More and more Australian seniors are choosing to stay in their own homes instead of moving to aged care facilities.
Recent statistics reveal a compelling narrative: approximately 800,000 Australians aged 65 and over opted for home support services in 2021-22, with another 213,000 utilising home care. These figures underscore a significant move away from traditional aged care settings. But what’s driving this preference for ageing at home?
Top Reasons Why Australian Seniors Prefer to Age in Place
Many Australian seniors are choosing to stay in their own homes during their retirement years. Here’s why:
- Familiar Surroundings: Home is where the heart is. It’s filled with personal memories and comforts that can’t be found anywhere else.
- Community Ties: Staying at home keeps seniors connected to their local community, friends, and familiar faces, maintaining a sense of belonging.
- Independence: Living in their own home allows seniors to make their own choices and maintain control over their daily lives, boosting their sense of autonomy.
- Sense of Dignity: Ageing in place allows seniors to uphold their dignity, living life on their terms in the environment they love and cherish.
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The Financial Dilemma: Aged Care Costs
While many Australian seniors have a strong preference to age in place for the reasons listed above, there’s a significant hurdle that often stands in their way.
Despite the desire to stay in their familiar and cherished homes, financial realities, particularly the need to pay for the Refundable Accommodation Deposit (RAD) when moving into aged care, can force seniors to sell their property.
Then there’s the Daily Accommodation Payment (DAP), which is another way to cover the same cost but on a day-to-day basis, kind of like paying rent. This option can add up over time and impact your budget significantly.
On top of these, there’s a Means-Tested Daily Fee, which varies based on your income and assets. If you decide to sell your home to pay for aged care, this fee could increase, which is a crucial factor to consider when making your decision.
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Reverse Mortgage: An Alternative Approach to Aged Care Financing
A Reverse Mortgage allows you to access the equity in your home – that’s the value of your home minus any amount you still owe on it. The beauty of it? You don’t have to make regular repayments. Instead, the loan amount, along with interest and fees, are repaid when your home is eventually sold, usually when you decide to move out or after your passing.
Here’s how it works: You borrow a portion of your home’s value, and as time goes on, interest accumulates on the loan. But don’t worry – you won’t owe more than the value of your home due to a ‘no negative equity’ guarantee that’s standard with these loans in Australia.
With a Reverse Mortgage, you get to tap into your home’s value to cover your needs without having to sell up or move out. It’s a way to keep your independence and stay in the home you love while managing the financial aspects of aged care.
Click here to learn more about Aged Care Financing using a Reverse Mortgage Loan
