There's No Place Like Home

published 31 October 2009

Charles McCarthy has a lot of good reasons to live out his life in his home in Phoenixville, Pa., but one of them stands out: He is the local tax collector. If he were to move outside the area, he would no longer be eligible for the job. "What would I do?" says McCarthy, who has held the post for 20 years and, at 87, is running for reelection. "It keeps me busy."

McCarthy has lived in his home for 35 years. Five years ago, he suffered complications from knee-replacement surgery that left him wheelchair-bound and unable to drive. Now he gets around with the help of paid companions, wheelchair-accessible public transportation, and assistive devices and renovations that let him navigate his home and keep him safe. Leave home and job for a retirement community? No way, says McCarthy, rocking gently in his brown-corduroy glider. "I'm settled."

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However independent they hope to be, most adults who grow old at home eventually need help with housekeeping and transportation -- and sometimes with daily activities, such as dressing and bathing. The most likely helpers will be family and friends (usually spouses and daughters), according to the Family Caregiver Alliance. Informal caregivers provide unpaid services worth more than $257 billion per year.

For McCarthy, daily care from his family isn't an option: His wife, Helen, died years ago, and the nearest of his five children lives in Philadelphia -- a 45-minute commute at best. For three hours a day, five days a week, he receives help from employees of Home Instead Senior Care, a franchise company that provides mostly nonmedical services. McCarthy pays $23 an hour, or about $1,500 a month, for Ron Murphy and Sharon Crawford to prepare his evening meal, do laundry, vacuum and run errands.

That may sound pricey, but it's cheap compared with the cost of an assisted-living facility, for which the median price is $2,825 a month, according to a 2009 survey by Genworth. The median rate for homemaking services through agencies such as Home Instead runs about $17 an hour, reports Genworth. Care that includes personal services, such as help with bathing, costs a bit more, and personal care with some skilled nursing from a Medicare-certified agency approaches $50 an hour. Most long-term-care policies cover home care, including homemaking and personal services, but only a small portion of U.S. adults carry private insurance to pay for nonmedical services. Medicare picks up the tab for home health care and skilled nursing only under limited circumstances.

Hiring a caregiver can be less expensive than going through an agency, but it involves vetting candidates and doing a lot of paperwork. As an employer, you must pay Social Security, Medicare and unemployment taxes on the wages you pay the caregiver. You will also need liability insurance -- often included in homeowners policies -- in case the caregiver is injured. Some states require disability insurance as well. And you are responsible for having employees fill out an Employment Eligibility Verification form, which affirms that they are legally entitled to work in the U.S.

The most comfortable and equitable arrangement is often to pay a family member to provide care. But even when that's the case, the duties should be spelled out in a formal contract and payments should be in line with rates for the area. Drawing up such a contract can help shrink an elderly person's estate without jeopardizing future Medicaid eligibility for government-subsidized nursing-home care. In recent years, Congress has made it harder to qualify for Medicaid, requiring seniors who give money to relatives to wait at least five years before applying for government aid. Wages paid under caregiver contracts are not considered gifts, although payments that are deemed excessive could jeopardize a parent's eligibility.

Adult children who are overwhelmed by the choices, or live a considerable distance from their parent, might consider hiring a certified geriatric-care manager. These professionals will assess the needs, develop a care plan and, if necessary, supervise its execution. "If you're on the East Coast and have a family member in California, we can be your eyes and ears," says Carol Heape, a certified geriatric-care manager in Placerville, Cal. Hourly rates range from $80 to $200, depending on the area.

McCarthy is a beneficiary of the Americans With Disabilities Act, which requires public transit for the disabled, and the Older Americans Act, which promotes (and partly funds) community services to help the elderly age in place, including home-delivered meals, telephone check-ins and case management. Local area agencies on aging identify, coordinate and sometimes administer the programs. "They make sure that older people's needs are met," says Virginia Dize, of the National Association of Area Agencies on Aging.

If your parent lives in a neighborhood with a high percentage of older residents -- otherwise known as a naturally occurring retirement community, or NORC -- he or she may enjoy an even stronger support system. Successful NORCs pull together services for their elderly residents through local social-services agencies, businesses and philanthropies, says Robert Goldberg, of the United Jewish Communities, which advises NORCs. A few NORCs, such as one in Beacon Hill, in Boston, and another in Savannah, Ga., charge an annual membership fee of several hundred dollars; others offer services free or on a sliding scale.

