There’s no place like home—and for many Americans these, that remains true well into their golden years.
While many would prefer aging in their own environment, the challenge is figuring out how they can afford to do so.
Northwestern Mutual’s 2026 Planning & Progress Study found that 73% of Americans would prefer to receive in-home care if a health event warranted it.
And that preference is stronger with older generations: 83% of boomers and 78% of Gen X would choose in-home care, compared with 67% of millennials and 61% of Gen Z.
“The vast majority of Americans hope that they will be able to age gracefully in the home they’ve loved for years. For financial advisors, our significant opportunity is to help people convert that goal into a financial reality through comprehensive planning. For homeowners, it means planning ahead and holistically,” says Laura Swafford, associate private wealth advisor at Sozo Private Wealth, a Northwestern Mutual company in Peachtree Corners, GA.
And therein lies the problem.
Staying put is the new downsizing—and it comes at a cost
For many years, the conventional wisdom was that once you age, it’s time to sell the family home and downsize to fund care or reduce the burden of upkeep.
Downsizing was part of the financial strategy.
Today, however, more folks are choosing to stay put, and not for sentimental reasons.
“High interest rates mean giving up a home with a low fixed mortgage or a fully paid home, both of which could have a negative impact on many people’s finances,” says Douglas Ornstein, director of wealth management at TIAA in Charlotte, NC.
In addition, many desirable housing markets have limited inventory, making the move itself more expensive and complicated than it used to be.
“The emotional case for staying in a familiar community, with established social connections, isn’t sentimentality; it’s a legitimate component of healthy aging that the research on longevity actually supports,” Ornstein explains.
The problem is that staying put removes a financial lever that previous generations relied on without most people realizing it’s gone until they need it.
Why there’s a financial gap
When downsizing was the default, selling the home effectively functioned as a built-in long-term care funding mechanism.
“Someone facing a care need in their late 70s or 80s could sell, right-size, and use the proceeds, often several hundred thousand dollars, to pay for in-home aides, assisted living, or whatever care their situation required,” says Ornstein.
And that money could very well be needed, given that the survey found that more than half (54%) of Americans haven’t planned financially for their own potential long-term care needs, and 60% haven’t planned for the possibility of caring for a loved one.
Now that more people are choosing to age in place, that funding source simply isn’t there when the bill arrives. The home is still an asset on paper, but it’s an illiquid one. Meanwhile, the actual cost of care hasn’t gone away. If anything, it’s compounding. The Northwestern Mutual survey says that it’s on pace to exceed $500,000 per year by the late 2050s.
Therefore, you’re left with a structural mismatch: The asset that used to solve this problem is staying put right alongside the person.
“This gap used to resolve itself. Now it has to be deliberately planned for,” Ornstein adds.
In addition, most properties aren’t designed for seniors to safely age in place, so the expense of home modifications must be accounted for as well.
Even a senior-friendly bathroom remodel, which includes grab bars and a walk-in tub, for example, could cost between $6,700 to $17,700, according to Angi.
To put things into perspective, a married couple bought a plot of land in Portland, OR, in order to build their ideal age-in-place home. It has a primary suite on the main floor, ICF construction for maximum energy efficiency and insulation for warmth, and an elevator shaft to help the couple navigate the other floors. It’s now listed for $1,225,000.
How to age in place when savings fall short
If you’d like to age at home but don’t have sufficient savings that will allow you to, you’re not out of luck. These options are worth exploring, but keep in mind that none of them are a complete substitute for having planned ahead.
Medicare
Medicare won’t usually cover nonmedical long-term care. If you need help with personal care like bathing, dressing, or cooking, for example, you’ll have to find other ways to fund it.
However, if you’re diagnosed with dementia or your doctor prescribes home health services for any other reason, it could pay for some of your care.
“Medicare can reimburse you for about 75 hours of care, if your health condition warrants it,” says Peter Ross, CEO and co-founder of Senior Helpers in Towson, MD.
Medicare may also pay for medical equipment like canes and walkers that could help you get around easier at home, but it won’t cover the cost of home modifications.
Medicaid
If you’re eligible for it based on your income, Medicaid may be a valuable tool. Check Medicaid.gov to find your state’s Medicaid agency and determine whether you meet the requirements.
“In New York specifically, Medicaid programs may cover your home care needs,” explains Yelena Sokolsky, founder and CEO of Galaxy Homecare in New York City.
Note that qualifying for Medicaid doesn’t automatically mean your home is protected after your pass away.
Depending on your state and circumstances, Medicaid may seek repayment for some long-term care costs. This could affect your home and the assets you plan to leave behind to your loved ones.
Long-term care insurance
Long-term care insurance pays for the cost of long-term care needs like nursing home care, assisted living, adult day care, in-home care, home modifications, and care coordination.
The younger you are, the less you’ll pay for your premiums. That’s why most financial professionals recommend you buy it in your 50s or 60s.
Home equity loans and HELOCs
Home equity loans and home equity lines of credit (HELOCs) could come in handy if you have substantial equity in your home. However, before you go this route, understand the interest rates, fees, and other fine print.
This option should only be considered if you’re confident you can repay your loan. Otherwise you could lose your home.
Reverse mortgages
A reverse mortgage is a type of home equity loan that might be an option if you’re 62 or older. If you take one out, you’ll have access to a portion of your home equity and won’t have to make monthly mortgage payments.
You’ll need to pay back the loan when you sell your home, move out, or pass away.
The caveat with this option is that it could be difficult to qualify for, and you may face costs like origination fees and upfront mortgage insurance premiums.
Family assistance
According to the Northwestern Mutual survey, 2 in 3 Gen Zers and millennials believe they will need to provide long-term care for a loved one someday.
“These are often the same adults juggling their own mortgages, childcare costs, and retirement savings. Expecting them to also fund a parent’s care isn’t a backup plan; it’s a second financial challenge stacked on top of the first,” says Ornstein.
While family support could work in some cases, it’s usually not the best choice.
