In retirement, we ‘underestimate the financial opportunity cost of owning a home’ and how much it can influence health and wealth, says the expert in housing and longevity.
Our guest on the podcast today is Ryan Frederick, an author, speaker, and entrepreneur focused on the intersection of place and healthy longevity. As founder and CEO of HERE, he provides content courses and coaching in place planning, a holistic, research-based approach to help people find the right place for every stage of life. He’s also the author of Right Place, Right Time, a book that helps individuals think through housing decisions for the second half of life. In addition, Ryan provides strategy consulting to organizations looking to create better places, including Fortune 500 companies, institutional investors, health systems, and housing developers and operators. He’s also a member of the Advisory Council for the Stanford Center on Longevity. He previously served on the National Advisory Board of Johns Hopkins University School of Nursing and was a member of the Bipartisan Policy Center Task Force on Health and Housing. He’s a graduate of Princeton University and Stanford Business School.
00:00:00 Senior Living, Longevity, and 100-Year Life Planning
00:08:39 How Place Influences Health as You Age
00:10:37 The Four Pillars of Place Planning
00:16:19 Income’s Impact on Housing, Home Equity, and Limitations of Aging in Place
00:30:01 Place Planning Tools and Building Community
00:41:43 New Housing Models, Cohousing, and Age Diversity
00:49:13 Continuing Care Retirement Communities and Healthy Aging Dashboards
Your Retirement Countdown, With Christine Benz
Harry Margolis: How to Confront Aging Challenges Head-On
Joy Loverde: Planning Ahead for Care Needs as You Get Older
If you have a comment or a guest idea, please email us at TheLongView@Morningstar.com.
Follow Christine Benz (@christine_benz) and Ben Johnson (@MstarBenJohnson) on X, and Christine Benz, Amy Arnott, and Ben Johnson on LinkedIn. Visit Morningstar.com for new research and insights from Christine, Ben, and Amy. Subscribe to Christine’s weekly newsletter, Improving Your Finances.
If you want more Morningstar podcasts, check out The Morning Filter and Investing Insights.
(Please stay tuned for important disclosure information at the conclusion of this episode.)
Amy Arnott: Hi, and welcome to The Long View. I’m Amy Arnott, portfolio strategist with Morningstar.
Christine Benz: And I’m Christine Benz, director of personal finance and retirement planning for Morningstar.
Arnott: Our guest on the podcast today is Ryan Frederick, an author, speaker, and entrepreneur focused on the intersection of place and healthy longevity. As founder and CEO of HERE, he provides content courses and coaching in place planning, a holistic, research-based approach to help people find the right place for every stage of life. He’s also the author of Right Place, Right Time, a book that helps individuals think through housing decisions for the second half of life. In addition, Ryan provides strategy consulting to organizations looking to create better places, including Fortune 500 companies, institutional investors, health systems, and housing developers and operators. He’s also a member of the Advisory Council for the Stanford Center on Longevity. He previously served on the National Advisory Board of Johns Hopkins University School of Nursing and was a member of the Bipartisan Policy Center Task Force on Health and Housing. He’s a graduate of Princeton University and Stanford Business School.
Ryan, welcome to The Long View.
Ryan Frederick: Thank you for having me.
Arnott: We’re happy to have you here. So we wanted to start out by talking a bit about your background. And you actually lived in a senior living community in a suburb of Atlanta when you were in your late 20s. And I’m wondering if you can talk a little bit about how that came about and how that sort of sparked your interest in housing solutions for the second half of life.
Frederick: Well, for any guys out there in your late 20s and you’re looking for an ego boost, move into a senior living community, and you’ll get more attention than you may be looking for. Actually, it’s a really funny story, but the reason why I did it, the narrative in this, is I was really, at the time, I actually didn’t care much about place, ironically. It’s about 20 years ago now, the summer in between years at business school at Stanford. And I was really curious about longevity and people living longer and how do we not just live longer but live better? And I wanted to see what it was like to be in your 70s, 80s. And I was close to my grandparents growing up. Actually, one winter break, I’d stayed with them in Florida for a couple weeks, and that’s a whole ‘nother story. But I was really curious.
And so that summer I worked for a senior living company, and part of the condition was I wanted to live in a community for a month. And they’re like, “We’ve never heard that request before.” But they’re like, “Well, actually that’s interesting because it will give you a perspective of how things really operate and develop a human-centered perspective on this.” My wife and I had now been married for a couple years. She was not willing to go with me to the retirement community. So I was left unsupervised, only male, only person under 75 in my particular wing. And when I think word got out that they were going to have a new temporary resident, word traveled pretty fast. So I had a lot of unsolicited brunch requests. Cookies. It was hilarious. It was great. In fact, the whole reason I did it, turned out, was true to form.
I had just many conversations with people in their life journey, some couples, some solo agers. And I got a perspective of that life stage, and I also got a perspective of the role of place and how it has shaped their life in that moment but also prior. I’ve never perhaps had more attention given to me than that particular month stretch in Atlanta.
Benz: Is that experience what made you want to focus on aging and place planning for your career?
