Home is where the heart is…and often where it wants to stay. Three-quarters of older American adults hope to remain in their homes for as long as possible as they age, according to a recent survey by AARP. Living at home seems like an achievable goal—but it can become expensive when combined with aging-related challenges.
Bottom Line Personal asked Samara Scheckler, PhD, of Harvard’s Joint Center for Housing Studies what people who hope to age in place need to know about the financial side of this goal. Are costs for things like in-home aging care and aging-in-place remodeling prohibitive compared with the costs of other retirement-living options? What other expenses should be evaluated? Nine key things to consider…
Aging in place tends to be less expensive than assisted living even when in-home care is needed
In most parts of the US, the total cost of housing and living plus four hours per day of in-home care is less expensive than the cost of being in an assisted-living facility. Residents who need one daily care visit can save more than $10,000 by receiving that care at home rather than moving to an assisted-living facility, according to a 2024 study Harvard’s Joint Center for Housing Studies, though this varies dramatically from region to region depending on local home-care and assisted-living rates. Note: This equation differs for people who need more than four hours per day of professional in-home care or who need help throughout the day.
Aging at home is more affordable in many cities including Washington, DC…Portland, Maine…Richmond…Harrisburg…Boston…Jacksonville…and Charleston. Assisted living tends to be less expensive than aging in place—though only marginally so—in some cities where in-home care is particularly pricey and/or assisted living is relatively affordable, including Ogden, Utah…Portland, Oregon…Stockton, California…Lakeland, Florida…Salt Lake City…and Tampa.
Helpful: The Genworth Cost of Care Survey is a good way to investigate the median cost of in-home care and assisted-living communities in your area and compare those figures to national averages.
The age of your home matters…as well as your age
Many older homeowners have older homes…and older homes tend to have above-average repair-and-maintenance bills. Examples: Homes built before 1960 have average annual maintenance costs equal to around 0.8% of those homes’ value, according to a 2021 study by the National Association of Home Builders (NAHB). Homes built in the 1960s and 1970s are nearly as costly to maintain. That’s much more than the 0.2%-of-home-value-per-year figure that applies to homes built within the past decade.
Heating and air-conditioning systems, roofs, windows and other components all eventually need to be replaced in older homes, creating big bills for homeowners. Price tags of smaller home-maintenance projects add up as well, and aging homeowners tend to find such projects increasingly difficult to tackle on their own. Older homes also tend to have significantly higher fuel costs than newer ones, according to that NAHB study, likely because few of them meet modern energy-efficiency standards. Many older homes aren’t built to current building codes, either, which could make them more susceptible to damage from extreme weather events.
Your home might require costly aging-in-place modifications
Less than 4% of US homes feature a no-step entry…a single-floor-living layout…and halls and doors sufficiently wide to accommodate a wheelchair, according to a 2022 Harvard study. These things might not be an issue early in retirement, but as the years pass and a retiree’s mobility decreases, remaining in the home might require spending tens of thousands of dollars on these and other home modifications. Failing to make such modifications can increase the retiree’s risk for dangerous falls and/or decrease his/her ability to live independently—and that can lead to higher in-home care needs, straining the budget.
Helpful: The University of Southern California’s HomeMods.org website offers useful information about home modifications for people who are aging in place.
Aging-in-place housing costs aren’t fixed even if you have a fixed-rate mortgage or have paid off your mortgage
The home-maintenance and modification bills described above aren’t the only housing costs likely to rise during retirement—homeowners insurance and property taxes have become budget busters as well. As of 2024, the average annual homeowners insurance premium climbed to $1,984, a 74% increase from the inflation-adjusted average premium of $1,141 in 2008. That dramatic price hike actually undersells the insurance cost burden faced by homeowners in parts of the country where insurance rates have shot up especially fast, such as Florida, California, Louisiana and parts of the Midwest. Example: The average annual premium for a $300,000 dwelling in Nebraska and Louisiana now tops $6,000. It can be hard for anyone to fit steep insurance premiums into a budget, but it’s especially challenging for older homeowners on fixed incomes.
Meanwhile, the rapid increase in home values during the past decade-plus has pulled up property tax bills, which are calculated based on a percentage of a property’s assessed value. Together these rising costs mean that many older homeowners face thousands of dollars more in annual housing costs than they anticipated even if the home’s mortgage is paid off.
More older homeowners still have mortgage debt
As of 2022, 41% of homeowners aged 65 to 79 had a mortgage on their primary home—these homeowners’ median mortgage debt was $110,000, according to a study by Harvard researchers. Many aging-in-place homeowners haven’t paid off their mortgages by the time they reach their 80s—31% of homeowners 80 and up still had mortgages as of 2022, with a median debt of $79,000. Mortgage bills are a major expense that aging-in-place retirees of the past rarely faced—in 1989, just 24% of 65-to-79-year-old homeowners still had mortgages, with an inflation-adjusted median mortgage debt of a manageable $21,000. Just 3% of 80-plus homeowners had mortgages in 1989, and those who did had a median remaining inflation-adjusted balance of only $9,000. Having a mortgage can dramatically increase the housing costs associated with aging in place, increasing this from $520 all the way up to $1,470 on average, according to the 2021 American Community Survey.
One effective solution to the high-price of in-home care—get some of your in-home care for free
Approximately 80% of in-home care is unpaid and provided by loved ones, community members and/or local non-profit organizations. Access to free care often makes aging in place far more feasible financially, but it can place a heavy burden on family and friends who sacrifice economic opportunities and risk the physical and mental impacts of caregiver stress to meet this need.
Having a flexible definition of “aging in place” can improve aging-in-place affordability
If your definition of aging in place requires remaining in your current home, that might mean making expensive home modifications and/or paying hefty utility and maintenance bills for a home that’s larger than you need. But if your definition simply means remaining in your neighborhood, that opens the door to moving to a place that is cost-effective and a better fit for you. While a move could reduce housing costs, moving closer to family or into an in-law apartment in a loved one’s home also can also increase options for care as well as reduce the health risks associated with social isolation. Similar: Relocating within a community to a home that’s close to public transportation can improve independence and reduce automotive expenses as a retiree’s driving skills diminish.
Aging in place in a rental brings additional financial uncertainty
Renting a home or apartment can seem like a smart option for retirement-age people who don’t want to move into assisted living or a nursing home…and who also don’t want to deal with the maintenance chores associated with home ownership. Unfortunately, renters are subject to rent hikes, creating even more financial uncertainty than homeowners face. Example: Rents rose 27% from 2020 through 2025, on average, according to the US Bureau of Labor Statistics.
The decision to age in place should be reevaluated periodically
Remaining in the home might be a reasonable choice early in retirement but increasingly impractical as the years go by and abilities and preferences change. Objective, ongoing reassessment of this housing decision is far wiser than sticking with a choice made years earlier under different life circumstances.
