Most older Americans don't want to move. Fortunately, the growth of home services for the elderly has made aging in place possible for those who can afford it. For those who can't, or think they can't, some creative financial thinking could help to make the difference.
If your parents' mortgage is paid off but they are still straining to make ends meet, they might consider a reverse mortgage or a sale-leaseback to ease their financial burden.
A reverse mortgage can allow a homeowner to borrow against a portion of the equity in the home without having to pay back any principal or interest until the home is sold, possibly after the owner's death. Borrowers can take the money as a monthly income stream, a lump sum, or even a line of credit to be tapped as needed.
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Sale-leasebacks typically involve parent and child, but an outsider can also be part of the deal. You buy the home directly from your parents (they act as the lender, taking back a mortgage), then you lease it back to them. Your down payment gives them an immediate infusion of cash and your mortgage payments provide a monthly income. In turn, your parents write you a check each month for the rent. Any difference between the mortgage payment they get and the rent they pay can be additional income for them.
Should your parents live with you? Don't be surprised if your aging, widowed mother doesn't want to move in with you. According to surveys, most seniors would rather move into a facility that offers some assistance than move in with a relative or friend. Message: They don't want to be a burden.
To allay that feeling, perhaps your parents would want to pay rent. However, if you know this living arrangement won't work out, consider these alternatives:
Independent-living communities offer healthy seniors a sense of security in addition to some basic services, such as housekeeping, meals, alarm systems, and a nurse or health clinic on-site. Housing options range from apartments to townhouses to single-family homes.
Assisted-living facilities provide round-the-clock assistance for residents who can't manage completely on their own. However, they are not nursing homes. Residents live in apartments or rooms, either alone or with another resident. Some long-term-care policies cover a portion of the costs. Contact the local Area Agency on Aging (it's in the phone book as part of the local-government listings) and Ask for a list of assisted-living homes in the area.
Continuing-care retirement communities, or CCRCs, offer a range of living options, from independent living to assisted living and a skilled-nursing home in the same development. Along with the range of housing, there is a range of fees at such facilities, including entry fees and monthly service fees. At some facilities you can buy your residence or a "membership" in the CCRC, then contract separately for the service and health care portion. Check the Commission on Accreditation of Rehabilitation Facilities' Web site for CCRCs in your state.
A skilled-nursing facility provides a high degree of care with a registered nurse on staff 24 hours a day and doctors and clergy on call. If someone needs special medicines or therapy but not round-the-clock care, then an intermediate-care facility may be sufficient. Although registered nurses are on staff, they may not be available 24 hours a day. Some nursing homes offer a combination of care levels, with separate wings for skilled-nursing and intermediate care. For names of nursing homes in your area, contact your state's Area Agency on Aging, as well as the Eldercare Locator.
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