Frederick: I would say that I’m a strategy guy. I plan a bit, but my curiosity can get the better of me. And there was no master plan that had led to that summer necessarily. And then writing a book and doing the work that I do today around place, I mean, I was an electrical engineer undergrad. So the idea of even writing a book was not … I mean, I did engineering to avoid reading and writing. I think what’s happened is I’ve been able to just kind of follow my curiosity and have stumbled into what I believe is a very significant lever in people’s lives across a number of different dimensions, and that is place. It’s kind of hidden in plain sight. So I would say it was certainly instrumental in stoking some of that curiosity, and then gave me, I think, a unique perspective that I’ve built upon in this journey.
Arnott: You’ve also written about the idea of a 100-year life. And I’m wondering how should that change how people think about where they live?
Frederick: What was funny, again, between years at Stanford, I wrote these letters to people in senior housing and then had that job, and people are like, “You’re doing what? Senior living? They don’t recruit here. What is this?” So, 20 years ago, this idea of thinking about the implications of longevity was not nearly as, I would say, socially acceptable as it is today. And I think what’s happened is when you do this anchor of “100-year life,” in fact, I’m on the advisory council of Stanford Center on Longevity, and Laura Carstensen, the founding director there, she’s talked a lot about this 100-year life. In fact, a lot of Stanford’s, that Center of Longevity is framed around, What are the implications of a 100-year life? And she teaches a class for undergrads and MBAs around that.
And so to answer your question, I think it’s not a subtle change. I think it’s a pretty dramatic reframing of how should we personally structure our lives, perhaps most importantly, but also how does our society and institutions, how do they need to shift in this? And as I’ve thought about this issue far more than it’s probably healthy, I think one of the implications is that you just have more chapters in life. And with each chapter in life, it raises this question, like, am I in the right place or best place to have the vision of what I want that chapter to be actually manifest itself? And so I think that it’s always a relevant question. It’s been a relevant question since the beginning of humankind. It’s just a question now that I think is raised more often with people living longer. And I think as our society becomes more aware of not just lifespan, but health span—how many years are we in high-quality health?
And then not least of which is a wealth span. How many years are we in good financial shape? I think place has a meaningful dimension in that conversation. And what used to be perhaps just the normal course—why even think about this? I suspect more and more people are going to be asking questions. Actually, is this really the right place for me to thrive and also be financially well for what may be a life that’s longer than a 100 years? And for planning purposes, we’re not just focusing on, or a good planner shouldn’t just focus on, what the average is for a population. It’s like, what are your conditions? And then what is the probabilistic range of outcomes? And so when you start to do that, you may be planning for scenarios that are beyond a 100 years.
Benz: You argue that home is where the health is. What do most people get wrong when they think about the role of place in their well-being as they age?
Frederick: I think, for the most part, I don’t think it’s something people think about. You look at the research around longevity, one of the things that has been cited a number of times is the fact that your genetics—it’s not they don’t matter, but the studies have shown that your lifestyle and environment are far more important. Genetics may only account for about 20% of your longevity. And there are some outlying situations where people have conditions that are passed on that are unusual in some respects. But for the most part, we have a lot of agency in this. But at the same time, so therefore place is part of that 80%, but also place influences lifestyle. It’s easier in a certain place to go walk every day. I live in Austin, Texas, not walking in the middle of the day right now in the summer, but certain places you may be more active right now or certain places they trend to greater social connection.
There’s more places, third places, cafes, park spaces, etc. So I think what’s happening in this is that I don’t think people are giving it the thought that it deserves. This actually shapes me. In fact, you don’t shape place. Place shapes you. And I think that’s the first piece is acknowledgment of the power of place. And then back to what I said earlier, I think as more people become increasingly health-conscious. I think they’ll recognize—some of it’s obvious, like quality of air, even noise pollution, certain lifestyle habits that can happen in one place versus another. Some of that’s obvious, but I suspect that, over time, more people are going to see this as pretty foundational for planning, again, for each stage of life.
Arnott: I’m wondering if you could maybe give us an example or two of how place might actually improve your health or detract from it. You mentioned things like air quality and noise pollution, but are there other factors people might want to take into account?
Frederick: Yeah, absolutely. In my book and what’s subsequently changed since then, I’ve given this a name. I’ve branded, I’ll call it, the discipline, as “place planning.” And the way I see it is there’s four quadrants of place planning. There’s environment. Your four walls, your neighborhoods, physical attributes, how many square footage your house might have or home may have. You have health, meaning how active, quality of food, sleep, air quality, etc., access to healthcare, high-quality healthcare is in that quadrant. The third quadrant is community. Social connections, close friends, secondary friends, etc., just that ethos. And the fourth one. The fourth one’s financial. Finances. So to what extent does your place enhance your financial well-being or detract from it? Part of the exercise in all this is, if you are off on—and, I think, traditionally we tend to think of, the most experience when I’ve been working with people, they tend to focus on the environmental piece, you go to Zillow, “Wow, look at that stainless steel kitchen” or “the man cave—doesn’t that look amazing?” And then also the finances. “Well, how expensive is this?” And property taxes, etc.
I think there tends to be a lot of focus on those two quadrants. But when we think about our broader health and then community … There was a study done at Harvard over 80 years, this longevity study, and they found that—it was actually JFK’s class. They had his class at Harvard and then as well as indexed it with some other males in the larger Boston area. Net-net, they found that the strongest correlation to being high-quality health in your 80s was not your education, your income, your vocation. It was the quality of your relationships in your 50s and 60s. So that’s to say that, again, going back to those four quadrants, if you’re off on any one of those, that can be enough to suggest, are you in the right place? Is there a better place?
