Retiree Dorothy Webster has dipped her toes into retirement village living. Here she explains why you must do the maths before signing the dotted line.
After spending a working life paying off your mortgage and/or accumulating savings, there comes a time when you wonder how you are going to live in old age without parting with your hard-earned capital? I have been investigating the choices for retirement.
There is the lifestyle choice of going to live in a retirement village but the terms can vary considerably. Some places I researched are a bit kinder, you purchase the property and when it is sold you get the capital gain less a commission for selling it. Both of these options have a weekly fee for the use of services such as swimming pool, club house, workshop etc.
The villages in Australia have a variety of terms so it pays to read the small print. They also have contracts that require exit fees when you leave. They all expect you to leave the property in excellent condition so a coat of paint and either a commercial carpet clean or replacement is also at your cost.
However, if you go into a village as husband and wife and one of you becomes ill and needs to be moved into the care facility the costs will increase substantially. You will still have to pay the weekly fee for your property and use of their facilities plus you could have to find approximately $1000 a week for care of your spouse. When they are getting the capital gain as well you could soon see your life savings disappearing fast.
We always intended leaving a paid-up house to our two sons to help them cope with inflation so we were very cautious about checking out the retirement villages. They are very sociable places to live and the one I stayed at with a friend in was very friendly.
Another aspect of this is if you want a change of retirement village after say ten years, which a friend did after her husband passed away. People are living longer these days so leave yourself options and do not get stuck in a deal where you have lost control of your life.
Alternatively if you have a good circle of friends and you have a home that is handy to facilities like a good supermarket, a working men's club, a medical clinic and chemist that you can reach with a short walk I feel that is a safer choice. I still drive but I see pensioners waiting outside the supermarket for taxis home after shopping. That must add a lot to the shopping bill and even if you have a handy bus service you would not want to carry a lot of groceries on the bus when you are getting on in age.
We never know when the doctor will decide we can no longer drive either from memory or eyesight problems. If you do not live near shops I would strongly recommend getting a small computer capable of internet so you can order your food online and have it delivered. Not just for the convenience, it actually saves you money as you are not tempted by any impulse buys that happen when in the store.
Safety is an issue too which is probably why a lot of people prefer the villages but a good dog can help with that problem. There is help available in your own home if one of you becomes ill.
Another reason we decided against moving to a village were the rules. We have solar panels on our roof and we have changed things on our section and house to suit ourselves which you cannot do in a village. I also like to grow my own edibles, both fruit and vegetables. I like to have a bit of garden to potter about in if I feel like it without too much maintenance.
I cannot have lots of flowers as they have in these villages as I am a hayfever sufferer so I have a low allergy garden. I also have a dog who keeps me fit and is great company. Most homes allow you to bring an existing dog but you cannot replace them if they should die.
If you are thinking about moving to a village I would advise you to make a list of advantages and disadvantages and check out their contracts and do the sums. After all it took most of your lifetime to earn it so do not be easily parted with your home or savings.
Written by Dorothy Webster. First appeared on Stuff.co.nz.
Article created in partnership with Over60