The Most Popular Housing Choice of American’s Elderly : STAYING PUT

When Hortense Tingstad’s husband died of Alzheimer’s disease in 1982, she thought that most of her life’s major decisions were behind her.

She had accepted the task of caring for a husband who often didn’t recognize her after his condition was diagnosed as the memory-killing illness several years earlier.

But when he finally tried to choke her to death in a fit of dementia, she made the painful decision to move him from their Mid-Wilshire home of 40 years to a hospital, where he could get more professional treatment.

After Edward Tingstad was buried, though, Hortense was faced with yet another difficult decision: Where would she spend the rest of her life?

A convalescent home was out. Even now, at 81, she’s in fine shape. She pondered moving to a resort-type development chock-full of golf courses and the like, but soon rejected that notion because she “didn’t want to hang around with a bunch of old people.”

She still occasionally thinks of moving to a condominium, but doesn’t like the thought of giving up her own yard and some of her privacy. An apartment is definitely out of the question: After being a homeowner for nearly half a century, she’s not about to go back to renting.

“So I’ve just stayed put,” said Tingstad, a chipper, energetic woman who only recently mothballed her racy 1964 Porsche and started driving a sedan.

“I love this old house, and it’s so full of happy memories. I might just stay here until I turn 100.”

Tingstad’s story illustrates some of the many housing choices open to the nation’s 41 million people aged 60 or older, about three-quarters of whom are retired.

Exactly where to live when we get older is a question all of us must face sooner or later. If you have already retired, or expect to leave the work force soon, it’s a decision you need to be thinking about now.

But even if you’re middle-aged, a little planning today could let you live out your retirement years more comfortably than you would if you waited until the last minute.

Even if you don’t want to think about where you’ll live several years from now, you may have to address the elderly housing issue if you have parents who are in their 50s, 60s, 70s or 80s.

In fact, experts say older people should seek the input of their children when they’re making their housing decisions and that the kids should volunteer to become involved.

“Whether you move or stay put, the choice you make will affect the entire family,” said Leah Dobkin, a housing specialist with the American Assn. of Retired Persons in Washington.

“It’s ultimately your decision, but bringing the kids in on the conversation can be a real help.”

Never before have older people had so many housing options. Hundreds of communities for so-called “active adults” have sprung up around the country, with golf courses, pools and classes on everything from sewing to woodworking.

Other new developments cater to older people who want smaller homes, but don’t want all the recreational amenities offered at Sun City-type projects.

“Congregate-care” facilities are geared toward older people who are generally healthy, but want a little help with cooking and housekeeping chores.

And then there are nursing homes and convalescent hospitals, where residents have access to around-the-clock medical supervision.

Even people who decide to stay in their present homes now have a range of choices.

For example, you could bring in a roommate to supplement your income and provide companionship. Or, if you need in-home medical attention, you can hire one of the 8,000 agencies that provide various types of nursing care and therapy.

If you’re one of the 2 million or so Californians who have lots of equity and the home is nearly paid off, you might even consider a “reverse mortgage”--an offbeat type of loan that can provide you with monthly stipends that don’t have to be immediately repaid.

But with all these options come some hard choices.

No matter where you spend the rest of your life, you’ll have to ask yourself some tough financial and lifestyle questions. The answers will help determine not just where you live, but how happy you’ll be with your decision.

“Go slow, and think everything out first,” said Stan Ross, co-managing partner of the real estate consulting and accounting firm of Kenneth Leventhal & Co.

“If you’re deciding where you’re going to live for the rest of your life, you can’t afford to make a mistake.”

Lawyers, accountants, financial and estate planners can provide valuable advice. So can the local chapter of the American Assn. of Retired Persons, which has a plethora of free and low-cost publications about housing alternatives for older people.

Your physical condition will play a key role in your housing decision.

If you’re relatively healthy and mobile, there shouldn’t be any problem with staying in your current home.

Several studies have shown that between 75% and 85% of people over 60 would like to spend the rest of their lives where they are now, so long as they remain healthy and can continue making their housing payments and keeping the place up without much trouble.

In fact, even if you’re a bit frail or are handicapped, you might be able to stay in your longtime home by making some alterations.

“You can install ‘grab bars’ in the bathroom and other parts of the house for more support, or install automatic stair lifts so you don’t have to walk up stairs,” said Jon Pynoos, a professor of gerontology at USC’s Andrus Gerontology Center.

“You can add more lighting so you can see better around the house, or even rearrange your floor plan so you only live on one floor or spend most of your time in one particular portion of the home.”

New products designed to help older people stay in their home with as much comfort as possible are being developed every month.

For example, Canada-based Granberg Superior Systems recently unveiled a “movable” kitchen and bathroom for wheelchair-bound people: Cabinets, sinks and everything else can be automatically lowered or raised with the touch of a button.

