Have you been considering whether a retirement home life is for you? Shifting house at any stage of life is a big decision, in fact many a survey shows it to be one of the most stressful decisions most people make in life. This can be further compounded when you have the added burden of downsizing – moving a lifetime of possessions and memorabilia into a space the size of an average family double garage.
There are a lot of decisions to make when considering making a retirement home move. Retirement village legislation in Australia is normally dictated by state rather than federal government and many are calling for an overhaul of the industry to make it more transparent.
Regardless of where you live many of the same financial decisions will need to be faced. Here are some of the bigger issues to work through
- Fees Please. Retirement village living doesn’t come cheap. Regardless of the provider and how ownership is structured most forms of retirement lifestyle will come with an entry cost, ongoing fees and an exit cost. Whether you own the unit (strata title) or are in a form of lease (leasehold title) you will invariably face these costs There is no standardization within the industry so it’s important you understand the contract in terms of fees, exiting and whether you share in any capital gain or loss that is incurred. You will need to budget how you will meet the initial costs and ongoing fees.
- Liquidating Assets. If you’re like most Australians your home will be your largest asset and this is most likely to be sold when you move. Preparing your home for sale can be a time-consuming process and you need to budget for any advertising costs or real estate fees in the process. Downsizing itself can involve costs, including shifting fees, however you may find you will pocket a little cash from selling off unnecessary assets. Unfortunately, a number of charities won’t take furniture or appliances that are over five years old, even if it’s in immaculate condition.
- Ask For Help. Your support network can help with the preparation of your house, selecting a home, and moving. They may suggest ideas you’ve not thought of. They may also be able to take excess furniture or appliances for use within the family or their network. They can also list things you don’t want on Facebook – we’ve found groups that are full of people needing a leg up, and a free working fridge, washing machine, or bed is money they don’t have to spend. Just make it a stipulation that they have to come collect it.
- Pets. If you have a pet, will they be allowed to move with you? Will it cost more? While you need to select a village that’s best going to suit you and your requirements for the future, is not being able to take your beloved pet going to be a deal breaker? This is especially so if you are making the move alone.
- Location. If you’re making the move, you should consider proximity of the retirement village to your loved ones. It’s more likely they’ll visit if you’re nearby, rather than 3 hours away. Finding somewhere near public transport also means there’s transport options available if you – or your friends or family – are not in a position to afford a car.
- Take A Friend. Why make the move alone? If you have friends who are in a similar position, they may be interested to make the move with you.
- Other factors. Now is the ideal time to review wills, insurance policies, and superannuation funds. Do you still need them? Do they need updating?
Despite many of the stresses involved in shifting to a retirement home a study by Australian National University show most people love the sense of community they get from being in a retirement village. 93% of those surveyed could name at least one advantage and only 25% saw any disadvantage to retirement home living.
Although less than 8% of people aged over 75 live in a home, 70% of those who do would recommend it to a friend. Retirement village living still suffers a poor image with many older people who see it as a loss of independence and a beginning of the end. There are however many advantages to it, including onsite nursing care if required and the providing of cleaning and other services. Access to facilities such as bowling greens, gyms, swimming pools and onsite entertainment further add to their appeal and it’s the social element that most retirees see as the number one advantage to their staying there.
Moving to a retirement home is as much a financial decision as a lifestyle one. Make sure you seek good advice, particularly in terms of understanding the village’s agreement. You’ve earned the right to a good retirement – it’s now time to enjoy it.
If you’re uncertain of whether relocating to a retirement home is financially right for you, you don’t have to decide on your own. A financial adviser (or planner) spends their days identifying and presenting opportunities to their clients. Our simple, quick, free service will connect you to the best independent financial advisers, based on your needs. Click here to get started.
The information in this article is general in nature and does not take into consideration your personal situation or circumstances. You should consider whether the information contained in this article is suitable to your needs and where appropriate, seek professional advice from a financial adviser or other finance professional.