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Aging in Place is On the Rise, But Will Seniors Be Ready to Remain at Home?

Nationwide, more than 10,000 people reach the retirement age of 65 each day. And if current trends continue, the senior citizen demographic will outpace the number of children in the U.S. by 2030. While it can be excellent news that Americans are living longer, extended lifespans do bring up several issues, one of which being: where and how will all of these older people live?

As we age, we come to expect cognitive and physical changes. After all, 35 million men experience some level of hair loss or baldness throughout the U.S., with countless others enduring all kinds of bodily challenges. Nursing homes and retirement communities have been popular options for seniors who need some extra help and who want additional social stimulation, but many seniors have decided to explore more comfortable alternatives in recent years.

Despite the fact developers of senior housing have made major efforts to develop better facilities for aging generations, it’s clear that’s not really what seniors (or soon-to-be seniors) want. Thanks to perceived convenience and cost savings, aging in place has become the ideal for many older folks. In fact, more than three-quarters of Americans over the age of 50 now say they’d prefer to live within their current communities — and their existing homes — for as long as possible. Rather than downsize to a condo or apartment (which are housing units that 95% of pest professionals report treating for bed bugs) or pay into a senior community, older folks would much rather stay put. As a result, the Wall Street Journal is now reporting that the “aging in place” movement will likely throw a major wrench in the senior housing industry.

Senior housing isn’t going away completely, of course. Many people may not have the option of aging in place, often due to more severe physical or cognitive limitations or waiting too long to make necessary changes. Since roughly 75% of Americans experience foot health problems at some point, mobility can be an issue that forces some Americans out of their homes to more accessible living situations. And if a senior requires round-the-clock care, some families may find it’s more economically sound to move their loved one into a facility and sell their loved one’s property. Most often, families make this difficult decision when their loved one has dementia. About 64% of people aged 65 and up in nursing homes have Alzheimer’s disease or another form of dementia. In these cases, families tend to find moving to a nursing home is a better option than undertaking home renovations and hiring outside help.

However, aging in place is often a viable choice if you plan ahead and make the right adjustments to your residence. Approximately 83% of homeowners choose a new roof based on longevity, and that factor should be high on your list when zeroing in on renovations for aging in place. You’ll need to think in the long term if you want to remain at home into your twilight years. Bathrooms and kitchens tend to have the most hazards and inconveniences for older folks, which means these spaces will need to be prioritized. Making sure pathways are clear and spacious can prevent falls and ensure seniors with mobility aids can safely navigate throughout the room, while non-slip flooring options (with no rugs) should be prioritized. In the kitchen, electric stovetops with unraised burners are better for cleaning and fire prevention, while countertops should have rounded edges and include multiple levels to ensure accessibility. Bathrooms, on the other hand, should feature grab bars or handrails and accessible bathtubs and showers. Throughout the home, adequate lighting is a must. And if your home has more than one story, you’ll certainly need a safe way for occupants to get up and down the stairs without the risk of injury.

Keep in mind that these home improvements won’t come cheap. According to a report published by the Joint Center for Housing Studies at Harvard University, the majority of senior homeowners who can afford to make these kinds of improvements pay for those projects out of their savings. Some of the most expansive aging-in-place renovation projects can cost hundreds of thousands, depending on the home’s location. And since a recent survey conducted by SCAN (formerly the Senior Care Action Network) found that 60% of seniors have less than $10,000 in savings, including retirement plans and investments, it’s clear that some older folks simply won’t have the financial means to remain at home in a safe environment.

Still, the dislike of senior housing alternatives (which come with their own cost burdens) might be enough to convince homeowners in their 40s and 50s to start budgeting and renovating with time to spare. By not waiting until retirement to make those housing decisions, seniors may be afforded a more comfortable lifestyle and fewer financial worries later in life. Overall, there’s no easy choice here. But since the preference for most American seniors is to remain where they are, it’s at least a good idea to start thinking ahead and remodeling a home before you need to.

Retirees See Economy Glass As Half Empty

By Chris Taylor

NEW YORK (Reuters) – With 69 straight months of job growth, unemployment at a seven-year low, the Dow Jones Industrial Average near all-time highs and the Federal Reserve confident enough to hike interest rates, you might think a sturdy U.S. economy has given everyone reason to cheer.

Apparently not everybody. New data from Wells Fargo indicates that something is spooking a sector of the U.S. population – the nation’s seniors – in a serious way.

On its Investor and Retirement Optimism Index, which tracks investor sentiment, retiree optimism dropped 23 points in a single quarter.

“It was a very big drop, and the first time in over a year that retirees were less optimistic than non-retirees,” says Zar Toolan, director of advice quality for Wells Fargo Advisors.

Over the same three months, non-retiree investor confidence actually went up by 10 points.

Michael Sokal, a 70-year-old retired teacher in Worcester, Massachusetts, is among the worriers.

“Our portfolio isn’t what it was when we first retired,” Sokal says. “We have been drawing it down, and the performance isn’t what we hoped for. It’s a big concern.”

When Wells Fargo analysts started digging a little deeper, they discovered a few different factors at work.

COSTS RISE, INVESTMENTS FLAT

With the cash in their bank accounts earning virtually nothing, and the stock market essentially flat for the year, retirees have not been seeing any portfolio improvements. Inflation, a notorious portfolio-killer, looms whenever an economy is heating up.

Meanwhile, living expenses are lofty. Healthcare costs in retirement for a 65-year-old couple now stands at an estimated $245,000, according to Fidelity Benefits Consulting.

What really drives the point home for retirees is that they have a shorter investment horizon than those still in the prime of their careers. An investor at age 70 or 75 cares very much about shorter-term portfolio gains.

