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An alternative to a reverse mortgage for a senior who does not want to move could be to sell a home and then sign a long-term lease agreement for that home. Listing a home for sale with a condition that the seller wants to lease the home from the purchaser may limit the potential buyers. But it could also match up a senior who does not want to move, and needs money, with a potential rental property investor, assuming the proper realtor and legal advice.
Families of aging seniors can try to talk to them about the lifestyle and financial implications of a downsize, but ultimately, the decision is theirs as long as they can make their own decisions — as it should be, of course.
The cost of long-term care in a private residence is significantly more than in a retirement or nursing home. Private caregivers may care for a single person as opposed to many people or need to travel between multiple homes over the course of the day. This is something to consider for retirement planners, policy makers, families, and seniors.
Many homeowners will move in retirement, and given the size of the aging boomer population, this will amount to millions of seniors in the coming years. However, many millions more will not downsize, and that has financial and practical implications for them and everyone else.
Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.