For many people, “retirement planning” means socking away as much money as possible, to be used decades later. But one area to really think about is where you want to live when you’re retired.
Retirement can occur in phases, so your needs can change over the years as you age. It’s important to think ahead about your desired living situation so you can prepare financially, emotionally and logistically.
Once you start homing in on a retirement date, it’s a good time to actively plan where you may live, both in the short term and the long term.
Initially, you may stay put in your current residence. But as you age, health or other issues could spur the need for change. Or, you may simply want a different lifestyle.
If you haven’t researched your options yet, you might assume your choices are essentially limited to living in your home or in a nursing home. But there’s actually a wide range of senior housing options in between.
Knowing the possibilities and planning ahead financially will make any transition later in life easier.
Let’s explore 8 of these senior housing options to consider.
1. Aging in place
Given the choice, an overwhelming 77% of adults ages 50 and older want to remain in their homes as they age, according to a 2021 survey by AARP. That figure has held steady for more than a decade, the advocacy group says.1
And many retirees do remain in their homes, although they may need to make some modifications, such as adding a no-step shower, grab bars around the house or a ramp to the front door. At some point, you might also need caregiving assistance, either from a family member or an outside paid caregiver.
Home care assistance from a health professional can be expensive. For example, in 2021, the annual cost of a home health aide—someone who can help you with daily living activities (personal care tasks such as bathing, dressing and eating), as well as monitor your mental and physical condition—was $61,776 for an aide working 44 hours a week. That figure is projected to rise to $111,574 in 20 years, according to an annual survey by insurer Genworth Financial.2
2. Move in with family
If you have an adult child or other family member with extra room, you might be able to live with them. Some families are adding Accessory Dwelling Units (ADUs) to provide separate living quarters for older relatives.
An ADU can be a converted basement or garage, or a stand-alone prefabricated residence on the family’s property, that enables retirees to live close to their children and grandchildren while still maintaining some independence.
The number of multigenerational households, made up of two or more adult generations, has been increasing: As of 2021, according to the Pew Research Center, 18% of the U.S. population lived in a multigenerational home, compared with only 7% five decades earlier.3
And multigenerational living can have multiple benefits beyond cost savings. In a 2021 poll by the nonprofit Generations United, 8 out of 10 people living in a multigeneration household said it has enhanced relationships among family members. A similar number said it made it easier to provide care for a relative.
That said, 75% surveyed acknowledged that multiple generations living under the same roof can be stressful at times.4
3. House sharing
Think “Golden Girls,” the 1980s sitcom in which four older, single women shared a house owned by one of them.
House sharing is typically an option for retirees who can live independently but want the benefits of companionship, reduced housing expenses or, if you own the house, some extra income as your co-residents pay you rent.
Sometimes the house-sharing arrangement is with a person of the same age, but it can also be with someone who’s a generation or two younger.
Online referral sites, such as Silvernets.com and Nesterly.com, are available to match homeowners with roommates and provide background checks.
4. Independent living community
As the name implies, this arrangement is for older adults who can care for themselves, and it usually doesn’t provide medical care or a nursing staff. Independent living communities, also called retirement communities, are typically age-restricted for residents who are, for example, ages 55 or older.
You may have a choice of living in a condo, townhouse or villa that you either rent or buy, although most people opt to rent.
A chief selling point of these active living communities is the range of amenities and activities that are available to residents. These can include fitness centers, golf courses, classes, travel programs, dining plans, housekeeping and home maintenance.
The cost to live in an independent living community varies greatly depending on the state, type of housing you select, and the amenities provided. Residents can expect to pay an average of $1,500 to $10,000 per month, according to AssistedLiving.org.5
5. Assisted living
This is an option if you need help with some daily activities but don’t require the heightened medical care available in a nursing home.
Residents of assisted living facilities typically have their own apartment but share common areas where they can socialize with others. Besides help with daily living activities, an assisted living facility provides meals, monitoring of your medications, housekeeping and laundry services, as well as recreational and social activities.
According to Genworth, the annual cost of a private one-bedroom at an assisted living facility averaged $54,000 in 2021 and is projected to increase to $97,530 by 2041.6
6. Continuing care retirement community (CCRC)
Sometimes called a life plan community, a continuing care retirement community (CCRC) offers a variety of housing options and sees you through many phases of retirement, from independent living and assisted living to memory care and skilled nursing care.
You usually must be at least age 60 to buy into a CCRC and be able to live independently in one of the community’s houses, condos, townhomes or cottages. CCRCs also offer a variety of activities and amenities, such as classes, shops, hair salons, dining facilities, pools, tennis courts, golf courses and hiking trails.
If or when your care needs increase, you can move from the independent living housing into the assisted living facility or skilled nursing care without leaving the CCRC campus.