As a result, financial planners report having do an increasing amount of hand-holding with their senior clients.

“They worry about ISIS, rising interest rates, income disparity, European recession, dysfunctional Congress, slowdown in China, and falling commodity prices,” says Austin Frye, a financial planner in Aventura, Florida. “There is, in fact, a lot for them to worry about.”

STEPS TO TAKE

Financial advisers says seniors need take a deep breath, reassess where they are at, and not make any rash portfolio decisions.

Most of all, excessive worry indicates that you may not be as risk-tolerant as you thought, suggests Wells Fargo’s Toolan.

If you come to that conclusion, it is perfectly reasonable to revisit your asset allocation, particularly if you have not done so in a few years.

Wells Fargo has a quiz to that effect (http://bit.ly/1rmlGWT), which can design a portfolio that will help turn down that worry dial.

Even if you are not fretting excessively, it is possible your allocation has become out-of-whack in favor of higher-risk equities after such a lengthy bull market. Shifting a percentage into fixed income will not only steady your portfolio’s volatility, but will help you sleep better at night.

After all, the 2015 stock market was not that bad, says Frye, the financial planner.

As for Michael Sokal, he has been slowly shifting his portfolio towards a more moderate risk profile, and has eased back on things like travel expenses.

Still, that hasn’t taken the edge off the dread he feels about the economic challenges on the horizon.

“One retiree friend of mine canceled a trip he had been looking forward to for a long time, and another decided to just keep working for years to come,” says Sokal.

“Our financial adviser once told my wife and I that at least one of us should plan on living to 100 – and that really struck home.”

(The writer is a Reuters contributor. The opinions expressed are his own.)

(Editing by Beth Pinsker and Bernadette Baum)

Photo: Earl Gilbert, 97, plays chess at Royal Oaks retirement community in Sun City, Arizona, January 8, 2013. REUTERS/Lucy Nicholson

Seniors Gear Up For The Sharing Economy

By Mark Miller

CHICAGO (Reuters) — Five dollars may not sound like much pay for doing a job, but do not tell that to Brooke Folk.

At age 67, Folk spends up to 30 hours a week on projects generated through Fiverr.com, a shared-economy website that requires all its vendors to offer something to customers for just $5 and takes a 20 percent commission on earnings.

Folk, a former radio announcer and small business owner who lives near Pittsburgh, earns approximately $10,000 per year in supplemental income to his Social Security benefits on the site writing short stories and narrating scripts. He also sells — no surprise here — an e-book explaining how to succeed on Fiverr.

“When I first heard about it, I wondered if I should do something for $5, but what happens is you often upsell customers something additional. The most that I’ve billed an account is $1,300, and that’s a far cry from $5.”

More Americans than ever intend to keep working past traditional retirement age — whether it’s just to keep busy or because they need to financially — and entrepreneurship is becoming a more common alternative to full time jobs.

Entrepreneurs age 55-65 accounted for 26 percent of all startups last year, up from 15 percent in 1996, according to the Kauffman Index of Entrepreneurial Activity.

Fiverr may be a millennial-dominated platform with just 2 percent of sellers over the age of 55, but growth in vendors age 55-64 shot up 375 percent at the end of the second quarter this year compared with a year ago, according to the company.

Starting a business may sound like a risky investment of capital, but it does not have to be. A “micro-enterprise” — or side-gigging — can help retirees generate supplemental income without putting capital at risk and perhaps even enough to stall filing for Social Security or ease the pressure for drawdowns from retirement portfolios.

Folk is participating in an emerging online ecosystem that helps micro-entrepreneurs leverage their accumulated knowledge and experience. Other platforms include retail site Etsy.com (handmade and vintage items), and freelance marketplaces Guru.com and Freelancer.com.

But the action is not limited to the knowledge economy. For example, Airbnb.com recently noted that 10 percent of its hosts are over age 60.

Older Drivers

And AARP’s Life Reimagined — a program focused on guiding people through life transitions — recently announced a partnership with Uber aimed at recruiting older drivers. Life Reimagined has 1.4 million members; for Uber, the alliance is part of a strategy to hire hundreds of thousands of drivers as it works to meet surging demand for its service.

If driving strangers around in your own car for hours on end does not sound like an ideal retirement to you, AARP begs to differ. While it is not putting an age limit on applicants, AARP sees the Uber program as ideally suited to the younger end of its constituency — workers over 50 who have been sidelined by economic turbulence.

“The shared economy is offering people an opportunity to follow their hearts, have flexibility in their work, be empowered to make money, and be their own bosses,” says Adam Sohn, vice president of strategic initiatives at Life Reimagined.

“And, for millions of people who are doing what they don’t love, or have been pushed out of precarious jobs and are having trouble fighting their way back into the workforce, this kind of work also can provide a transition to whatever is next.”

Microentrepreneurship certainly offers a path around the age discrimination that older workers face.

In an AARP study released earlier this year, more than half of older workers who lost jobs during the Great Recession said age discrimination had a significant impact on their ability to find new work. But in the gig economy, if you can get the job done, no one cares about your age.

Nearly 25 percent of Uber’s drivers are over age 50, according to a study commissioned by the company recently – and among new drivers with no previous professional driving experience, 39 percent are over 50. Three percent were retired before driving for Uber, and 8 percent were unemployed; one in five drivers was employed in a temporary job.

Uber does not disclose data about the earnings of its drivers, but the report states that drivers are making $19 per hour on average.

(The writer is a Reuters columnist. The opinions expressed are his own.)

(Editing by Beth Pinsker and Alan Crosby)

Photo: Alper Çuğun via Flickr