age 65 and older will likely be 70 million--20 percent of the population--and it will be a much more ethnically and racially diverse group than it is now. The hope is that as demand for alternative housing options rises, the industry will expand, as it has during the last decade, to meet it.
It used to be that elders stayed home, moved in with relatives, or went to a nursing home, says Saltz, but that's no longer necessarily the case. Staying home can still be a good plan--especially since the home-care industry is growing rapidly--if there is reliable support and supervision nearby. The building industry is increasingly savvy about elder housing, offering new products and designers who specialize in modifications, or so-called "flexible space," for aging occupants and in-law additions. Shared and cooperative housing also exists, where groups band together to pay for private services.
But if moving to a new age-restricted community is the answer, here are some variations to consider: independent living or elderly housing; retirement/continuing-care residences; assisted-living communities; rest homes; and nursing homes (also called skilled-nursing facilities). Within each of those categories exists a wide range of communities that differ in their size, quality, geography, architectural design, landscape, philosophy, levels of care, demographics, religious orientation, the type of cultural and social activities offered, and so on. It's almost like choosing the most suitable town, neighborhood, school, or job.
"Most older people still think of assisted living as a nursing home," and they won't even consider it, says Saltz. "You have to take them by the hand and show them what assisted living is really like. It's not enough to hand out brochures. They have to go there and see it."
Assisted living is different from a retirement community because some level of impairment--be it as simple as not being able to prepare all three meals a day--is necessary to moving in. The number of assisted-living facilities in Massachusetts alone has more than tripled in the last five years, from 44 residences in 1995 to 143 this year, with several more slated to be built, says Emily Meyer, executive director of the Waltham-based trade organization Massachusetts Assisted Living Facilities Association. As of June, approximately 8,300 people were in assisted-living apartments, she says, with an average stay of two years. The residences range from old Victorian-style homes with two or three units to "cottage-models," consisting of 14-unit buildings clustered on a campus, to larger, free-standing facilities with 60 units or more in one building. Nationwide, the average monthly cost for a rented unit and attendant care runs about $2,500 for a studio to $3,000 for a one-bedroom, though many places in Massachusetts exceed that. (Saltz puts the average at $3,000 to $5,000.) A premier, high-end assisted-living community called Boylston Place of Chestnut Hill (in an affluent section of Newton, Massachusetts) opens in November alongside the affiliated Hammond Pointe Skilled Nursing and Rehabilitation Center. It will command $5,000 to $12,000 per month.
One major development Meyer and Saltz applaud is the increased number of assisted-living communities that have specialized units for cases of dementia and Alzheimer's disease. These units aim to provide high-quality care--family-style meals, activities catering to memory loss, higher staffing ratios--without impeding autonomy. "Residents still have to be physically functional," Saltz explains. "But you can be confused. And many people who move into traditional assisted living may need to move into a dementia care unit later on."
Prohibitive costs keep some people from even considering assisted living. Medicare does not pay for it, nor for any long-term nursing-home care. In Massachusetts, individuals may receive a combination of state and federal benefits that pays up to $1,900 a month for personal care and housing, Meyer says--but of the 8,300 people in assisted living in Massachusetts, she adds, only 600 receive Medicaid assistance. Many people must use part of the proceeds from a home sale to cover the costs of assisted living, which is among the most expensive of housing options, says Nicolas Retsinas, M.C.P. '71, director of the Joint Center for Housing Studies of Harvard University.
Only about three percent of seniors over the age of 70, and roughly seven percent of people aged 85 to 89, are in assisted-living units nationwide, he says. About 10 percent of the elderly live in age-restricted communities (like retirement homes). Disparities in wealth and income in society will follow baby boomers, a disproportionately white group, into old age, Retsinas says. (According to a report published by the center this year, "In 1993 one-fifth of all those over age 70 had a net wealth of over $200,000, an equally large share had net worth of less than $25,000.") "For many older Americans," he points out, "the effective absence of wealth eliminates options in old age, which raises public policy questions about elder care and the role of the government."