So, I’ll give you a couple examples. So having done place-planning work with dozens of people, there’s some real anecdotes. So one example, a common one, actually, you might have someone, say, in their 70s, who has been living in their home for a long time, and there’s an emotional attachment, understandably, to their house that they’ve been living in decades. It may be more home than they need at that point. This is pretty common right now for various reasons. You have more square footage, maybe there’s multiple floors, etc. And so you may be a spot where actually the physical environmental attributes of your house is not a good fit for you. It’s taking time away from things you’d rather do. Maybe it’s also more expensive in some ways, but then maybe the biggest piece is it may be that your community has changed. You don’t know your neighbors the way you once did. Those social connections aren’t as strong.
So, in that example, we’re seeing a spot where, and having gone through this with some people who fit that profile, situations where every day you’ve got headwinds. It’s harder to be the person you may want to be based on the way that home is. So you may love your home, but your home may not love you back. It’s one example.
Another example in a way that may work better for someone is you can be in a spot where, and again, this is such an individual, highly personalized choice, but you might find a different situation where perhaps someone’s living in an environment where a healthy lifestyle is just part of the ethos. I’ll pick on Boulder, Colorado, for example, which by the way, I have not spent much time in. Boulder, specifically, but say Boulder. And you’re in a spot where there’s a lot of hiking trails, it’s walkable in certain areas. It’s an expensive area. So maybe you have a smaller, maybe you’re living in a condo as opposed to a single-family home. And I know it’s a pretty social area as well. So in an environment like that, you might be in a spot where, again, thinking about those four quadrants, your spot maybe fits your physical or environmental needs. It’s nudging you to a healthier lifestyle, you’re making friends, and it fits within your financial parameters. So there’s a lot of variables at work.
One thing I’d also say is that I think it’s increasingly a complex thing when we think about the second half of life. There’s just more considerations to think about. There’s also, in some cases, more degrees of freedom than there might’ve been when you have younger kids and you’re thinking about school districts, etc.
But the idea of place and how it shapes you, this concept of place planning, it’s true across the full adult age spectrum. In fact, our youngest, we have three kids, our youngest going to college next month. And he’s like, “Dad, stop talking about place planning. I get it. I get it. It’s a big decision. It’s going to shape my friendships, my view, etc., but I’ve heard you enough.” So just to emphasize the point, it’s like this variable; it’s not like, “Oh, I turned 70. Now I need to think about place.” No. It’s true your entire adult spectrum. And I think when we look back, if we’re honest with ourselves, where we’ve chosen to be has shaped who we become.
Benz: I wanted to talk about housing flexibility and the relationship between income and wealth. Moving carries costs. So can you talk about whether people of the lower income and wealth levels really do have that flexibility to make significant changes in where they live as they age? It seems like it would be much harder.
Frederick: It’s not. It’s not. But it’s been interesting having written the book and then working with people like real life examples. I would say there’s a piece of this that is really around mindset. And so the name of my company is called Here, H-E-R-E, and it has a dual meaning. It says here, oh, look at the map. This is the spot: here. But it also is a shoutout to this idea of being present where you are. Are you here? You with me? And what I’ve found is that mindset is so significant because people, invariably, especially in the second half of life, for various reasons, there’s a tendency to not see the full breadth of possibility. In some cases, we can become ageist to ourselves. “Oh my gosh, I’m turning 75” in my mind. I might think 75 of a certain image that may not be me or my peer group, but it says, in a way, you can stop dreaming.
And this is kind of a broader psychological conversation. But the point being that what’s so important in this is to highlight for people that we have agency in pretty much every scenario in every stage of our lives. There are some outliers, but for the most part, we have more agency to shape the life that we’re looking to have than fate alone would suggest. And so what do you mean by that is that, yeah, there are people that have unlimited means, very few constraints. As they solve for place, that’s like a different problem. Where do they begin? Where do you stop?
For people that have constraints, in this case, financially, going back to your question, it’s real. And it’s real, especially in this context that we talked about earlier of 100 years. It’s one thing if you’re planning for like 65 in a day, how do you manage that, versus what might a 100 years look like? Yeah, the financial lens is going to be important. But that doesn’t mean, I’ve seen this in many occasions, that there’s situations where people can say, “Well, wait a second. Where I am, what can I do to enhance my place?” It could be that just a reorientation to your place can help your life. For example, some modest redecoration or being more proactive to reach out to friends or finding ways for greater purpose through volunteering. Just some examples.
In fact, I’ll give you one specific one. There’s a woman in her early 50s, a recent widow, who went through place planning and worked with her, and she was convinced she was going to go move. House was too big, thought it was too expensive in some ways. And then she realized, actually thinking more about it in a more rigorous, processed way, that the best place for her actually was to stay where she was but reorient how she thought about it. So she did exactly like I’m describing. With her memories of her late husband, she’s like, “Well, what if I could do some redecorations?” She started hosting a Sunday brunch every Sunday, broadened her social network, got involved in a not-for-profit in that area around trail maintenance. A few months later, she started dating someone. I think the trap we can fall into is like, “Oh my gosh, I can’t really afford to do anything, so I’m not going to try.” And that’s a formula for a suboptimal place outcome. Doesn’t mean that you shouldn’t be realistic around what your parameters are.
