Understanding the Types, Costs, and Necessity of Long-Term Planning
In an industrial-driven society, retirement often proves more fantasy than reality. Thoughts rarely stray from the 9 to 5 immediacy, and preparing for the future seems impossible. People must work to live and live to work.
However, the day eventually comes for every man and woman to give a final punch their timecards (whether real or proverbial); and, according to Statistic Brain, these individuals share a very specific profile:
- Average Retirement Age: 63
- Average Length of Retirement: 18 years
- Average Life Savings at Time of Retirement: $42,797
- Average Percentage of People Financially Prepared for Retirement: 4%
- Average Percentage of People Financially Dependent on More Than Savings (including Social Security, Family Members, or Charity) for Retirement: 63%
This paints a stark picture - one that must be carefully examined by those considering retirement homes.
What is a Retirement Home?
A retirement home, simply explained, is any privately owned facility designed to accommodate individuals in their senior years. It's intended for those wishing to maintain their lifestyles while also experiencing on-site support and care.
Individuals should note that retirement homes, also known as assisted living facilities, are not the same as nursing homes. These institutions cater to those in need of prolonged medical attention, and their focus shifts from enabling independence to promoting healing.
What Types of Retirement Homes Are There?
Retirement homes are quickly defined. Within that definition, however, is a broad series of specialized categories. These include:
Subsidized Senior Housing
According to a study conducted by the U.S. Department of Housing and Urban Development (HUD), one-third of elderly individuals experiences difficulties in finding a place to live. This proves no less true in the search for retirement facilities, which is why subsidized senior housing is now available. These programs provide those with low incomes the opportunity to stay within government-sanctioned apartments, townhomes, and more.
The North Dakota Legislative Council defines congregate care as "an environment where a person lives in an independent apartment setting, which may include a central lobby, dining room, and activity areas." These retirement homes allow individuals to maintain their independence. They may qualify for housing assistance programs, but are typically paid for privately.
Retirement communities are master-planned facilities. They allow individuals to live in private condos, apartments, townhouses, or stand-alone structures, promoting independence while also delivering a more active social scene. They're often defined by both age restrictions (55+, 65+, etc.) and income restrictions ( for example, these facilities are privately funded and require higher monthly fees. Subsidizations are rare but can be applied for).
Continuing Care Retirement Communities
Continuing Care Retirement Communities meet both present-day and future needs. These facilities allow those in good health to plan for potential medical issues, featuring both congregate care and assisted living programs within the same campus. This enables residents to stay within their familiar environments, no matter what their conditions. These options are privately funded, and don't often accept government subsidization programs.
Each senior has a unique set of needs. These homes address those needs, providing comfort, connections, and support.
What is the Monthly Cost of Care?
Choosing a retirement option is easy. However, affording it is less so. Financing these facilities is a challenge for their owners, and resident fees are needed to supplement the many costs. These fees, according to a study by Senior Homes, vary greatly, with monthly minimums ranging from $499.00 to $3,250.
There is no established minimum (or maximum) standard for monthly retirement home costs. Each facility can instead set its own rules. Seniors must remember this when considering their options.
The Importance of Preparation
Identifying the types of retirement homes - as well as their subsequent fee demands - isn't the final step of the senior journey. It's only the first, with individuals then needing to carefully plan for their many needs.
This planning is all too rare. According to a study conducted by the NORC Center for Public Affairs Research:
- Only one-third of Americans claim to have money set aside for retirement and long-term care.
- More than half of Americans admit to not planning for their long-term goals.
- More than 25% of Americans wonder whether Medicare or similar services will counter their long-term expenses, with these questions often left unresolved until it's too late.
- Approximately 25% of Americans overestimate the coverage capacities of their insurances, leading to less savings.
- An estimated 70% of Americans say they don't feel prepared for long-term care.
These statistics are both startling and undeniable, revealing the lack of understanding within the retirement field. There is a disconnect between American seniors and their housing options.
It's therefore imperative to seek out information. Individuals of all ages must educate themselves about the costs of retirement, and how those costs will unfold across the years. Compare facility types, monthly state medians, government supplement opportunities, and more to ensure success.
A retirement home is far more than a collection of walls and windows. It stands as the next chapter for seniors, offering them greater control over both their lifestyles and their needs. Achieving that control simply requires proper planning.