Ageing in place isn’t simply a decision to do nothing and stay in your family home. It’s most likely that you’ll need to prepare to ensure your ongoing well-being – and budgeting is a big part of the preparation stage.
So, what are the costs of ageing in place that you need to consider? And more importantly, how can you cover them comfortably?
How to budget for retirement at home
Ageing in place isn’t always the cheapest option, even if you own your home outright. One way to determine how you can meet your financial needs is to create a retirement budget that identifies potential expenses.
This budget should consider the cost of:
- Mortgage repayments (if any)
- Credit card and other debt repayments
- In-home care support
- Home maintenance/renovations for comfort and safety
- Utilities, rates and home insurance
- Phone and internet
- Medical, dental and mobility aid costs
- Food and personal care items
It could also consider leisure activities, such as exercise classes, visits to the cinema or theatre, meals out or holidays.
Using your Household Capital™ to age in place
Once you know the costs of ageing in place, it’s time to think of strategies that will help you cover them. Getting a reverse mortgage can be an excellent option, as it allows you to access the wealth built up in your home - your Household Capital™ - and use it in a variety of ways that will make ageing in place safer and more comfortable:
Home renovations and modifications
‘Retirement ready’ means different things to different people. For some, it means a complete renovation – a new kitchen or bathroom, better lighting or an outdoor haven. For others, it may be more minor modifications, like replacing a leaking roof or installing non-slip surfaces indoors and out.
Getting a Household Loan means you can prepare your home for ageing in place without drawing on your income-producing assets and risk running out of money later in life or having to access credit to make the necessary updates.
Mobility and access
Mobility aids such as scooters, wheelchairs and wheelchair-accessible vehicles are now commonplace among older Australians, increasing their independence and improving their quality of life while ageing in place.
Mobility aids can be as simple as a walking stick or as complex as a wheelchair access car, and some can be quite expensive. Additionally, when you start using a mobility device, you may also need to invest in renovations and adapt your home to your new mobility needs. If you’re in a wheelchair, for example, you may need to renovate your bathroom to include a specialised shower with a ramp. Accessing your home equity can help you to fund all of this.
Health and well-being
The rising cost of living can be felt in many areas of life, not least in supporting your health and well-being. Paying for medical and dental appointments and procedures – as well as keeping up with rising health insurance premiums – can sometimes be difficult on a fixed income.
Using your home equity to complement your super and Age Pension will provide you with an income stream or lump-sum payments that you can use to meet unanticipated medical expenses.
Help and support
Many retirees require some support around the home, whether that is help with household chores and cooking, assistance with personal care or grocery shopping, or simply companionship.
While government packages are often the first choice to cover in-home care costs, waiting lists are long and when received, don’t always meet your needs, particularly where specialist care is required. Using your home equity can provide greater choice and flexibility when it comes to accessing services and selecting care providers.
Download our free ‘Ageing in Place’ e-guide and learn even more about how to budget for retirement at home and prepare to age at home in maximum comfort. Want to discover how much equity you could access? Try our easy-to-use reverse mortgage calculator today.
Applications for credit are subject to eligibility and lending criteria. Fees and charges are payable and terms and conditions apply (available on request). Household Capital Pty Limited is a credit representative (512757) of Mortgage Direct Pty Limited ACN 075 721 434. Australian Credit Licence 391876.
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