But last thing I’ll say on this is I think people do tend to underestimate—this is actually a pretty important point—they tend to underestimate the financial opportunity cost of owning a home. I’ve seen this a few times now where people own a home, say it’s an older suburban home, they aren’t really grasping the fully loaded cost of what their home is. True maintenance and various costs, separate than property tax, etc. And the big variable that people can miss is the opportunity cost of the equity in your home. And in that scenario, what ends up happening is, if you’re really trying to optimize for financial outcome and then think about range of possibilities, if you take the equity in your house, if you were to sell it, put that in the broader market, and then start to think differently, maybe you rent a different sort of home for various reasons. And so if you go down a certain path where, “Oh, I don’t have any options,” you’re then not even being creative about what life could look like and maybe even some financial resources you can tap into that you’re not aware of. Because over time, the equity return on an unleveraged home tends to be a lot less than the market at large. And you’re also consolidated in just one, it’s highly risky because it’s in one particular place, whereas diversified. So anyway, long answer to your question, but I think for the most part, people—their mindset can hold them back.
Arnott: I wanted to follow up on that idea of the value of home equity and limitations of aging in place. A lot of people have a really strong emotional attachment to their home and a strong interest in staying in the same house as they get older. Is there a way that advisors or family members can kind of not persuade, but maybe help an elder family member see other possibilities if they are kind of fixated on wanting to stay where they are?
Frederick: Yeah, it’s been fascinating because a lot of this work and place planning is outlined in my book as well. There’s some just, I’ll call it, rigorous analysis that can be done in certain scenarios. But a lot of this is psychological per some of my comments earlier. And so I think that, when people say they want to age in place, I often see that as “I don’t necessarily want to think through all my options.” But there’s some interesting research out of the University of Michigan. About 85% or so in their research suggests that people, I forget the exact age bracket, but I think it was 65 and older, plan to age in place. But only like 14% of people have done anything about it. So if you’re going to age in place, if that’s your strategy, well, your strategy needs a plan behind it.
So what does that mean for all the reasons I talked about earlier? What does it mean for your physical dwelling? What does it mean for your health and healthcare? What does it mean for your relationships? What does it mean for your finances? So one of the, I think, opportunities for advisors, as well as for family members, and this is, again, psychologically can be complicated, but it’s helping to probe with that loved one or client, well, what kind of life are you looking for? And how important is it for you to have downside protection if the life that you want to have is actually not how it necessarily unfolds? Or going back to our point earlier, if you’re in a spot where you may have that emotional connection to your house, in this case, but what if you’re not seeing anyone on a regular basis? What if you’re not eating as well as you should or being active? A number of things kind of added together, it doesn’t necessarily make for the most fulfilling life day-to-day, a lot of research on loneliness is tied to this, but also it has some role in your quality of life five to 10 years down the road.
So if you’re concerned about not spending time in an institution as you age, in some regards, I’ve seen some situations where aging in place is only improving the odds of that happening because you’re socially isolated, you’re not eating well, you’re not active. And then some event happens that then forces you away from your home in a way really not of your choosing. So part of it is having conversations with, again, this point around what do you want your life to look like? If you look at the next five years, a key principle behind place planning and the work that we’ve done is helping prompt people: How might you or your place change in the next five years?
And then also helping people think through: How could you improve your current place? In this case, your home like we’re describing, but what are some other scenarios that you can think about? And then how do you compare and contrast these? Like I mentioned earlier, the woman from Philly in her early 50s, she was expecting to move, and then she did the work. So actually I’m going to stay here, and it has these assets I don’t realize. The opposite has also been true. I plan on staying where I am, but now that I’ve thought about it in different ways, actually there are better alternatives for me for today and tomorrow. But I think it’s such an important conversation to be had because far too often individuals get surprised that their home isn’t supporting them the way that it could or should when they shouldn’t be surprised at all because part of the life process introduces new risks along the journey, and a home that might have worked for you for 20 years ago just may not be the right place now.
And by the way, I am not, this is in no way suggesting that aging in place is not necessarily a good strategy. What I’m suggesting is that aging in place without a strategy is not a good strategy.
Arnott: I’m curious, do you encourage people to try to experiment with living in different locations before they make a long-term move? Or do you think it’s better to think through what you want to do and go through the place planning formal assessment before you start actually physically trying out different places?
Frederick: Yeah, I guess a little bit of both. It’s been fascinating and, to some degree, humorous, at the cost of some other people’s stories where it’s like, wow, I’m from New York, and I’m moving to Florida. And so you move to Florida, and it turns out Florida’s not what you thought it was. Listen, plenty of people enjoy Florida. It’s not a knock on that. I think there’s some situations where you just kind of assume that what other people have done is going to work for you. Or Florida—big state, a lot of places within it, a lot of what I call “micro places” within it. So you maybe moved to Florida, you didn’t find your right micro place. Anytime you make a move—and my wife, I’m not a good mover, I’m not a good packer; I hate moving, but sometimes moving … we’ve had some substantial moves, our family, it was the right thing to go do—but there’s a lot of cost embedded in moving: financially, relationally, psychologically, etc. It’s not just the moving; it’s also the entering into a new place. And you’re never going to have 100% certainty. But yeah, as one might not be surprised by: I’m a big advocate of doing some thinking on the front end, and it’s not a ton of thinking for how much progress you can make.
