Choices
Planning for retirement should begin long before seniors are incapacitated and no longer able to care for themselves, report advisors at the American Association of Homes and Services for the Aging. While they are still healthy and even while still working, seniors can consider what kind of living situation they want to be in as they age. Costs of aging continue to rise and paying for retirement requires long-term saving and investing. While many people prefer to stay in their own homes, many realize the burden they place on their children and family members may be overwhelming and selfish. To remain independent and in charge of their lives, many seniors begin looking early for ways to afford to live in retirement homes.
Options
There are a number of ways to plan and save for the move into a retirement home. Personal savings and investment vehicles such as 401(k) plans from an employer, individual retirement accounts (IRAs), annuities and whole life insurance policies are popular savings plans that provide tax advantages to seniors saving for retirement. Regular income can be produced from many of the retirement accounts to pay for monthly bills, travel and personal expenses. Long-term care insurance is another popular choice that no longer just covers nursing home medical care, but has expanded to meet the needs of seniors looking to move into retirement homes. After years of paying a mortgage and building equity in a home, seniors often opt to sell their homes and use the proceeds to fund retirement living. Income that was used to maintain the home is then free to be put towards other living arrangements as well.
Costs
Most retirement communities have minimum age limits between 55 and 60, report consultants at Senior Resource. Many retirement communities provide active lifestyle amenities that include golfing, swimming pools, hiking trails and interest groups. Retirement homes built in cities are popular for seniors who like to remain close to their neighborhoods and entertainment and other activities they've always enjoyed. Amenities, food and services are combined in retirement communities to allow residents to share many of the costs. Researchers at Senior Resource report that the average annual income at active lifestyle retirement communities is $35,000 and more than half use the proceeds from the sale of their homes to buy into a retirement home. Entrance fees to retirement communities range from $20,000 to $400,000, depending on the level of luxury. Additional monthly maintenance fees can run from $400 to $2,000 or more per month.
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