Are you considering moving into a retirement village?
At first the numerous facilities and up front prices may seem to be perfect for you but it is important that you are aware of all of costs of retirement living.
The most important piece of advice for those considering selling up and buying a property in a retirement village is that you should not be doing it for a financial investment, what you are buying is a lifestyle. Retirement village contracts have long-term financial consequences which come in the form of exit fees.
Do your research
There are different structures and services that different retirement villages offer, so it is important to make sure you shop around, that the prices you are looking at are fair and that you are aware of the services that you will receive.
Get advice early on
There are only limited periods in which you can change your mind about entering into a retirement village contract so it is extremely important to get advice early on, so that you do not find yourself locked into a contract that you are not happy with.
Know about the exit fees
There is more than the upfront and ongoing costs to consider when buying into a retirement community. Exit fees are usually the most significant financial obligation associated with retirement village contracts. This is the business model that retirement communities operate on – residents get a higher standard of services and lifestyle than what they might otherwise have access to and they pay for it on exit.
Most retirement village contracts include an exit fee which increases over time (up to a cap) and there are huge differences in the fees to be paid between different retirement villages.
What if things change?
Many retirees think that the exit fees will not be much of a concern to them, thinking that they will remain in the village for the rest of their lives. But you should think about how a change in circumstances might affect this:
- If you have moved to a retirement community to be close to your family and they move away. What if you want to go with them?
- What if your children’s circumstances change and they need more assistance from you in the care of your grandchildren?
- What if your health circumstances change and you need a higher level of care which the retirement village cannot offer?
- What if you simply do not enjoy retirement community living like you thought you would?
- What if your financial circumstances change?
Generally, you will not receive back enough capital on exit from a village to pay for an equivalent lifestyle elsewhere. So, make sure you have a contingency plan in place.
Miller Harris Lawyers can help you traverse the process and enter into retirement living with your eyes wide open to avoid unwanted surprises later on.