Retirement Might Cost More Than You Think

Saving for retirement requires more than putting away cash for early bird specials, golf, and leisurely cruises – especially if you plan to stay in your home.

The number of people in their 80s and 90s living alone will rise dramatically in the next two decades, according to a report from the Joint Center for Housing Studies at Harvard.

Those planning for retirement should consider what they may need down the road to live independently, such as home aides, stairlifts, and other accommodations.

Help at Home

The average cost of a full-time home aide in 2023 was $5,720 a month, according to a survey from Genworth, a provider of long-term care insurance. And that’s for 40 hours per week of assistance. If you need 24-7 care, the costs could climb to more than $24,000 a month.

“The new inheritance is not having enough money to give to kids but to have enough money to cover long-term care costs,” Liz O’Donnell, founder of online caregiver community Working Daughter, told the the Wall Street Journal.

Renovating your home for aging can also be pricey. Stairlifts can cost as much as $9,000 before installation, not to mention other accommodations you may need to consider such as retrofitting your home for safety with grab bars or an electric stove that shuts off automatically.

Saving for the Future

While Medicare and other government programs can provide some financial assistance to seniors, you’ll most likely need a healthy retirement fund to cover the cost of home aides and other expenses.

That’s why it’s vital to start saving now. If your employer offers a 401(k) plan, a smart saving strategy is to maximize your contributions. Other ways to save for retirement include contributing to an IRA account, paying down debt, and creating a budget. The more you put away, the easier it will be to live comfortably at home for decades after you retire.

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