Anna Rappaport is an actuary and nationally recognized expert on retirement security, aging, and workforce issues. She has led and contributed to extensive research on retirement systems and health care, as well as longevity, helping shape policy discussions and practical planning guidance for older adults.
A growing number of Americans reach later life with functional limitations and a need for assistance as solo-agers—older adults aging without a spouse, partner, children, or other close family members who can provide ongoing personal, health, or financial support. Although their needs are no different from those of other older adults, they lack family members to help meet them. The Society of Actuaries Research Institute Solo-Agers Decision Guide offers a multifaceted resource to help solo-agers identify challenges, plan ahead, and make informed decisions. This article provides an overview of the guide, focusing particularly on housing.
Solo-agers face a challenge that can become a trap. This group includes both long-term solo-agers and those who have become solo-agers more recently. Individuals who have managed well on their own for many years may be reluctant to acknowledge declining functioning. As a result, they may conceal the need for assistance, increasing the risk of problems with finances, health care, driving, and other essential activities.
The Guide addresses these risks through sections on preparing for changing housing needs, managing finances in later life, selecting a health care proxy and caregivers, organizing legal documents, planning for physical and cognitive changes, developing a support network, and using technology to support aging. The discussion below focuses on housing, one of the most complex and consequential areas of planning.
Preparing for Changing Housing Needs
Housing preferences often shift over time. During more active years, choices tend to reflect cost, proximity to friends, and preferred climate. Planning for a future with greater limitations requires additional attention to access to support services, community resources, medical providers, transportation, and whether a home can accommodate evolving physical or cognitive needs.
If a solo-ager’s current home works well during active years but will not be suitable once limitations increase, planning for alternative housing sooner rather than later is critical. Waiting until limitations are already present can make both decision-making and the logistics of moving significantly more difficult.
Aging in the Right Place
There are many housing types to consider, and choices may change as needs evolve. In addition to assessing whether a home is appropriate for aging in place, it is important to consider preferences related to privacy, style, size, and location. If a current home and location meet existing needs, or can be adapted to do so, the costs and benefits should be weighed against other available options.
Well before serious limitations arise, several alternatives merit consideration. These include remaining in a current home, moving to a senior community, or relocating to a setting that offers multiple levels of care, such as a continuing care retirement community. Other options include sharing housing with friends or relocating to a lower-cost area.
Financial Considerations
For most people, a home represents their largest asset, and housing costs are among the largest items in the household budget. If sufficient equity exists, selling a current home may make it possible to pay cash for a future housing choice. Even without a mortgage, homeowners face ongoing expenses, including utilities, maintenance, insurance, and property taxes, which can be substantial in some areas. Renters, by contrast, remain exposed to rising housing costs over time.
Several housing cost questions are especially important for solo-agers:
- Should mortgages be paid off?
More people are carrying mortgage debt into retirement than in the past. Because solo-agers are single-earner households, mortgage debt may be more common than in two-earner households. Paying off a mortgage can reduce monthly expenses but also reduces liquidity available for emergencies and other needs.
- Should borrowing against home equity be considered?
For homeowners without a mortgage, or with substantial equity, accessing housing wealth through a home equity line of credit or refinancing may be an option. When mortgage rates are low relative to expected investment returns, this approach may be preferable to liquidating investment assets.
- Should a reverse mortgage be considered?
Reverse mortgages allow homeowners to convert home equity into cash flow, with repayment deferred until the home is sold or no longer occupied. They may be appropriate for individuals who are house-rich but savings-poor, do not plan to move, or expect long longevity. They may also help avoid selling investments during market downturns. Careful research and counseling are essential to understand eligibility, costs, and product features.
- What if there is no home equity or savings?
Solo-agers with limited financial resources will have fewer housing options and may need to rely more heavily on lower-cost housing arrangements or public and community-based supports.
Conclusion
Proactive planning is especially important for solo-agers seeking to maintain independence and quality of life as needs change. Thoughtful consideration of housing options, financial tradeoffs, and available resources before serious limitations arise can reduce risk and preserve choice. The Guide provides a practical framework to support informed decisions and help solo-agers prepare for later life.
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