4 Things You Should Know About Retirement Villages

21.02.22 Retirement By Josh Sweeney
Retirement village

 

Summary:
  1. Be careful of financial advisers that claim to be experts in aged care advice.
  2. You may think you’re ‘buying a unit’ in a retirement village when in fact you’re lending a property developer your money, unsecured and interest free.
  3. Many retirement village contracts can be a terrible (financial) deal.
  4. There is a tool that may help.

 

As the baby boomer generation gets older, many will be considering retirement villages. Many financial planners, understandably, see this as an opportunity to make money. They advertise their services claiming to be experts in aged care. Take these claims with a grain of salt.

An adviser can help to some extent. They will be able to help you make sense of general aged care information. This includes an overview of the types of fees and charges that exist; what government assistance is available; the various accommodation options; etc. If you’re considering retirement accommodation however, you need to consider the advisers capacity to provide you with valuable, accurate advice, because…

 

…if you want a financial plan that includes a move to a retirement village, it’s going to be of very limited value if you don’t know exactly where you are going to live and when you are going to move there.

 

Retirement village contracts are extremely complicated. They are all different. Even a senior lecturer in applied finance can have trouble deciphering them (as shown in the attached articles).

The following two articles shed some light on retirement village contracts and if you’ve ever considered one, they are well worth the read. There’s also a link to a retirement village cost calculator that simplifies the various fees for you.

 

Articles:
  1. Retirement villages: the most complicated finance contracts in Australia
  2. Retirement villages: the destruction of retiree capital
Calculator:
  1. Retirement village cost calculator

 


General Advice Warning: Any advice given herein is general in nature and has not taken into consideration your personal financial objectives, situation or specific needs. As a result, you should consider the appropriateness of the advice as it relates to you before acting upon it. Always consult the relevant Product Disclosure Statement before making any investment decision relating to a specific product that has been mentioned.

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