All of this comes at a cost, and it’s steep. The majority of CCRCs charge an entrance fee, which averages $414,722 in 2022, according to the National Investment Center for Seniors Housing & Care, an industry research group. On top of that, you’ll pay a monthly fee for meals, utilities, housekeeping and other services, averaging $3,774 for those in independent living.7
Many people finance the high CCRC entry fee with the proceeds from the sale of their home.
CCRCs carefully vet applicants’ finances to make sure they can afford the upfront fee as well as the monthly service charges that likely will rise over time. And before committing to a CCRC, applicants, with the help of their financial professional, should vet the CCRC’s finances to make sure it can meet its obligations.
There are about 1,900 CCRCs across the country, and many have waiting lists. MyLifesite, a resource for information on CCRCs, recommends planning ahead by getting your name on the waiting lists of three or four CCRCs that you like.
7. Memory care
This is residential care for people who are generally healthy but suffer from dementia or Alzheimer’s and no longer can live safely on their own. Residents typically have their own apartment and receive services similar to those offered by assisted living communities.
Additionally, a memory care facility provides a secure, structured environment for residents to help increase safety and reduce confusion. Staff is trained in dementia care, and these living facilities offer a variety of recreational therapy programs designed to slow the progression of cognitive decline.
Nationally, the median cost of a memory care facility is $5,430 per month, according to an analysis by A Place for Mom, a senior care referral service.8
8. Nursing home
This is for people who need medical supervision and more help than assisted living can provide. Besides assistance with daily activities, a nursing home provides around-the-clock skilled nursing care, therapy, and medication management, as well as some social activities.
Only 8% of people ages 85 or older live in nursing homes, and the average stay is 2.3 years, according to government figures.9 Still, if you need nursing home care, it can be expensive.
Medicare doesn’t pay for extended long-term care, although Medicaid will do so for those with limited means. The annual cost of a private room at a nursing home in 2021 was $108,405. That amount is anticipated to rise to $195,791 in 20 years, according to Genworth.10
What to consider when deciding when to make a move
There’s no one-size-fits-all answer for when you should change your living situation as you move into and through retirement. People age differently, and their health care needs vary, too.
You might move to independent living, for example, after becoming an empty nester because you seek a retirement community that offers golf, travel opportunities and other activities that you can enjoy with people your age.
Or, if you’re having difficulty with daily living tasks, you might choose to hire a home health aide or move into an assisted living residence.
As time goes on, you or family members may see a need for you to receive more extensive care to ensure your day-to-day needs are met. Ultimately, your safety should be your paramount concern.
Moving at any age can be emotional. But moving in retirement can be made easier by knowing about your options ahead of time and making the best choices for you that will make you happy.
The importance of planning ahead
Many people underestimate longevity, which could cause them to fail to make a financial plan for any necessary housing changes through the decades.
In fact, according to a “longevity illustrator” by the American Academy of Actuaries and Society of Actuaries, a 65-year-old man in average health has a one-in-three chance of living to age 90. On the other hand, a 65-year-old woman has a 44% chance of hitting that age. And the odds of each one living that long goes up significantly if they’re in excellent health.11
You’ll have a variety of housing options as you age, but the cost will rise depending on the location, amenities and level of care. The NEA Retirement Program can help you prepare financially both with self-directed plans as well as with assistance from a financial professional who specializes in helping educators prepare for retirement.
Long-term care insurance also can help. In addition to providing coverage for a home health aide, it can assist with the expense of assisted living or more extensive nursing home care. The NEA Long-Term Care Program offers a variety of plans, or you can customize your benefits. Policies are also available for your spouse, parents and adult children.
Be sure to check out “An Educator’s Guide to Retirement Income Planning." This free guide for NEA members covers public-school pensions, Social Security and more. Plus, you can use the 2-page checklist to assess your current situation so you can plan to retire on your terms.
1 Despite Pandemic, Percentage of Older Adults Who Want to Age in Place Stays Steady, AARP, Nov. 18, 2021.
2 Cost of Care Survey, Genworth Financial, 2021.
3 The Demographics of Multigenerational Households, Pew Research Center, March 24, 2022.
4 Family Matters: Multigenerational Living is on the Rise and Here to Stay, Generations United, 2021.
5 What is Independent Living and How Much Should It Cost? AssistedLiving.org, 2022.
6 Cost of Care Survey, Genworth Financial, 2021.
7 Interview with a National Investment Center representative, August 2022.
8 Everything You Need to Know About the Cost of Memory Care, A Place For Mom, March 31, 2022.
9 2020 Profile of Older Americans, Administration on Aging, May 2021. What is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports? U.S. Health and Human Services, April 3, 2019.
10 Cost of Care Survey, Genworth Financial, 2021.
11 Actuaries Longevity Illustrator, American Academy of Actuaries and the Society of Actuaries, August 2022.