WSJ Your Money Briefing - It’s Getting Harder for Americans to Grow Old in Their Homes

Episode Date: September 5, 2024

According to an AARP survey, 77% of Americans aged 50 and older want to live as long as possible in their current home. But rising costs mean that pursuing this dream has gotten harder. WSJ “Turning Points” columnist Clare Ansberry joins host J.R. Whalen to discuss how people are preparing their finances to stay in their home.  Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Ecolab water for climate less water more growth Results will vary learn more at Ecolab.com slash EWC Ecolab water for climate Transforming the way the world thinks about water Here's your money briefing for Thursday, September 5th, I'm JR Whelan for The Wall Street Journal fifth. I'm JR Whelan for the Wall Street Journal. Every day more than 11000 people in the U.S. turn 65. According to a survey from AARP of Americans 50 and over,

many don't want to downsize their home as they get older or move in with family members. They want to stay in their current home. They plan. they may save. Running out of money is a big concern. The other concern is being a burden on family members. So many people, their kids have their own careers, they may not live nearby. So they really don't want to impose on them. We'll talk to Wall Street Journal columnist Claire Ansboury after the break.

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Claire, why has it become more of a challenge for Americans to afford staying in their homes as they get older? Well, the cost of doing so is really soared in recent years. It's now more than twice as expensive to pay for in-home care than the annual medium costs of a private room in a nursing home. And it's really a matter of supply and demand. The demand for in-home care has only increased because the population is getting older.

The fastest growing cohort is in their 80s. That group also needs the most medical care. We're living longer, but we're maybe not living as healthy as we did. And there's also not enough in-home care workers. That's a career that has seen a lot of turnover since the pandemic, and it's traditionally been a low- low paying career. So we've got more people needing it and fewer workers. How much can insurance help with these costs? Long-term care insurance can help, but there are limitations. So you really have to check the policy. Some may limit coverage, say, two to five years. Some may have a maximum benefit per month or a lifetime benefit. So you really got to check and see how much it covers. Some have a waiting period, like 90 days.

So you have to cover those costs in the meantime. Some have coverage exclusions, like they wouldn't cover mental health or other things. And also by the time people want to get that insurance, the premiums may be so high if they're older or if they have pre-existing conditions. What are some of the primary concerns of older Americans who want to remain in their homes? There's two big ones. One is outliving their money. They plan, they may save, but they may not expect to live into their 90s. Running out of money is a big concern. The other concern is being

a burden on family members. So many people, their kids have their own careers, they may not live nearby, so they really don't want to impose on them. They may try to do things themselves. Other concerns is the home repairs that they may have to make if they live in a two-story home. Steps are challenging. Another concern is transportation if they're living at home and suddenly they can't drive. How are they going to get to the stores, their doctor's appointments? How did the homeowners you spoke to plan their finances for the costs of staying and getting care? Retirement savings, buying long-term

care insurance, some of them get their home modified early on. Planning ahead, are we going to need this? Maybe we need to move to some place where we can have a single story home. The savings and the long-term care insurance and putting money aside. But sometimes it's not enough. One family, they had to take out a home equity loan just to pay for the in-home care. And one of the family caregivers ended up filing for bankruptcy protection because she just drained all of her finances and savings helping to care for her parents in their home. What types of costs do caregivers often overlook? What types of costs do caregivers often overlook? A lot of it is the home modification costs, things like the ramps, the bathrooms, the

special wheelchairs, the respite care, adult daycare. And I think too, a lot of people assume that Medicare is going to cover a lot of things, but Medicare really covers only post-hospital nursing home care and for up to 100 days and generally doesn't cover home care costs. And Medicaid might cover it through their programs, but they require people to exhaust their assets. Are there information resources to help guide children of elderly parents through this? Yeah, a real basic one and one that's been around for a long time, are local area agencies on aging.

And they have a lot of resources that are available. Things like meals, they also can guide people to places that can provide medical equipment. How have caregivers been able to generate income, allowing them to stay at home with their loved ones? medical equipment. How have caregivers been able to generate income allowing them to stay at home with their loved ones? Some of them have to put off their retirement and work maybe a couple extra years to continue their income to pay for the home modifications or to have the more generous health care benefits. Some can work remotely. The key thing is being flexible for family caregivers

so the remote work can help. Some people have had to pick up other jobs, like DoorDash, to get money for the immediate needs. Some states, too, allow family caregivers to be paid under certain Medicaid programs. We've talked a lot about planning, planning for the money, planning for how to arrange the house. Do people sometimes underestimate the impact of the emotional toll of this experience? The mental health aspect is really

significant and that we don't give it enough attention. And one of the big things is that people never feel they're done or they're always on call. They always have to be alert. People who care for someone at home often say they can't sleep because they feel like the person that needs their care might have a need or they're afraid of sleeping through it. So there's always kind of an edge. And again, there are resources out there in terms of a lot of these discussion groups and forums of people who have been through this and just kind of airing how they've survived and where they found support can be helpful. That's WSJ's Claire Ansboury. And that's it for your Money Briefing. This episode was

produced by Ariana Osborne with supervising producer Melanie Roy. I'm JR Whalen for the Wall Street Journal. Thanks for listening.