McCarthy, who lives and works on the first floor of his 1960s-era rambler, has made modest changes to his home and habits to stay safe and comfortable. He had the doors to the bathrooms and bedrooms removed to make room for his two wheelchairs (one of which is electric), and he had a wooden ramp installed outside his back door. Each room in the house, including the bathroom, has a phone, but he also wears a medical-alert necklace to get emergency help when he is outside or beyond reach of a phone. McCarthy uses a "grabber" device mounted on a wooden pole to reach objects that are high up and another pole with a metal prong to flip light switches.

Such minor accommodations are often all an elderly person needs to live at home indefinitely, says Robert Criner, a home remodeler who is certified as an aging-in-place specialist through the National Association of Home Builders. Among the easy fixes: better lighting, wheelchair-friendly floors, grab bars, and hinges that hang on the door outside the door frame, creating a wider opening. Bigger projects include installing a no-threshold shower, chair-height kitchen counters and maybe a home elevator, which runs $50,000 "if the stars and closets align perfectly," says Criner.

Loss of mental acuity increases the chances that an older adult will fail to recognize danger or have a mishap. You can keep an eye on your parent and his or her house remotely with an environmental-sensor system, such as the Sensaphone (about $500 at www.smarthome.com), which alerts you to such hazards as an overflowing bathtub, a fire or a furnace failure. Motion detectors let you know if a front or back door has been opened or if your parent hasn't moved through the room that day.

All frail adults would do well to sign up for a personal emergency alert system, such as the Philips Lifeline (about $35 to $50 per month, plus an activation fee that depends on the location). Typically worn as a necklace or wristband, the device is activated by pushing a button; an on-call operator responds and summons help. "The main thing about technology for the elderly is that it has to connect with someone outside the house," says Laurie Orlov, of the Aging in Place Technology Watch (www.ageinplacetech.com).

With a home-equity line of credit, you can borrow up to 80% of the appraised value of the house (but significantly less in areas where home values have fallen) and repay the amount over a fixed period -- say, ten years. Most lenders require a credit score of at least 680 and documentation of income and assets. The interest rate, which is variable, depends on the size of the loan and the region. Recently, rates have averaged about 5.65% for a $50,000 line of credit, according to Bankrate.com. Interest on borrowed amounts up to $100,000 is deductible. Unfortunately, many seniors do not have enough income to qualify for a home-equity loan.

Another option, a reverse mortgage, offers a solution for older homeowners who are house-rich but cash-poor. These loans let seniors who are at least 62 draw on a portion of their home equity while living in the house. When they die or move out, they or their heirs repay the amount, plus the accrued interest, with the money from the sale of the house. If the house sells for less than the amount owed, the lender eats the difference.

To get a reverse mortgage, the house must be your primary residence, and the mortgage must be either paid off or minimal. There's no income or credit test. The older you are and the higher your home value (up to the maximum federal loan limit), the more equity you can pull out. Congress raised the reverse-mortgage loan limit to $625,500 through the end of 2009. After that, it reverts to $417,000, unless lawmakers intervene.

Fees, closing costs and insurance on reverse mortgages can add up to as much as 10% of the loan amount, making them a costly deal. Before you go this route, consider taking out a home-equity line of credit or downsizing to a less expensive residence. (Thanks to a new rule, you can use a reverse mortgage to buy a new home. For more details, see "Reverse Mortgages to the Rescue," at kiplinger.com/links/reversemortgages.)

McCarthy's family, including his seven grandkids, visit when they can, but much of his social contact comes from Ron Murphy, who works for McCarthy four afternoons a week. The two share an easy camaraderie. Such social engagement is critical for the elderly, especially when they are homebound, says Dize. "Isolation has a profound negative effect on the quality of life." For McCarthy, the interaction provides a welcome break in what would otherwise be a solitary day. "Ron and I get along great. We share the same sense of humor," says McCarthy. Adds Murphy, "It's like working with a friend."

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The late Jane Bennett Clark, who passed away in March 2017, covered all facets of retirement and wrote a bimonthly column that took a fresh, sometimes provocative look at ways to approach life after a career. She also oversaw the annual Kiplinger rankings for best values in public and private colleges and universities and spearheaded the annual "Best Cities" feature. Clark graduated from Northwestern University.