Aging in Place are three words you will hear more often as we all age in Hawaii. From our parents, to our uncles and aunties to our children, we will all be affected by the fact that we all get older. This article on financing long-term care will be the first in a series of articles about Aging in Place.

I spend a lot of time talking to seniors on a daily basis and as I go around I always ask this question. “How many of you want to go to a care home or nursing facility down the road?” I always get the same answer and that is “no way — I want to live in my home for the rest of my life. I am not going to any care home.” Who wouldn’t want to remain in their own home as this is where you perhaps raised your children, your neighbors know you, and it’s safe and comfortable.

Aging in place is the ability to continue residing in your current housing setting, either at home or in a non-health care environment, and using products and services to allow and/or enhance the ability to stay and age without having to move as circumstances change. For most of us we tend not to think about aging when we are in good health. In fact we in Hawaii probably spend more time planning a vacation to Las Vegas than our long-term care needs.

In Hawaii, the number in our aging population is increasing every year. Currently, there are 172,008 seniors older than the age of 65 according to the University of Hawaii’s Center on the Family’s Data.

This number, as we all know, will increase every year as more of us turn 65. In fact the fastest growing segment is the 85+ age group.

Many seniors are faced with the frustration of a low or fixed income, but a desire to remain in their home. According to the United States Census Bureau, the median household income in 2005 for those aged 65 and older was estimated at $24,509. In Hawaii, 7.4 percent of seniors 65+ live below poverty levels and in the 85+ age group the percentage is at 10.4. Low income levels make it difficult to pay for supportive services and home modifications that could enhance aging in place.

In addition, a recent study by the National Council on Aging shows that many older Americans, including those with serious health problems needing long-term care, want to live at home rather than in a care facility.

Aging in place can be challenging if you do not take the proactive approach. In other words you should start planning your long-term care (LTC) needs today and not wait until you suffer from a fall or chronic illness. According to AARP the chances of you needing some form of long-term care is 51 percent.

First, what options do you have for long-term care and/or how will you pay for this service? In Hawaii, with our mixed and rich cultures, grown children tend to be the first option for care giving. Do they live near you, do they have a family and do you want to put the burden on your children are good questions to ask.

If this is not an option you may want to look at qualifying for Medicaid; however, it is getting harder to qualify. If you have more than $500,000 in equity in your home you do not qualify for Medicaid.

Among changes are the look back period is now five years and your property cannot be held in trust. I would recommend if you are looking at this option to contact Medicaid directly to see if you qualify.

In a recent 2007 survey by MetLife the average cost of a private room in a nursing home is $271 per day or $8,130 per month. If you do not have LTC insurance then you will be paying this with your own funds — what we call private pay. Do you want to deplete your life’s savings and/or be taxed on monies that you have to withdraw out of your portfolio to pay for your care?

Long-term care insurance is another option to consider. Most people think LTC insurance is expensive except when they see data like this most recent survey of nursing home expenditures. LTC insurance may pay for some or all of your long-term care needs while allowing you to stay in your own home.

When is the right time to apply for LTC insurance? I would recommend discussing this with your financial advisor as soon as possible. If you already have health issues this may be a problem; however, I know a senior who had breast cancer and another who had quintuple heart by-pass surgery and were still able to qualify for LTC insurance.

Using the equity that has built up in your home via a home equity loan from your local bank or credit union is an option if you can qualify with your income and credit. Another type of equity loan is a reverse mortgage which is becoming a popular way to deal with the financial challenges of living at home since these homeowners are not required to ever make another mortgage payment.

Reverse mortgages are a special type of equity loan that allows homeowners age 62 and older to convert home equity into cash while they continue to live in the comfort of their own homes while remaining on title or in trust. In a study by the National Council on Aging (www.ncoa.org), if used wisely, these loans can pay for preventive measures and day-to-day support so you can continue to live at home safely and comfortably. They also can strengthen your financial plans by filling in gaps, and can help you manage your cash flow to deal with declining health and ability.

“Aging in Place” is emerging as a huge social issue that we will all face. It is important to remember that every person’s situation is different, so do your own research to find what may be the best option for you and your family. Discuss your long-term care needs with a financial, legal or health-care professional you trust who is experienced in all aspects of aging in place. There are so many challenges for those wanting to live the rest of their lives in their own homes that I will cover more topics in the coming months.

Today’s Kupuna column will be a regular series of articles in Generations Hawaii magazine to provide valuable information and resources for seniors. Percy Ihara is the host of Today’s Kupuna television series which airs every Wednesday night at 7 on Olelo’s channel 52.