How do retirement villages offer financial security?

How do retirement villages offer financial security?

After working hard all our adult lives, it’s only natural that we want to feel financially secure in our later years. This can mean different things for different people but knowing that you can afford your home and the costs associated with it can be a great comfort. For many older people, living in a retirement village can offer them a sense of financial security that other options can’t. We look at the ways in which retirement villages can do this.

Affordability

It’s difficult to watch the news these days and not hear about the housing affordability crisis. Property prices across the country have continued to rise to record levels. This is where retirement villages can offer an affordable option. The price is generally 80% or less of the equivalent type of property in the same suburb, and that is not taking into consideration all the benefits, amenities and sense of community a retirement village can offer. Which is why living in a retirement village is an attractive choice that is growing in popularity for older Australians.

Put simply, by paying less for your home, you will have more in your pocket to help live the way you’d like to live!

Clear costs

Being in control of your finances and having certainty over your financial future is one of the attributes that many people find attractive about retirement villages. The majority of RetireAustralia’s villages are leasehold or licence villages where we offer an independent living contract. With this contract, from the day you move in, you will know the outgoing payment you will receive. In uncertain times, you may find it comforting to know exactly where you stand financially.

RetireAustralia’s contract suits people who want a high level of clarity and certainty about their financial future and their care and support needs. The Exit Fee or Deferred Management Fee (DMF), which you pay when you leave a retirement village, is capped. The DMF is a percentage of the ingoing contribution and is not impacted by capital loss or gain so you can calculate your exit entitlement at any time and know exactly what you will receive.

No unexpected outgoings

One of the aspects many residents love about living in a retirement village is having the maintenance and garden work taken care of, leaving them more time to do the things they enjoy.

Your regular service charge will cover the cost of having a dedicated onsite team, who looks after things like home and garden maintenance and upkeep of common facilities. While these costs will increase from time to time, by law these charges are based on cost recovery only, meaning village operators cannot profit from them.

This also means that if you live in any of our licence or leasehold villages you won’t be slugged with any unexpected sinking fund levies to pay for major renovations.

What if your situation changes?

If you need to move to a different unit, or care accommodation within their network, RetireAustralia transfers the equity in your existing unit to a different unit. You may not need to contribute any more funds for your new unit, and if you do, RetireAustralia offers deferred payment options where the ingoing contribution for your new unit can be made in instalments.

Additionally, RetireAustralia only charges one DMF, so if you move to a different unit or care accommodation within RetireAustralia’s network your DMF calculation does not restart. This can be a great option if you wish to move interstate to be closer to family, or if your care needs are increasing and you want to stay within, or close to, your community.