If you need nearly constant medical attention or your health is deteriorating, you may want to consider moving to a nursing home or continuing-care facility. About 3 million Americans live in 25,000 of these projects nationwide. They typically offer on-site medical care as well as meals and help with household chores.

There are psychological considerations too.

“If you move away from your neighborhood, you usually leave behind lots of friends and family members,” said Dobkin, the AARP housing specialist. “Or you might not want to move if your house holds fond memories of a late spouse or your kids.

“A lot depends on how motivated you are to create new memories instead of just keeping the old ones. If you’re not ready to meet new people and adjust to a new neighborhood, you’re probably better off staying where you are now.”

If you decide to stay put, you’ll still have plenty of decisions to make.

For example, if you’re widowed or otherwise single, you might consider bringing in a roommate.

“They could pay you rent to supplement your income, or they could do housekeeping or other chores in lieu of rent,” said Janet Witkin of Alternative Living for the Aged, a nonprofit group that runs a roommate-matching service and builds co-op housing for older people.

“Also, a roommate can give you companionship--and you can’t put a price tag on that, especially if you’ve been living alone.”

There are no firm estimates on the number of elderly people who live with a roommate. But Witkin’s group alone has matched up more than 3,100 Angelenos over the past decade.

There are, of course, some drawbacks to sharing your home with someone else. Your privacy will likely be reduced, and there’s a chance that the rent paid by your housemate may make you ineligible to receive other benefits, such as food stamps.

A few cities even have zoning ordinances that put limitations on shared-housing arrangements.

Perhaps more important, you simply might not get along with your roommate--and that can cause serious problems.

“You don’t want to spend the rest of your days arguing with somebody, or go through the trauma of getting rid of a roommate who makes you feel uncomfortable in your own home,” said Jacqueline Leavitt, an associate professor and expert on elderly housing in the UCLA School of Architecture and Urban Planning.

“That’s all the more reason why you should get to know your (potential) roommate before you ask her to move in, and all the more reason why you should have a place in your home when you want to get away from it all. If you don’t have any privacy, you’ll go mad.”

The free roommate-matching programs operated by Alternative Living for the Aged and some other seniors’ groups try to minimize potential problems by linking-up people with the same characteristics.

They ask potential partners a variety of questions--from whether they smoke to how late they stay up--in an attempt to ensure compatibility.

If finances will be tight in your retirement years or you simply want to live better, you can turn some of your built-up equity into cash by refinancing, or by taking out a home-equity loan or conventional second mortgage.

The problem, though, is that you may have trouble paying the money back.

“Remember, your income is probably going to be much lower because you won’t be bringing home a weekly paycheck,” said San Francisco-based financial planner Lawrence A. Krause.

“The last thing you need in your retirement years is to fall behind on your mortgage payments and lose your house through foreclosure.”

Krause discourages many of his older clients from borrowing against their equity. “If they’re strapped for cash, I suggest that they consider selling and moving to a smaller home, or to move to a less-expensive area.”

If you don’t like the thought of moving but want to supplement your retirement income, you can consider taking out a reverse mortgage. About 1,000 of these loans have been made in California and 5,000 have been made nationwide--more than twice the number that had been originated just two years ago.

A reverse mortgage is basically a home loan that works backwards. Instead of getting one lump sum that must be repaid in monthly installments, the loan is advanced in monthly increments.

Depending on which type of reverse mortgage you select, the money won’t have to be paid back until the term of the loan expires or you finally sell the home. If you die, the money is repaid by your estate.

“People take out reverse mortgages for any number of reasons,” said William J. Texido, whose San Francisco-based Providential Home Income Plan is one of California’s biggest reverse-mortgage lenders.

“Some do it to supplement their monthly income and live a little better, and others do it to pay medical bills or meet other expenses.

“And some folks just do it to have fun,” Texido said. “We’ve got one couple that signed up for our program, and they use the money to rent an apartment in Paris for six months out of the year.”

Of course, reverse mortgages aren’t for everyone. Some companies charge high interest rates on the loans or demand to share in a portion of the property’s future appreciation.

People who want to leave as much as they can to their heirs also typically avoid reverse mortgages because they don’t want profits from the eventual sale of the home to be reduced by the loan pay-back.

A cheaper way to tap your equity is to enter a sale/lease-back transaction.

In a typical sale/lease-back, you would sell your home to your grown child or even a private investor and simultaneously sign a lease to stay in your house for as long as you wish.

As in a typical sale, the buyer would make a down payment and get a bank loan to finance the rest of the purchase.

You would get to keep all the sale proceeds and might be eligible for the one-time exclusion that lets you pocket up to $125,000 of your profits tax-free. You would also have the psychological satisfaction of knowing that you can stay in the home for as long as you like.

