How Much Equity Does a Senior Need?
There is no set amount of equity that is required to move to senior housing. A seniors’ ability to pay depends somewhat on the amount of their income and any other investments or available assets that may add to that income to afford the costs of senior housing.
In order to afford most adult rentals (55+) with no services, but activities and possibly transportation, a senior household is likely to require an annual income of about $30,000 and an allocation of 40% of that income toward housing.
Housing with services requires a higher allocation of income toward housing, potentially 50% for housing with meals and some minimal services; 80% or more for housing with intensive services.
Some seniors requiring a high level of services and desiring to remain in a residential setting are likely to spend nearly 100% of their income on housing. Some will spend-down assets to avoid being placed in a nursing home.
Selling a home that is paid for can add to a senior household’s income to assist in paying the monthly fees for senior housing or in purchasing a share in a cooperative or in purchasing entry to a Continuing Care Retirement Community (CCRC). The equity derived can be invested and the interest proceeds used to defray the monthly cost of housing with services.
0 Comments
Name and email are required. We promise not to share your email address with anyone.