A lot of elderly people are opting for assisted living these days. It is important to understand the various ways by which they can manage their finances wisely before deciding to move into a senior living community
When you are in the prime years of your life, you would want to be freer and less burdened by household responsibilities. Hence, it makes sense to move to a senior living community, which a lot of people, who are into their 60s and above, are already doing.
Says Anuj Puri, chairman, Anarock Property Consultants: “Due to the rise of nuclear families, increased life expectancy, and people living across geographies, ‘independent seniors’ are becoming a new demography. Such seniors do not settle for traditional old-age homes, as they prefer – and can afford – autonomy and the company of age peers in well-equipped retirement communities. A recurring theme of this pandemic has been seniors living alone, struggling for basics, managing without house help, and anxious about existing and potential medical issues. The need for homes in a setting where these factors are taken care of is now undeniable.”
According to Puri, the average monthly rentals in senior living residences across cities start as low as Rs 30,000 and go up to Rs 1 lakh, depending on the facilities, and the type of occupancy, among others.
India’s life expectancy has consistently increased from the 1920 onwards, but it is still below the global average. India’s life expectancy in 1950 was 35.21 years, and it is 70.19 years in 2022, a growth of 57 per cent, according to UN estimates. It has been on the rise due to increased medical care, better diet, and healthier lives.
The biggest concern for senior citizens here is outliving their savings. Thus it is important, under such circumstances, to plan one’s finances in a way that it takes into account inflation, taxes, and future healthcare expenses.
Here are six financial tips for elderly people moving into senior living communities.
Move On An Experimental Basis: Suresh Sadagopan, founder and principal of Ladder7 Financial Advisories, a financial planning firm says that seniors should move to such homes on an experimental basis.
“There are people who like such places and others who just hate them. Hence, taking a place on rental for, say, six months would be a great idea,” he says.
Get A Fix On The Finances: As people are living longer owing to improved healthcare, they are trying to calculate the costs that they would now need for their sustenance. Thus, it’s important for senior citizens to make proper financial planning before they outlast their savings. Only if a certain senior home is financially viable for them, they should stay there, otherwise, they should plan to move to a less-expensive one.
Take Into Account Inflation Risk: Purchasing power decreases with a rise in inflation. Senior people need to take inflation into account while calculating all their costs. They should also find out by how much the expenses at their senior homes will shoot up in the long run. Also, they need to find out what kind of cost revisions will happen in the future.
What Is Covered And What Is Not: Seniors should assess all the costs included in the senior home package, including long-term care, skilled nurses, and so on. If it is not included, they should plan accordingly.
Have A Corpus For Health Insurance: According to AK Narayan, CEO, AK Narayan Associates, a financial planning firm, as medical costs are on the rise, seniors should ensure they have adequate health insurance.
“Either they should be included by their children in the group insurance policy, or, they should have adequate corpus for a separate health insurance plan for themselves,” says Narayan.
Support System: When elderly people are moving to a senior home community, they should also make sure they have an adequate support system in place, of either friends or relatives who live around. Else, their children must visit them annually at a specific time to take care of all their needs.
The senior living market is being driven by increasing demand for improved healthcare services, expanding geriatric population, a shift in trend from communicable to chronic diseases, rapid technological improvements, rising disposable income, and demand for cost-effective care services. Thus, it is important to do proper research before deciding to move into a community that supports their needs.