What might be the other possibilities from where you are today that you should be thinking about or considering? And imagine what might your life look like in that scenario? And then, before, if in fact the path is to go potentially move to said place, really check your assumptions, your core hypothesis. Is what I’m assuming to be true, is that true? Because you can fall for optimism bias where, “Oh, of course I’m going to figure this out. Of course this is going to go happen.” And so to go, actually to your point, “Let’s go look at that. Let’s go to Fort Lauderdale. Let’s look at this particular neighborhood we’re curious about. Let’s …” “By the way, and let’s not be visitors. Let’s pretend we’re prospective residents. Let’s rent an Airbnb that’s in that neighborhood. If we’re going to move to a condo, maybe we rent to an Airbnb around that square footage size that we’re contemplating. Where would be that coffee shop we’d want to go to? Or if it’s a church or a place of worship that we’d be part of.”
Think of yourself not as a visitor, but as a prospective resident there, and have a list of questions going in. And so you’ll be surprised in some cases what you learn. And it’s not just helpful in what you learn. It’s also helpful because there’s some confidence you’ve built. So if it is the place you want to go to, you go into it saying, “I didn’t really skip important steps in my diligence on this.” And by the way, this is not a huge thing. It’s like a trip with the right questions for a particular place. I’m a big advocate because I think when I’ve seen this far too often, people just make mistakes. Smart people, they’ve been really successful in life. They just, for some reason, skip over this, and they become a victim of their optimism bias, and there’s a way to avoid that.
Benz: I wanted to follow up, Ryan, on your previous point that older adults can free up equity by selling their homes. So maybe selling the big suburban home and moving to a smaller place or renting a smaller place. I’m sure you saw that piece that showed that older adults often receive a lower price for their homes when they go to sell than is the case with the general population. You’re obviously not a Realtor, but I wonder if you could talk about how older adults can make sure that their homes aren’t low-balled when they go to sell them and that they can get the maximum possible proceeds.
Frederick: I talked to the writer of that New York Times article, and just like most stories, the truth is nuanced. Part of the reason why the home values may be lower on average for older homeowners is because their houses are older, and the floor plans may be not what a younger or other buyer’s looking for. There may be some deferred maintenance that hasn’t been dealt with, but that doesn’t account for the full disparity. And to your point in question, I think there’s a lot of value in a homeowner, as they’re thinking about their different options, to get an appreciation for how … and one other factor, too, that I think happens to older homeowners is if there’s some health event that then triggers a move to happen fast, then you’re subject to the market in that short window and that often is not advantageous. So I think for homeowners, older homeowners that have the leaning towards and see the value in planning, there’s a lot you can do.
You can sit down, there’s some Realtors out there that specialize in working with older people, so they can help you better understand what the process looks like when you sell it, but also on the other side they can help with moving recommendations and so on. But a few things: One—working with the right Realtor will give you a perspective on what are changes that may be valuable for a prospective buyer and what changes aren’t necessarily helpful. Just recently had worked with a couple, an older couple in the San Francisco Bay Area. They made a list of 10 things they were going to go do with some meaningful out-of-pocket. I said, “Actually, before you start to do that, go talk to this particular real estate broker who knows that market well, works with older sellers like you. She’ll be able to give you better intel in terms of what things on that 10 list are even worth doing.”
Second thing, like I said earlier: It’s just helpful to give yourself a window. Hey, if we’re trying to optimize our home value, what’s the right time? What’s our flexibility during that window, so we don’t have to sell tomorrow? Maybe we have a number of months where I potentially could sell. Maybe it’s over a year, and therefore you’re optimizing within a certain window, a higher number in this. So those are a couple things I would say for sure on this. And sadly, there’s scam artists out there that can be persuasive. “Buy your house for cash” offer. Just be mindful that not everyone out there is a good broker, honest broker. And I don’t mean real estate broker—just in general, you might find people that are explicitly exploiting certain homeowners, and just be mindful of that. If something sounds too good to be true, that it’s probably not true.
Those are a few things to think about. One other nuance I will say, though, is there’s a lot of talk about our housing stock in the US: How can we get more? And I guess there’s a bill that got passed recently to help encourage to take some regulation out to make it easier to build homes. But something we don’t talk enough about is, I think, a number of municipalities and states, there’s embedded financial dimensions to keep people where they are. It could be your low property taxes that, if you bought a new spot, may not transfer with you. That’s a significant one. We got capital gains, the amount of savings or protection there that hasn’t changed in decades. So in some cases, people do feel a little bit trapped in their house for financial reasons. So there’s a lot of nuances even on the financial side to work through, which a financial advisor can be very helpful with. But part of my broader thesis is that the finances is just one piece of this. If you’re optimizing the finances, but you’re lonely, that may not be the right place for you.
Arnott: I wanted to go back to the place planning assessment tool that you have built. And I’m wondering if someone wants to go through that process, what does it actually involve? Is it paper and pencil, or is there an online survey, or how does that actually work?
Frederick: When I wrote the book and actually had an early draft and shared it with some people, they’re like, “Wow, really like this assessment because it helps take some of these principles and apply it to my life in a relatively quick, simple way. And OK, note to self. At least they liked one part of the book. And then when the book came out, I got the same feedback, and I was like, wait a second, maybe there’s a way to make it simpler for people to go through an assessment, and maybe there’s a way to do it where even if you don’t have to buy the book, you could think about this a little bit. So I took the assessment, modified it, conformed it to the four quadrants of place I described earlier—environment, health, community, and finances—and then put what I felt, worked actually with a couple researchers, felt were pretty good indicative questions in each of those four domains, just put it online on the Here.life website, and people can take that.
