The Hidden Costs of Aging in Place: What Baby Boomers Need to Know

As featured in Straight Arrow News

The housing market has a baby boomer problem. With 61% of boomers saying they never plan to sell their homes, millions of properties are staying off the market, creating a bottleneck for younger buyers. But as I recently told Straight Arrow News, there’s a critical financial planning aspect that many families aren’t considering.

“Most people prefer to age in place, which is fine if you’re planning for it and you can pay for it,” I explained to the publication. “I’ve had plenty of clients who thought, ‘I can take care of Dad’ at home, and it works until it doesn’t.”

The Real Cost of Staying Put

The desire to age in place is understandable and often the right choice. However, too many families make this decision based on emotion rather than comprehensive financial planning. The math isn’t always as simple as “keeping the house is cheaper.”

Consider these often-overlooked costs:

Home Modifications: Most homes need significant updates for safe aging in place. Bathroom renovations, stair lifts, ramps, and wider doorways can easily cost $15,000-$50,000 or more.

Increased Care Costs: While institutional care is expensive, professional in-home care can be equally costly. Full-time care at home often runs $4,000-$6,000 per month in many markets.

Opportunity Cost: The equity tied up in a large family home could be generating income elsewhere. A $500,000 home represents potential investment income that many retirees desperately need.

Family Financial Strain: Adult children often shoulder unexpected costs when parents age in place, from lost wages due to caregiving responsibilities to emergency home repairs.

The Capital Gains Red Herring

Many families point to capital gains taxes as the reason for not selling, but this often masks deeper issues. Yes, the tax implications are real, but they shouldn’t drive the entire decision. For many families, the tax cost is manageable compared to the long-term financial benefits of right-sizing.

More importantly, capital gains concerns can prevent families from having crucial conversations about care preferences, family dynamics, and realistic long-term costs.

A Better Approach to the Decision

Rather than defaulting to “we’ll figure it out,” families need structured planning that considers:

1. Total Cost Analysis: Calculate the true cost of aging in place versus alternatives over 10-15 years, including home modifications, care costs, and opportunity costs.

2. Care Preferences and Realistic Assessment: Honestly evaluate the level of care that may be needed and whether the home can accommodate it safely.

3. Family Capacity: Assess the real ability and willingness of family members to provide care, including the financial impact on their own retirement security.

4. Flexibility Planning: Build in decision points and triggers for when the plan might need to change.

The Bottom Line

Aging in place can be a wonderful option, but only when it’s properly planned and funded. The families who succeed are those who make the decision based on comprehensive financial analysis rather than hope and emotion.

If you’re part of the 84% of Americans planning to age in place, make sure you’re planning for it financially. The time to have these conversations and run the numbers is now, while there are still options and choices available.

Eric Ludwig, CFP®, is Director of the Center for Retirement Income at The American College of Financial Services and CEO of Stockbridge Private Wealth Management. If you’d like to discuss aging in place planning or retirement income strategies, contact our team for a consultation.

After a tumultuous start to 2025 with April’s tariff shock, the third quarter delivered something few expected: one of the strongest market rallies in recent memory.

The S&P 500 closed Q3 above 6,600 for the first time in history, hitting 6,615 on September 15th. For the quarter, stocks gained over 5%, bringing the year-to-date return to double digits. The Dow Jones breached 46,000, while even small-cap stocks participated in the rally.

The big catalyst? The Federal Reserve finally cut rates in September, lowering the target range by 0.25% to 4.00%-4.25%. After holding rates steady for nine months, the Fed signaled that concerns about the labor market now outweigh inflation worries. With Chair Powell characterizing the move as “risk management” in a softening economy, markets cheered.

Corporate earnings continued to surprise to the upside. An impressive 81% of companies beat earnings estimates in Q2, one of the highest percentages in recent years. The AI boom and strong consumer spending fueled much of this strength, though market leadership finally broadened beyond just tech giants.

On the fixed income side, bonds posted modest gains as rates declined. The Bloomberg Aggregate Bond Index was up slightly as investors positioned for continued Fed easing.

Here’s what caught my attention: a recent Nationwide study I was cited in found that 48% of workers shifted their retirement savings to more conservative investments during this year’s volatility, potentially locking in losses or sacrificing long-term growth for short-term comfort. This behavior gap is exactly what hurts returns over time.

The lesson? Markets reward those who stay disciplined during volatility. From April’s lows to September’s highs, investors who stuck with their plans captured one of the fastest recoveries in market history. Those who panicked missed it.

As we head into Q4, remember: your biggest investment risk isn’t market volatility, it’s how you react to it.

Want to discuss how current markets affect your retirement plan? Schedule a conversation with our team →

Eric Ludwig, Ph.D., CFP®, RICP® is CEO of Stockbridge Private Wealth Management and Director of the Center for Retirement Income at The American College of Financial Services. His research has been featured in Barron’s, Forbes, Wall Street Journal, and he was recently cited in Nationwide’s research on investor behavior.