Your child, meantime, can collect monthly rental payments from you and take tax deductions that all landlords enjoy. And, of course, he’ll also get the home when you move out or die. A sale/lease-back involves some important tax and legal issues, so you’ll want to confer with a knowledgeable attorney and accountant before you enter one.

The National Center for Home Equity Conversion provides a guide to sale/lease-backs and a model agreement you can use to fashion your own contract: It’s available for $35 from the nonprofit group’s headquarters at 110 E. Main Street, Madison, Wis. 53703

Whether you stay put or move on, don’t put yourself under too much pressure.

“Unless you’ve got pressing medical problems or financial troubles, there’s really no reason to rush your decision,” said USC’s Pynoos. “So go slow--remember, there’s always tomorrow.”

Times research librarian Nona Yates contributed to this story.

LEARN MORE ABOUT HOUSING OPTIONS

There are many agencies that can help you sift through your housing options and address other issues concerning retirement. Here are some of the biggest:

American Assn. of Homes for the Aging, 1129 20th St. NW, Suite 400, Washington, D.C. 20036: (202) 296-5960. Offers a variety of publications--some free, some at a cost--to help older people decide which housing alternative is best for them.

American Assn. of Retired Persons, 1909 K Street NW, Washington, D.C. 20049: (202) 728-4355. Offers dozens of free publications. Two of its best are “Your Home, Your Choice: A Workbook for Older People” and “Home-Made Money: A Consumer’s Guide to Home-Equtiy Conversion.”

American Health Care Assn., 1201 L St. NW, Washington, D.C. 20005: (202) 842-4444. Provides a free, comprehensive guidebook on selecting a nursing home and other free pamphlets.

Design for Aging/American Institute of Architects, 1735 New York Ave. NW, Washington, D.C. 20007 (202) 626-7300. Provides information on floor plans and housing design elements for the elderly.

National League for Nursing, 350 Hudson St., New York, N.Y. 10014: (212) 989-9393. This nonprofit agency accredits home health-care organizations and sells a variety of books and pamphlets concerning in-home care.

Each state also has its own agency that addresses a variety of elderly concerns and offers free information. In California, it’s the California Department of Aging, 1600 K St., Sacramento 95814: (916) 322-5290.

MAKING UP YOUR MIND

Keep the following questions in mind as you consider what could force you to give up your present home and what would allow you to stay in it.

Have you carefully reviewed all the options available to you?

Have you learned enough about the available providers in your community?

Have you talked to other older consumers about their experiences?

Have you discussed the options with members of your family?

Are you confident that the provider you have selected offers services that will meet your needs?

Have you determined the prospective costs and benefits of each housing option?

Is there a waiting period for the housing service you want and, if so, when should you put your name on the waiting list?

SOURCE: American Assn. of Retired Persons

WHAT TYPE OF ASSISTANCE WILL YOU NEED? Do you need or anticipate needing assistance with the following? (Choices are NOW, WITHIN 1 YEAR, or WITHIN 3 YEARS.)

1--Preparing meals. 2--Transportation. 3--Light housekeeping. 4--Medical care. 5--Bathing and personal care. 6--Home maintenance. 7--Getting around the house. 8--Overcoming loneliness or isolation. SOURCE: American Assn. of Retired Persons

HOUSING CONSIDERATIONS What is important to you? (Options: Very Important, Moderately Important, Not Very Important 1--Staying in your present home. 2--Living near your friends. 3--Living near your family. 4--Living near your place of worship. 5--Access to public transportation, stores, and community services. 6--Having home maintenance services available. 7--Privacy. 8--Keeping costs to a minimum. 9--Having in-home companionship. 10--Keeping your pets, your own furnishings, and other personal items. 11--Feeling secure in your home and neighborhood. 12--A home-like environment. 13--Having numerous activities available to you. 14--Having a large amount of living space. 15--Knowing that health care services are readily available. SOURCE: American Assn. of Retired Persons

FINANCIAL CONSIDERATIONS

What percent of your income do you currently spend on housing? (A general rule of thumb is that about 30% of one’s gross income can be spent on housing, including utilities.)

Is the amount you presently spend on housing minimal, adequate or comfortable?

What is your anticipated budget for housing over the next 5 years?

Do you expect your income to increase or decrease over the next 5 years?

Would you consider changing your housing over the next 5 years?

Would an arrangement that brought in rental income from an accessory apartment or a house sharer be worth the modification costs?

Would the financial benefits of living with others be worth adapting to a new living arrangement?

Would you be eligible for an arrangement that offers subsidized rents? (Income limitations vary across the country, so check with your local housing authority.)

If you need minimal health care services under a physician’s care, have you considered the cost difference between home health care and moving into a nursing home?

What is the possibility to receiving Medicare, Medicaid or private insurance reimbursement for any of the health care services that you need?

SOURCE: American Assn. of Retired Persons