Δ
Deciding where you’d like to spend your later years is a big decision. Retirement villages offer many benefits for older people, including living in a supportive environment surrounded by like-minded people and they can be a cost-effective retirement living option too.
The cost of living in a retirement is an important consideration and, in many cases, a deciding factor of where people choose to spend their later years. Here we outline what the costs are for buying into, living in and leaving a leasehold retirement village (the most common RetireAustralia village), so that you’re able to make an informed decision and have certainty about your financial future.
When it comes to retirement villages there are three types of ownership agreements. These are:
The most common types are lease and licence, this is where you purchase a long-term lease to live in your home.
For lease and licence there is an entry payment, the amount will depend on the size, style and location of your home. Unlike most property transactions, you will not have to pay stamp duty on your new home, so this equates to a significant cost saving on entry.
At RetireAustralia, we have an independent living residence contract that we provide in our leasehold and licence villages, which includes disclosure, cooling-off and settling-in periods. This provides peace of mind should you change your mind within the cooling-off period – you’ll get your deposit back in full. If you move in and you decide the village isn’t right for you within 90 days, we’ll reimburse your entry payment minus accrued service charges, any reasonable costs incurred for renovations made at your request, and a pro rata rental fee for your time in the village.
Many residents in our retirement villages describe life as relaxed, secure and stress-free, as the facilities along with garden and maintenance are looked after by a dedicated team. To cover these costs, there is a regular service charge. By law, village operators cannot profit from service charges, so they are only charged on a cost recovery basis.
The service charge covers things such as:
RetireAustralia will prepare, market and sell your home for you, in most cases at no extra cost, except in the event of exceptional wear and tear, damage, or alterations or additions to your home.
Under our independent living residence contract, offered in our leasehold and licence villages, we will buy back your retirement home if not sold within 6 months (New South Wales) or 18 months (Queensland and South Australia) to give you the certainty to plan your next move
Like the majority of retirement village operators, RetireAustralia retains a portion of the funds from the sale of your home as a deferred payment fee.
The fee is effectively an ‘enjoy now, pay later’ scheme, which helps reduce the cost of moving into a retirement village. It covers RetireAustralia’s initial investment in the village and helps to ensure that all residents have access to quality facilities and amenities while they’re living in the village. It funds capital replacement works and village upgrades.
Our independent living residence contract, offered in our leasehold and licence villages, allows you to calculate exactly how much you’ll get back based on your entry payment. So from the day you move in, you’ll be able to calculate how much you will receive when you leave the village – making your future budgeting clear and predictable. The deferred payment fee will not exceed 35%, no matter how long you stay in the retirement village. Many of our residents feel secure armed with this knowledge, especially in times when house prices are volatile. You can calculate your deferred payment fee here.
The best way to really understand the true cost of living is to spend time with a sales consultant in a village. They will be able to talk you through your individual circumstances and needs, and help you understand the fees and inclusions in your chosen village. It’s also important that you do your own homework and make sure you have an accurate picture of your current living expenses.
In a general sense, retirement villages offer great cost of living value but trying to put a specific dollar figure to this comparison can easily become misleading. Your own cost of living and those applicable to villages can vary substantially, so it’s best to check with your village of choice directly.
On top of the hard costs listed above, which village fees cover, the costs associated with living in a retirement village also provide residents with a sense of community and belonging, support from friends and staff, and numerous opportunities to lead a happy, active and healthy life. Life in a retirement village can also give you peace of mind knowing that care and support is available should you ever need it. Best of all you will never feel alone or isolated.
Tarragal Glen Retirement Village resident Gordon Crawford did a lot of research into the costs and financial elements of living in a retirement village before making the move, but found he couldn’t put a price on the community he moved into.
“Having settled into our new home, we discovered a sense of community we hadn’t expected,” Gordon says. “We enjoy social events such as BBQ night (where occasionally we have live music), Coffee Corner, Lunch Box, Drinks at 4 and the Village Manager’s morning tea. Through this we now consider many of the residents friends. Friends who care about each other and keep an eye out for anyone having difficulties.”
Placing a value on these intangible benefits is very personal to each individual. To get more of an insight into what it is like to live in one of our retirement villages, take a look at some of our other resident stories.
