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Get Ready for User Pays Retirement Care

Retirement Village2Get Ready for User Pays Retirement Care

If you have ever flown Economy Class on a long haul flight and looked with envy at the First Class passengers enjoying their extra leg room, fancy meals with real plates and cutlery and personalised service, you will know what it will probably be like in rest homes and retirement villages of the not too distant future. User pays is becoming the way things are done in retirement villages and rest home and differences in care between those who can pay and those who can’t are likely to become even more pronounced over time.

The number of people turning 75 every year is expected to double in the next 15 years. There is already a shortage of rest home beds and retirement villages. Most of the investment in new facilities in recent times has been by targeted at those people who can afford to pay for their own care. Ryman Healthcare, Summerset and Metlifecare, the three biggest players in the retirement sector, are struggling to keep up with demand despite significant expansion. Meanwhile, Government funding is falling behind what is required for rest home, hospital and dementia care and there have been cutbacks in the subsidies available for home support services. Within the aged care sector in general, there are problems with staff shortages, low wages and financial pressures.

On present trends, those people in retirement with limited financial resources may find themselves having to make do with basic levels of care and accommodation and increased reliance on family members. At the other end of the spectrum, those who are able to pay will enjoy a high standard of accommodation with resort-like features such as swimming pools, gyms, movie theatres and beauty salons. Planning and saving for the kind of retirement care you desire is now more important than ever.

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Guide to Retirement Villages

Retirement Villages

Retirement villages are a great option for people who want a degree of independence in retirement but with the added benefits that come from communal living. There can be significant differences between retirement villages in terms of facilities and costs and it pays to do your homework before signing an agreement so as to avoid making costly mistakes.

There are four basic legal titles commonly used for retirement villages; licence to occupy, unit title, cross lease and lease for life. The type of title will largely determine how much it costs you to buy and live in your retirement unit. There are three types of cost that you will need to consider; the initial cost of buying your unit, the costs of living in your unit and the costs involved with selling your unit.

In many cases, the initial amount you pay gives you the right to live in your unit, but does not buy the unit itself. While you are living in the village, you will need to make regular payments to cover such expenses as rates, gardening, maintenance and healthcare. There are differences between villages as to what these ongoing fees cover. When you sell your unit, you may be required to pay for refurbishment of the unit to a certain standard as well as marketing and selling costs. In some cases, you may have no control over the sale process and when you sell you may not get the benefit of any capital gain on the unit.

Before you purchase, the retirement village must give you certain legal documents which set out your rights, benefits and costs and you are required to get independent legal advice on these before signing an agreement.

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