<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1017783349543426&amp;ev=PageView&amp;noscript=1">

Does your retirement community care?

Rachel and Jo (2)
Does your retirement community care?
3:58

Leading aged care financial expert Rachel Lane says the most important question to ask when downsizing to a retirement community might seem obvious but is often overlooked.

Speaking on Ryman Healthcare’s Pod of the 3rd Age podcast, the Principal at Aged Care Gurus said people considering a retirement village should always ask one simple question: "What will happen if I need aged care?"

“You’ll find the answer to that question varies from 'we’re a care free community' - that means if you need care you need to leave - through to 'here is a menu of our services, we have people that can help you navigate the My Aged Care assessment, how would you like us to support you in navigating that?' and everything in between,”
Rachel

CLICK HERE TO LISTEN TO THE EPISODE

Data from the 2023 PwC/Property Council Retirement Census shows 55 per cent of retirement operators in Australia reported the most common reason a resident moved from a village was to enter aged care, while less than half of the 61 new retirement villages built had residential aged care onsite.

Rachel said stigma prevented people from asking and in some cases, even thinking about aged care when entering retirement living.

“People don’t ask about it because they don’t need care right now, or they somehow think that having conversations about care is a slippery slope to a nursing home or that you might be inviting the need for care,” Rachel told Pod of the 3rd Age host Jo Stanley in an episode released today.

What care is available is just one question people considering retirement living need to ask.

Rachel said purchasing an apartment at a retirement living community is unlike any other transaction a person has made and needs to be treated accordingly.

Whether a resident felt they were getting value for money in their retirement community was highly dependent on their connection to the community.

 

 

“I’m a money person, so of course I’m going to say 'crunch the numbers', but you have to find a community that has the right vibe,” Rachel said.

“No one wants to move into a retirement community and feel like a square peg in a round hole.”

Looking at a village's activities calendar and asking to attend events, such as Happy Hour, to speak with existing residents was a way to check the 'vibe'.

While retirement communities ranged from simple, small, and affordable, to highly exclusive, it was important a person established their 'ingoing, ongoing and outgoing' expenses when deciding whether they could afford their preferred retirement option.

“A purchase price might be lower, but that doesn’t necessarily mean that it’s cheaper because you’re only looking at one part of the transaction,” Rachel said.


Other factors to consider as "ingoing" costs include contract preparation fees, and legal and financial advice.

The "ongoing" costs, sometimes called a recurrent or general service charge, are charged weekly, fortnightly or monthly and operate on a cost recovery mechanism for amenities and services. Villages with greater amenities and services will have higher fees. Personal expenses should also be included as ongoing costs.

Rachel said "outgoing" costs often caused the most confusion.

“Exit fees exist because retirement villages want to keep the upfront purchase price as cheap as possible and they’re not allowed to profit from the weekly or monthly service charge,” she said.

“The exit fee is really the only way to compensate them for those two things…

“So, when you’re looking at the exit fee it’s a matter of saying ‘is this fair, does this reasonably account for those two things?', factoring in that part of that will be the operator’s profit.”

After working out expenses and completing a vibe check, Rachel says there is one final question to answer before choosing a retirement community.

“Do I love it?” 

Listen to ‘How do we manage our finances to afford to retire comfortably?’ on Pod of the 3rd Age (P3A) on Spotify, Apple Podcasts and on our website.

by Margot Taylor | Aug 9, 2024

Subscribe to our blog newsletter