| There goes conventional wisdom!
| Observations of a Newly Minted Older Person
| Louis Tenenbaum
Yesterday, I wrote about a paradox a colleague raised while I was co-teaching an OLLI (Osher Lifelong Learning Institute) course with Victor Rezmovic and Steve Gurney.
- Most people say they want to age in place
- It’s the cheapest option available
- Yet plenty of people move anyway
I reviewed a MarketWatch article, claiming the block is psychological inertia that gets in the way of planning and picturing our own future frailty. I countered with my view that wise consumers don’t buy until they see what they want or know what they need. I pledged to teach more about the economics of the decision, recognizing that the size of one’s savings does not correlate as the impetus to make a decision.
Respond to our reader survey for a chance to win a $25 gift card
But that’s only part of the answer. Another is a refutation of common wisdom, that when a crisis emerges, sufficient savings will solve the problem. It comes from an article by Andrew Montesi in HECMWorld, a trade journal for the reverse mortgage industry. It forced me to update how I think about this decision-making.
The math has shifted
The HECMWorld piece changes the conversation. Andrew Montesi (Publisher at HECM World and President of Reverse Focus.) argues that aging in place used to be a lifestyle preference, but it’s becoming the financial default, whether people plan for it or not.
A few numbers stood out:
- Homeowners 62 and older are sitting on a record amount of home equity, the largest pool of retirement wealth many of them have, even when their monthly cash flow may be tight.
- Downsizing, long assumed to be the obvious money-saving move, is no longer straightforward: many longtime owners would trade a historically low mortgage rate for a much higher one, and older sellers tend to net less on a sale than younger ones, especially if the move is precipitated by a health crisis.
(Lookout for a future column regarding the problem and costs of deferred maintenance by older consumers in older homes)
- Senior housing supply isn’t keeping pace with demand. Occupancy has been climbing for years, and new construction has slowed, which means the community-living option may simply not be as available, or as affordable, as people assume. There are now long waiting lists at many senior housing complexes.
People with resources often assumed the money itself was the plan, meaning that when the time came, they could simply buy their way into whatever solution they needed, whether they liked it or not. But these stats mean the conventional wisdom is out the window. More people may end up aging in place as the financial logic of moving , even for people who could once have written the check without thinking twice, changes. And that makes planning even more important. In short, the “just move” option is no longer the simple backup plan it used to be.
So what does answer the attendee’s question?
More important than the obvious question of what keeps people from planning proactively to age in place is, what would influence people to start planning?
The big lesson of Shall I Stay or Shall I Go? is not that people should choose one path over the other, but that whichever path they lean toward, the planning must start well before the decision feels urgent. Though I did not push the point with a bunch of horrible anecdotes, most in the room have friends or relatives who were forced to move in a crisis. If fear is what encourages planning, this could be a factor.
I will keep teaching this course, understanding that the measure of success depends on the actions students take in the months and years ahead. I may even talk to the OLLI program about sending out a survey after a few rounds to see what people do after taking the course.
Column three explores my ideas about motivating people to make home modifications proactively.
Louis Tenenbaum is a longtime advocate for aging in place, co-founder of the HomesRenewed™ Coalition, the HomesRenewed™ Resource Center, and HomesRenewed Ventures, LLC and a nationally recognized expert on home modifications that support independent living. Discover more columns in this series.
Leave a Reply