On average, it’s about three minutes to go through that and it gives you just a snapshot of where, relative to those questions, how your current place may fit as you self-assess in those four dimensions. So it’s simple. It’s quick. Some financial advisors and other groups have used a modified version of that for their clients or whatever business they have, so it can be modified that way. Really, it’s, I would say, a very quick way to just put your toe in the water, if you will. The actual process to really think about this in a more rigorous way takes more than three minutes. And a part of it, too, is it’s so important to be thinking about how your place really fits you over the next five or so years.
So part of it, I think, is so important is imagining what you want your life to look like and what might be different in five years, more or less. And then what’s happened since the assessment, just kind of following the breadcrumbs, as it were, is that some people that took the assessment or various pathways are like actually I want to dig in more deeply. And that’s what led to the actual place planning process we’ve created, which is a little bit different. It’s like basically four sessions a month, online workbook, videos, and then you get a custom place plan. It’s more time, more effort, but people have just loved that. And that’s not for everyone, but if you find yourself down a path where place is on your mind, and the assessment perhaps suggests that you may be not in the best spot right now, that’s a pathway now for people to really dig into this in a meaningful way and then create momentum toward a better place, but really a better life is, I think, fundamentally what it’s about.
Benz: What separates a place that looks good on paper from one that actually fosters real human connection?
Frederick: It’s a tough question. There’s a role for these “best place to retire,” “best place to get a job.” There’s some merit in those. However, I think a lot of them are just clickbait, and their underlying analysis is not terribly rigorous. But even if it is rigorous, the algorithm that is best for you may not be the algorithm they’re using to come up with that list. And, as I said earlier, you don’t move. Like, when we moved from the East Coast to Austin, Texas, we didn’t move to Austin, Texas. We moved to a very specific neighborhood and block within this metropolitan area. It’s so personal in this, and specifically that, I think, part of what you’re referencing is that community component. The research and just the general dialogue in our society is pretty ripe right now. It’s hard to make friends. It’s hard to maintain friends.
As we get older, my dad turned 80 in January; he’s a character. He’s like, “I am no longer making friends my age. I’m not doing it.” I said, “Well, Dad, why are you not doing it?” “Because odds are they’re going to pass away maybe sooner than me, and I want friends I can have for a longer period of time.” And it seemed a bit me-centric. But nonetheless, he’s recognizing that’s part of the challenge. There’s changes in your social network. And so what might be the right thing for me may be the wrong thing for you. It’s a very personal thing. Effectively, how do you find your people? And there’s some research you could do. AI might help to some degree, but there’s no equivalent for experiencing a place and getting a vibe for what the people are like and also how interested people are in developing new friendships.
The Villages in Florida, the most successful master plan community in the history of the US: It is polarizing. You have some people that just love The Villages, and you have some people like, “Uh, The Villages, it’s morally wrong,” for different reasons. And there’s an argument to be had on both sides. I would say part of what’s, I think, an important lesson of The Villages is they’ve created infrastructure by design, a cultural ethos, where it’s easy to spend time and make friends with people. I shouldn’t say easy. It’s easier, not as difficult. I had a woman send me an email the other day. I have a biweekly newsletter with a blog on it, and I field questions. And this one woman was like, she said, “My mom lives near The Villages but not in an age-restricted community. And she didn’t want to be in an age-restricted community, but she also can’t take a golf cart to go get groceries where she is. And she’s at an age now where that’d be a lot more convenient if you could just pop in a golf cart to get groceries.” So I think this goes back to the comment around design thinking and testing things. I personally believe, of the four dimensions, the most important may be community, but community is such a personal thing. And so you’ve got to go test it out. You might know in some ways certain places that wouldn’t work, maybe just aren’t many people that are there. So there’s some things you probably could cancel on the front end. But for the most part, you kind of need to experience some of these places or, by proxy, good friends that you might have in a given spot that they can vouch for what it’s like, and then when you go there, you already have some embedded friends to begin with.
Arnott: You mentioned The Villages and the success that they have had with a model that involves a lot of infrastructure and predesign of a community. And I’m wondering if there are any other types of newer housing models that you’ve seen, like cohousing and accessory dwelling units, or are there other interesting trends that you’ve seen that you think look promising?
Frederick: Yeah, I do. I think part of what makes this complex is you might live in a certain area and love broadly where you live, your healthcare, maybe your family that’s there and other friends, whatever, certain assets. Maybe it’s emotionally, if that feels like home, that particular area. And it may be that some of these housing innovations aren’t in your place yet. So there’s the practical reality of like, well, it’s great that things are happening, but it’s happening where I want to live. So that caveat aside, I’m encouraged. I’m encouraged that you’re seeing zoning ease up and regulations in a number of different markets. I think Minneapolis is one that a number of years ago captured the news, following some other places as well, where they looked at their zoning rules, and I want to say something like 80% of Minneapolis was single-family housing only, couldn’t even have an ADU.
