It’s not uncommon for seniors to want to move into independent living. The number of caregivers in this country is expected to double by 2050. People are often attracted to these communities because they provide more amenities than nursing homes, including social activities and dining options. But even if your loved one wants to move into a retirement living community, it’s still important that you take financial considerations into account before signing on the dotted line. Here are some tips for planning financially:
The first step in planning for an independent living community is to review your investments. Decide what you want to keep and what you want to sell, and consider the following:
- Time horizon: Look at how long the money will be invested and how much volatility (up or down movements) is acceptable.
- Volatility: For example, a person planning on retiring soon will have a longer time horizon than someone planning on working for another 20 years. Therefore, they may make more aggressive investment choices since they don’t have as much time for their investments to recover from short-term losses.
- Investment objectives: What do you hope to achieve with this money? Do your goals align with one another? Are there any conflicts between them?
Downsizing is a major component of the transition process, but it can also be a stressful situation. If you’re considering moving into an independent living community, there are a few things to keep in mind.
- You may not want all of the items currently occupying your house or apartment space. While downsizing can help you save money on rent and utilities, it’s important to remember that most retirement communities do not charge residents for storage units. If things aren’t necessary for your life as a resident at a retirement community (such as clothing), consider donating them before moving in, so they’re no longer taking up space!
- Once you’ve decided what needs to go, plan, so you don’t have any last-minute surprises when packing up your house or apartment! Ensure everything gets packed safely and securely, so nothing gets damaged during transport. The last thing anyone wants is broken dishes when they move into their new place! For those who need help packing up their belongings, try asking friends and family members if they’d like some extra cash to help out with this task instead of hiring professional movers who may cost more than what would be earned.
Create A Budget
Once you’ve decided that independent living is right for you, creating a budget is next. The most important detail to remember when creating this budget is that it should be realistic. Moving into a retirement community is typically much higher than the costs of staying where you are now because they include rent, utilities, and meals at the new home.
The next step involves determining how much money you need each month for food and entertainment—like movies, concerts, and eating with friends or family members (depending on your situation). Making sure this number doesn’t exceed more than 10% of your monthly income will help ensure that all other necessary expenses are paid each month and give yourself some wiggle room for unanticipated expenses later down the road.
Work With A Financial Advisor
If you want to make sure you are financially prepared for the transition, it is important to consult with a financial advisor. Your advisor can help you determine how much money will be needed for your long-term care expenses in your current location as well as in any future locations.
Your advisor can also help you plan for retirement by helping you determine how much money needs to be saved over time and what investment options will allow those savings to grow at a healthy rate.
Whether you’re considering moving to an independent living community or have already decided to do so, it’s important to prepare financially. Do your research and talk with others who have experienced this transition. Then take steps to ensure your finances are in order before moving.