Moving into a retirement village can come with a number of fantastic advantages to help make your retirement years easy and enjoyable, from like-minded individuals to amazing amenities right on your doorstep.
But working out all the costs involved with making the move can be quite overwhelming. Then there’s the Age Pension implications, whether or not you can claim Rent Assistance, and what will happen to your Home Care Package costs to be considered. All of this financial confusion often leads to inaction.
Working through the intricacies of financial arrangements can be daunting, particularly for those who don’t deal with these matters regularly. But now there’s a simple and effective way to avoid any nasty surprises, helping you make the best decision for you and your retirement living.
There are different types of contracts and tenures used by retirement villages throughout Australia. Depending on which one the retirement village operates under, this may affect some of the fee structures we will explore today.
The most common purchase structures in the industry are a Loan and Licence Agreement, or a Loan and Lease Agreement. This is where you pay a fee to live in the retirement village but do not own your apartment or unit. It also means that there is no stamp duty or GST payable by you. Purchasing under this type of agreement involves fees such as:
Many – but not all – retirement villages charge an entry fee, and this cost can be referred to as an entry payment, a purchase price, a lease premium or an ‘ingoing’ contribution.
Ongoing service charges (also known as the service fee, general services charge, recurrent charges or weekly/monthly fees) cover the costs of living in the village including maintaining the shared facilities, grounds upkeep, and property costs including lighting, security, insurance, and waste management. They are charged by all villages, regardless of title type. Operators are not allowed to make a profit on ongoing service charges, they are charged on a cost recovery basis.
Also known as the departure fee or deferred management fee (DMF), this is the cost you are required to pay once you leave the village and is directly related to your entry fee and how long you’ve lived in the village. Typically, exit fees are the biggest cost residents pay as a result of living in a retirement village.
Thanks to Village Guru, you can now compare your options with an individual report customised to you and the retirement village you’re considering. Best of all the report is free.
The Village Guru Essentials Report equips you with the knowledge of all the fees associated with your big downsizing move, so you can understand and compare the costs. This includes:
This comparison tool also offers the ability to compare different payment options or properties within a village or even one village with another, making it the best way to uncover everything you need to know before signing on the dotted line.
From big household names like Ingenia, Aveo, Australian Unity and Bolton Clarke to Anglicare, Living Choice, Sencia and more, hundreds of villages are already using the software. When visiting a village, ask for a Village Guru report, visit www.villageguru.com.au or give them a call on 1300 855 770.
It’s important to know that a Village Guru Report gives you great information but it’s not financial advice. You should seek advice from an accredited Retirement Living and Aged Care Specialist adviser who can help you understand all of the costs and provide you with strategies for meeting your financial objectives.
With each retirement village offering their own payment structures, it’s always a good idea to research your options to find the best fit for you and your budget.
Download your free copy of ‘Considering a Retirement Village: The Ultimate Checklist’ for more key considerations that you need to know before you start your journey into retirement living.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.