And so like, wait a second, maybe step one is can we make it easier for people to have multiple types of housing dwelling on a particular site? And that’s what some people in urban planning or housing, they described as “middle housing.” You have single-family homes, and you have 300-unit apartment buildings. What about that middle housing? The duplexes, triplexes, quadplexes, etc., smaller apartment buildings where we can use some of that land in a different way and perhaps generate more value for the land, too, which would motivate developers to create these alternatives. So I think that’s encouraging. You are seeing in certain markets more people dabbling in those middle-housing options. I’m particularly encouraged when people that are doing that, they’re recognizing that we have aging boomers today, but part of the broad trend in this is that we’re all going to be living longer probabilistically.
So we should be designing apartment buildings and single-family homes in ways in which we have some embedded flexibility. So it works if you’re in your 20s, but it works if you’re in your 80s. So I’m encouraged in some markets, and I’ve been part of some developments that have been part of that, where there’s some mindfulness around what that looks like. So that’s good. I think to your point about co-housing, I think co-housing’s still very small in the number of units that are available. I think it’s generally more Midwest-ish in terms of the density of where these buildings are. For those who are unfamiliar, part of co-housing is you own this community or are a fractional owner in this community. They vary in sizes. They’re often pretty small. One of the benefits of co-housing, though, is you go in with this shared sense of ownership, quite literally, but also in just the DNA of the community, and you’re working together, and that facilitates the sense of community with people having fewer kids and kids being geographically disparate.
This is a way to build in some community in where you live that may not necessarily be family. So there’s a lot of examples. I’m highlighting a couple of them. You’re also seeing some models where they can help connect people to rent extra rooms that you might have in a home. So it does some of vetting, maybe kind of the Golden Girls effect in a way. Some have actually linked to younger people, particularly in college towns where it may be expensive for younger people, and there’s older people with extra rooms. So there’s a number of different things. I’m not sure if any of them have really scaled yet, which is part of my point around it may not be available in your market, but I think we’re in a really interesting time of exploration, where not only from where I sit is important for individuals to invest and be wise about how to think about place, invest in their place planning, and I call that the demand side, but I think we also have an opportunity on the supply side, how can we make better places?
And I think there’s some interesting probably investment opportunities in that area over time, but also just the real estate developer market in general. How can we create places that it makes it easier for people to say, yes, that’s the right spot for me. And also be mindful about the economics. Again, in the context of people living longer lives. If it’s really expensive, not just on the front end, but on an ongoing basis, that does limit your market. So I’m hopeful with technology and different operating models, there’s going to be increasingly more models there that give us alternatives.
Benz: I wanted to follow up on your dad’s comment about age diversity. What did the data say about this? Is it better for us to live in an age-diverse community, or is it fine to live in a community that’s composed mainly of older adults? What do you see when you dive into the data on this topic?
Frederick: Yeah. Again, the right answer is nuanced. There’s a group called CoGen, a not-for-profit I admire greatly, who’s done a lot of work in this area, helping the cultural ethos to recognize the importance of generations working well together, in some cases living close to each other. To your point, they have some research they’ve done that speaks to the importance, that value, of having intergenerational relationships and just interactions and what it does for our mindsets and overall health. And so you have an argument on that side. On the other side is you’ll see environments where most apartment buildings, most neighborhoods, they are intergenerational. You have people of different ages, but how cohesive are they? So if you’re in a spot where you are in an intergenerational neighborhood, but you don’t know your neighbors, you’re not involved in the community that’s there, and then you could move into an age-segregated spot where a lot of community-building opportunities are designed in the physical infrastructure and in the programming and you’re likely to take advantage of that, for that particular individual, the better option actually might be to go to the age-restricted environment because you’re actually going to build more of a community than you would have in the other one.
So it’s very personal. One thing that has come up is people being self-aware of their personality. Am I introverted? Am I extroverted? How much is it important to have this environment set up for me? How likely am I to be able to create it even in today’s more challenging environment to make it happen regardless? So if you’re someone that can build community and you’re extroverted and it’s a real high priority for you, the right intergenerational environment may work great. If you’re more introverted and you don’t want to necessarily create all of that and you recognize that community is important, you may not have that in a strong way today, I could see an argument for more of an age-restricted community, all else being equal.
Arnott: So a lot of people like some of the features of continuing care retirement communities where you do have that built-in community, a lot of recreational activities and amenities as well as the ability to progress through different levels of care pretty seamlessly if you ever need them. Wondering if you could talk a bit more about some of the pros and cons of CCRCs.
Frederick: Maybe a theme from our podcast is the answer is nuanced. CCRCs, continuing care retirement communities, as you point out, a name that’s more widely adopted recently in the last few years, called life plan communities, at least a subset of these CCRCs. Now not trying to overwhelm our listeners here with acronyms, but the model, these CCRCs, when they were initially designed quite some time ago, many decades ago, the thought was exactly as you described. We’ll just kind of move across the continuum as our needs change. That’s not necessarily what’s happening today. So with technology, with people wanting to stay in their more independent living units within the CCRCs or life plan communities, life does not progress as neatly as the model might suggest. And so in some cases, it’s actually what would my life look like if care can be delivered to me? How can technology be embedded in an independent living unit? What does that look like for me over time?
A big question really is around community and commitment because a number of these communities, you move in, you pay a meaningful upfront fee and a monthly fee as well. Sometimes that fee you pay, it’s actually not a fee simple model. Typically, you actually don’t have an ownership in your unit. It can be difficult to leave, or you can leave, but you may not get your money back, or what you thought you were, and in some cases you can be on the hook for the monthly fees until your unit gets resold. So it can be a very effective model. It’s generally high occupancy. In the industry, people tend to live there for a long time, and it tends to be very beneficial. It’s complex because quite a number of people can’t afford it, but then you really have to think through the contingencies of in what way does it work for you.
