When Safety Is Not the Only Variable
Retirement planning today is less about living a life of leisure and more about durability.
According to recent data from A Place for Mom, senior care costs have reached record highs. Assisted living now averages about $5,419 per month nationally. Memory care is closer to $6,690 per month. Independent living runs around $3,200 per month. Even non-medical home care services average approximately $34 per hour.
Even more sobering, three months in assisted living can exceed $16,000. The price tag for a year in memory care can run $80,000. This reality is forcing many families to rethink a simple question: How long can we safely stay at home?
The Power of $100 in Prevention
But there’s good news you may want to share with existing borrowers. A recent Money Talks News article outlined ten home upgrades under $100 that can significantly reduce fall risk and daily friction inside the home.
Simple modifications like:
- Replacing round doorknobs with lever handles
- Installing motion sensor night lights
- Adding non-slip rug backing
- Installing grab bars in bathrooms
- Using a raised toilet seat
- Applying non-slip stair treads
- Adding a handheld showerhead
These are not cosmetic improvements. They are practical ways to mitigate the risk of needing professional care, whether at home or elsewhere.
Most moves into assisted living are not driven by long-term strategic planning. They are triggered by a fall. A bathroom accident. A broken hip. A loss of confidence after a scare.
If a $50 upgrade reduces the probability of a five-figure care transition. The return on investment is hard to ignore.
Delaying assisted living by even one year at current median costs can preserve more than $65,000 in retirement savings. Even a six-month postponement can preserve over $30,000 of a homeowner’s savings.
But prevention alone is not always enough.
When Safety Is Not the Only Variable
There is a point for many older homeowners when some level of in-home care becomes necessary. Perhaps it’s part-time help with bathing or other activities of daily living (ADLs). Maybe it is meal preparation, or companionship, or dispensing medication.
At $34 per hour, even 20 hours per week of in-home care can run close to $3,000 per month.
The question becomes: Where does that money come from? For many retirees, the instinct is to draw from investment accounts first. Liquidate retirement savings. Tap IRAs. Reduce portfolio balances that were meant to generate income for life.
But for homeowners, there is another asset on the balance sheet: housing equity.
Using Home Equity to Fund Care
Several equity-based loans may also help fund in-home care while allowing someone to remain in their home:
- A HECM line of credit
- Jumbo proprietary reverse mortgages
- Equity-based loans that are not reverse mortgages, that are similar to a pick-a-pay, a HELOC, or a second-lien mortgage
One of the most useful features of the federally insured Home Equity Conversion Mortgage is a line of credit. The unused credit line grows over time, increasing a homeowner’s borrowing power for when it’s needed down the road. HECM borrowers are not required to make monthly mortgage payments as long as they meet program obligations.
Jumbo proprietary reverse mortgages may offer higher borrowing limits for higher-value homes, which can be helpful in markets where home values exceed FHA lending caps.
Other equity-based (non-reverse) loans from reverse mortgage lenders allow the borrower to choose a minimum payment, interest-only, or any amount the borrower wishes to pay. Funds can be drawn as needed, making them well-suited for unpredictable care expenses.
The common thread is this: equity can be repositioned from dormant housing wealth into a flexible income stream to support care.
A Personal Observation
This is not theoretical for me.
I recently had two older relatives obtain a HECM.
They were reluctant at first. Their instinct was to protect the house and draw down retirement accounts instead. However, after considering how quickly their savings would run out, they made a strategic decision.
They established a HECM line of credit and are now using period draws to help fund in-home support services. Instead of draining what remains of their retirement accounts, they are preserving those assets for longevity while using housing equity to bridge current care needs.
For them, it was not about extravagance. It was about a planned sequence of withdrawals that allows them to age in place. It also allows them to protect their investment portfolio. By using their home equity strategically, they maintained independence and gained peace of mind.
Combining Prevention With Liquidity
The most durable aging-in-place strategy often combines two elements:
- Reduce preventable risks inside the home
- Create liquidity from housing equity to fund care when needed
The inexpensive safety upgrades buy time and reduce the probability of a crisis. The equity line provides a funding source if part-time or escalating care becomes necessary.
For homeowners with substantial equity and modest retirement balances, this sequencing can materially extend the life of their financial plan.
Postponing, Not Avoiding Care Forever
Aging in place is not about denial. There may come a time when assisted living or memory care becomes the appropriate setting. The objective is to avoid premature transitions triggered by preventable hazards or unnecessary financial strain.
When assisted living runs over $5,000 per month, and memory care approaches $7,000, the difference between reactive decisions and proactive planning can mean tens of thousands of dollars.
Sometimes aging in place begins with a $40 grab bar.
Sometimes it continues with a strategically structured line of credit.
In an environment where senior care costs are rising faster than many retirement portfolios, small home modifications and smart use of equity may be among the most underappreciated tools available to older homeowners seeking both independence and financial resilience.
By Shannon Hicks
