Retirement villages are set to play a critical role in the future of aged care in Australia. Villages not only provide facilities and safety, but they also bring community.
In this article, we will talk all things retirement villages. We’ll guide you all the way from downsizing, to getting happily settled in a village – and everything in between!
Topics covered in this blog:
- Is it time to downsize?
- Retirement villages: your key to a carefree retirement
- Retirement village contracts and fees
- Types of retirement villages
- Choosing the right retirement village for you
Hit the link and you’ll be taken to the corresponding section.
Is it time to downsize?
For many older Australians, the journey into a retirement village begins by selling the family home.
While the thought of ditching the family home is inherently stressful, selling and using the equity to downsize has many financial and lifestyle benefits.
Common reasons for downsizing include:
- Being an empty nester
- Home and garden maintenance becoming overwhelming
- Wanting to prioritise leisure
- Wanting a sea or tree change
- Freeing up equity and increasing cash flow
— Risks of staying in the family home
Staying in the family home is not without its risks. The most concerning are the health risks.
As we age, the likelihood of falling increases. Retirement villages have been specially designed to minimise this risk. Think features like no steps, wider corridors, bigger bathrooms, and showers with frames that can be removed.
This freedom to move also gives you an increased sense of autonomy, allowing you to stay independent longer.
Compare this to staying in the family home. As people age, it’s common to start ‘restricting’ themselves to small areas of the home or garden. Not to mention very few trips outside.
Retirement villages: the key to a carefree retirement
It’s a common misunderstanding that retirement villages are ‘institutions’ not unlike nursing homes. This really isn’t the case. Retirement villages are small cluster communities designed to help you get the most out of your retirement. It’s all about balancing autonomy with support.
The operator of your community maintains an ongoing management role, which is critical as you age. This means there is a responsible person who keeps an eye out for you and your interests.
Some of the other advantages of downsizing into a retirement village include:
- A lower cost of living
- A dwelling designed with ageing in mind
- Access to social groups and a sense of community
- Emergency support
Retirement village contracts and fees
Retirement village contracts are very different from conventional property ownership. In most retirement villages you don’t own your own home, you lease it. This is an agreed-to period that covers the whole of your retirement.
Also different is the fact that you pay the lease up front as a lump sum. You don’t pay any more for your home until you leave, which is usually when you pass away. Your estate then receives back your lump sum minus the rent you need to pay for the time you were in the village. This is called a Deferred Management Fee, or DMF for short.
You will also be required to contribute to the cost of running the village which can average $80 to $100 a week. Residents control this budget, and the operator cannot by law make any profit from it.
Types of retirement villages
Now you understand the benefits and fees of retirement home living, let’s look at specific village models.
— Serviced Apartments
First up is the most straightforward model: serviced apartments. As the name suggests, these are independent apartments with access to services. These include cleaning, fresh linen, meals and low-level allied care support.
Serviced apartments tend to be smaller, usually one bedroom or a studio apartment, with a kitchen suited to light meal preparation only. Main meals are normally provided in a communal dining room.
— Rental Villages
Rental villages are designed with older retirees in mind, starting at 60+ and going well in the 80s.
In Australia, we have two types of rental villages. The first is the traditional retirement village where the operator provides several village units for rent.
The second is the single-purpose rental village. This is a gated community, usually with around 50 single bedrooms or studio units and a community dining room.
— Co-Located Villages
Co-located villages are retirement villages that have an aged care home (nursing home) either attached to it or on the same campus.
In the past, this model has been unpopular with customers and operators. However, things are changing.
As retirement villages shift away from resort living to supported housing, having an aged care home attached to the village is increasingly desirable.
Choosing the right village for you
While we are big advocates of retirement village living, it’s not for everyone. It represents a big shift, so before committing it is important to make sure it’s the right fit for you.
The best way to do this is to try before you buy. Try living in a retirement village for a few weeks and see if you like it. During this time chat with residents and staff to get a feel for the community and the lifestyle. You could even try going to some of the village’s social events!
Don’t know where to start?