Most seniors live in conventional housing and prefer to stay in their own homes as they age, Retsinas says. One problem is that the housing stock ages along with them, increasing maintence costs, and the modifications needed to ensure comfort and safety may not be in place. "Most people will grow old in the homes they bought when they were younger," he says, "and when you're younger, you never think you're going to get old." Shared or cooperative housing options, renting space to a young paid helper, or moving in with family members are still common arrangements--more so among non-white elders, Retsinas says.
Organizing services for elders who want to stay at home takes effort even for those who can amply afford it, says Andrea Cohen, managing director of HouseWorks, a division of SolomontBailis Ventures. The Newton, Massachusetts, company offers practical and home healthcare services to foster independent living for elders of all income brackets. Charles Woodard '35, LL.B. '38, who lives at Fox Hill Village in Westwood, Massachusetts, has used HouseWorks for transportation and called them last spring to help with reunion-related mailings to more than 200 classmates. "They've been a great help to me," he says. For Cohen, "It's doing the little things--driving someone into town for lunch, putting in a new safety railing, picking up prescriptions, or changing batteries in the smoke detectors--that allow older people to stay home." Companies like hers are trying to make it easier to patch together those kinds of daily services.
Home healthcare is still costly and most of the time must be paid out-of-pocket. "Under most Medicare benefits, the home care is sparse and time-limited, lasting five to six weeks," says Emily Saltz, and 24-hour care is available through a network of private agencies that charge, on average, $15 to $18 per hour or $150 a day for live-in help.
Renovations to the home are also worth considering, including adding or converting space to house family members or paid help. "Some of the issues I look at when I talk with clients about staying home are: what is their functional level, their competency to make decisions, their physical and emotional well-being," Saltz says. "Generally you need family members or advocates to oversee home care. But if that's the will of the elder, then we'll do it. Not everybody has to move. Some people can stay home."
There's no way to overstate the power of home ownership to unlock options in old age, says Retsinas, the housing expert. "Even with the economy and the stock market the way they are, home equity is still the cornerstone of wealth for most Americans."
Tax accountant Richard Hellmold '75, in private practice in Natick, Massachusetts, describes several ways to make the most of that asset as a family. One mode is a sale/leaseback deal with your children or another relative. That entails selling the house at market value to a family member who takes out his or her own mortgage and assumes maintenance and tax obligations. That frees up cash for the parents, who pay market rent to the relative, who gets his or her own long-term investment. (If market rent is not paid, the relative could get strapped with further taxes or penalties, Hellmold says.) Another choice, he says, is a reverse mortgage, in which the homeowner is provided monthly payments by a mortgage company against the value of the house: building up a mortgage, rather than paying it down. The risk is outliving the equity in the house, and having the bank call in the mortgage, he warns. But if you're 75 and obtain a 30-year mortgage, it's a good way to generate monthly cash.
For those who own two or more homes, Hellmold advises planning way ahead to take advantange of capital-gains exclusions. Federal law allows a $500,000 capital-gains exclusion on a principal residence every two years, he explains. If the parents have lived in a house in Wellesley, Massachusetts, for example, for more than five years, but own a vacation home on Cape Cod, they may sell their primary Wellesley residence--freeing up, without tax, a maximum of $500,000 beyond the investment in the house--and then move to the Cape Cod house. If they stay in that house for at least two of five years, they may then sell that and again take advantage of the capital-gains exclusion of $500,000. If your resale profit gain is less than $500,000, there is no tax on that money. Charitable donations of property, land trust arrangements, and other creative, legal property transfers can also be used to save money on taxes.
In the end, though, even Hellmold says decisions about housing, property, and retirement "are a function of health and emotional life. As much as I'm an income-tax and estates person, don't let the tax tail wag the dog. You have got to listen to what people want to do." His own mother, for instance, now in her eighties, still lives in the house in New Jersey he grew up in. "She's comfortable there," he reports. "She's been there over 50 years. The last thing she wants to do is move."
