‘Granny pods’ become a solution for retirees with limited budgets

Personal Finance

Baldwin’s story could become more common. The American population is aging rapidly, with the number of older Americans expected to double in the next three decades, reaching 88 million people by 2050, according to the National Institutes of Health.

Of that number, a 2016 Genworth study estimated that 70 percent will need some form of long-term care, something Medicare doesn’t cover. It’s why deciding where these older Americans will age is often a difficult family conversation fraught with financial and emotional issues.

“If people can age in place and age at home it’s much healthier, and the family is happier, but it can be very expensive,” said Carolyn McClanahan, a financial planner at Life Planning Partners in Jacksonville, Florida. “Granny pods can cost anywhere from $100,000 to $250,000. So you got to weigh longevity in there with it.”

With the cost of skilled nursing care reaching nearly $93,000 a year, a granny pod may make more financial sense if you expect the person living there to stay for several years.

However, it’s important to also weigh the individual’s cognitive health. Someone with dementia or in need of help with daily tasks is not a good granny pod candidate, McClanahan added.

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