And going back to what we were saying earlier about the 100-year life, the average age of people moving in is kind of early 80s now, something like that, across the industry. But it’s one thing if you moved in, you’re 80, and you might live to 90. It’s a different thing if you moved at 80 and, gosh, you might be there to 105. And given the cost of what’s involved, the opportunity cost related to that, the capital to buy it, and all the fees, you might be in a situation where you’re thinking maybe more nuanced. Maybe 80 is not the age, maybe it’s later on, maybe you have to think about a different model. So it has a lot of benefits, but it doesn’t really behave the way it was originally designed to because people aren’t “progressing” through the continuum as they once did.
Benz: You introduced the idea of a personal healthy aging dashboard. How can advisors introduce that type of dashboard into their client conversations?
Frederick: Well, I think for advisors, it’s a really interesting time. Stanford had an event earlier this year where we talked as a symposium invitation-only sort of thing. Hundred people—wasn’t huge. But we basically talked about/debated the future of the wealth management or financial planning field: At what point, in what way does this really turn into longevity planning? And I think what’s happening right now, in broad strokes, not any news to your audience, is that with AI and other alternatives that are out there, it’s still challenging, but it’s not that hard to construct your investment portfolio. And one of the questions that comes up, well, OK, if I have an advisor helping me with that, how much should I be charged on an annual basis for that? And you get some debate, well, should the AUM fees come down because of these competitive pressures, or should advisors, these firms, just handle more?
And what I’ve heard on the margins, some of the groups that we work with, they’ve made a decision. We want to actually help our clients more. That’s how we’re netting this. We don’t necessarily want to lower our fees, maybe we increase our fees, but we want to do more. And I think this area of place is one example where how can we move from not just financial management, investment management, but start to bleed a little bit into a broader mandate, which is how can we help you live your best life?
And as we move, as these advisors move into that world a bit, you start to have conversations not just about wealth span and the dynamics of maintaining that, obviously the most important responsibility, but managing that over a longer life. But you also have a dimension of, well, how about your health span? What kind of life do you want to … What activities? Do you want to be healthy enough to make it to your granddaughter’s college graduation or wedding or your great-granddaughter’s? What are the steps necessary to go do that? And when you have those sort of conversations, then yeah, these dashboards or assessments, etc., can be pretty helpful to help people think through what decisions, what trade-offs, are they willing to make to value your quality of life today but also be mindful of your future self. Sometimes there’s not a trade-off in that. Being physically active, if you enjoy that, that’s good today. Also helps you for tomorrow, but other decisions, there tend to be some trade-offs in this.
So I think it’s a really fascinating time for advisors. What we’ve seen in part is that ones that are stepping down this path a little bit, at least this moment in time, whether it’s with place planning or other similar offerings, they’re differentiated in the market. They’re having a different conversation. They can anchor their brand on something different than traditional retirement planning. So they’re differentiated for new clients, but then also if they really are able to wow their existing clients, then they can get a lot of referrals through these different networks that are out there. And we’re seeing that with a couple groups in particular with this differentiated offering.
And then another reason to be thinking about this also is that the alleged great net wealth transfer, to the extent, especially for older clients, managing some of the complexities of aging and the health dimension, if it’s not managed, there isn’t a plan. Sometimes those responsibilities fall upon adult children. And generally their lives are pretty full. They’re not looking to suddenly become experts in some of these domains. And so for an advisor to come alongside, add value in helping their clients age well in this, is also a value to the broader families. And that can be a conversation with younger family members that ultimately could be clients for an advisor if there’s a net wealth transfer at some point.
Arnott: Well, Ryan, thank you so much for joining us today. It’s been a super helpful and interesting conversation. And Christine and I are both at the phase of life where we’re thinking through some of these place- and housing-related issues both for ourselves and family members. So this has been really helpful.
Frederick: Well, Amy, my pleasure, and Christine as well. We started this conversation: “How did I end up in a senior living community for a month in my 20s?” And as I said, it’s really, for me, I’m just inherently a curious person, and I’ve kind of stumbled into something here with place, which, I think, it’s just enormously important. And so we’ve chatted for an hour. We could do it for a day. There’s so many different layers to this. I would say at the personal level, as you described, but just at the societal level. A good friend of mine, she’s the secretary of aging for Maryland. She’s actually changed her title, or they just passed something, I think, last year, making Maryland a longevity-resilient state. And so I think you’ve got societal dimensions like how do we prepare our institutions for this reality of this 100-year life?
And while I think that’s noble, important work, I think it’s so important at the personal level to lean into this, based on today’s reality. So thank you for having me. There’s so many pieces to it, and I love talking about it.
Benz: Thank you so much, Ryan.
Arnott: Thank you for joining us on The Long View. If you could, please take a moment to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts. You can follow me on social media at Amy Arnott on LinkedIn.
Benz: And at Christine Benz on LinkedIn or at @christine_benz on X.
Arnott: George Castady is our engineer for the podcast. Jessica Bebel produces the show notes each week, and Jennifer Gierat copy edits our transcripts. Finally, we’d love to get your feedback. If you have a comment or a guest idea, please email us at thelongview@morningstar.com. Until next time, thanks for joining us.
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