So, let us continue to mull over the splendid new device that I put on the pool: On reflection, I realized that because the thing will make it so much easier for me to care for the pool, it will delay the need to hire someone to do the pool maintenance for several years….or to give up living here and move into an old-folkerie. Possibly, if my health holds, for quite a few years: nothing that remains to be done is very strenuous. I would have to be seriously incapacitated to find myself unable to do the minor jobs that remain.
In other words… The $1250 I put into upgrading the pool equipment will put off the dread day that I have to move into a life-care community — possibly by a factor of years.
And every year that I do not move into one of those places saves me, in today’s dollars, the net on the sale of my house (about $300,000, the cost of buying into a life-care community) and living costs of something between $333 to $2,400 a month. In other words, every year I do not move into a warehouse for old folks, I keep the value of the house in my estate, hopefully to be passed along to my son, and I save a big chunk of dough every month.
How do I figure?
Welp, it goes like this:
Life-care communities — where you move in while you’re still ambulatory, live “independently” in a private apartment, and get a couple of meals a day plus, if desired, a limited amount of driving to doctors and shopping — are spectacularly expensive, and those expenses are spectacularly difficult to calculate. This is because there are several schemes for buying in. On the low end, you can effectively rent the place without a large buy-in. On the high end, you pay a six-figure buy-in fee plus a hefty monthly bill: basically you sell your house and give the outfit the proceeds of the sale.
Assuming your house is paid for, that is.
It’s also very difficult to get a handle on exactly what those costs are likely to be. Many of the figures posted online are several years out of date — they increase with inflation at about 4% a year, but you have no way of knowing exactly what a 2009 average figure would be in 2018.
In 2013, Marketwatch reported that the average buy-in fee for a life-care community was $280,618. That would be about what I would net if I sold my house today — maybe a little bit less. Now add 4% a year over the past five years, and you’re up around $341,400 — i.e., more than I could get for my house, after realtor’s fees.
A 2008-09 study by Metlife found monthly costs for these places ranged from $2470 to $3469. Again, if these figures have increased by 4% a year, today that could be as much as $3750 to $4748 per month!
These figures represent nationwide averages. Locally, in Scottsdale one of the few places — possibly the only place — that posts its prices online wants $243,200 to 283,200 to buy in to a one-bedroom apartment (remember: this is the equivalent of the net proceeds on the sale of a 4-bedroom home on a quarter-acre of xeriscaped land with a swimming pool, in a half-way decent centrally located neighborhood within walking distance of the lightrail) PLUS a monthly fee of $3260-$3600. That’s only for food, lodging, and minimal transportation. For one person. One. Not two. If one bedroom is too cramped for you, then you might consider one bedroom plus a den: entry fee, $297,400 to $411,000; monthly fee: $3700 to $3900.
Well. To live in my house, which is paid off and which has one hell of a lot more liebensraum than one measly bedroom in a people warren, costs me about $1,545 a month. Toss in groceries, a few unplanned expenses, and the cost of running the paid-off car, and you come up with something between $1,600 and $1,767 a month.
That not only gives me all the very high-quality food I choose to eat, it also gives me a car that takes me any place I choose to go at any time of day I choose to travel. It covers the cost of yard and regular house maintenance, plus utilities, taxes, and insurance. In other words: it covers more than the palace in Scottsdale costs. By how much?
Subtract the monthly costs of running my house and my car plus my average grocery and utility bills from the monthly amount it will cost me to live in one of those places (assuming I’m unfortunate enough to live long enough to have to move into one of them), you get a difference — in my favor — that ranges from as little as $333 a month (for a low-end retirement home, where you really, really do NOT want to live) to as much as $2,400 a month (very nice, no doubt: but still…an institution).
What that boils down to:
Every month that I live in my house, I save approximately $1600 to $1767 a month over what it would cost to live in that Scottsdsale old-folkerie. In other words, every single month that $1250 filter stands out there in the backyard helps to make it possible for me to stay in this house is a savings of more than the filter cost.
And that doesn’t count the cash value of the house, which I would very much prefer to leave to my son.
Banner image: The Village at St. Barnabas. By Generic1139 – Own work, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=41879989