MOVING FROM A RETIREMENT VILLAGE TO CARE

Orange Financial Planning can provide quality retirement and aged care advice to help you navigate this time including moving from a retirement village to care.

For many people, a retirement village may offer a great retirement living solution, especially when you start to find maintenance on a home more difficult or you want convenient social interactions. You might also be able to access some personal care and home help support in a retirement village setting.

As your care needs increase, you may be faced with the decision to move out of the retirement village and into residential aged care. This move will have financial implications and you may need to make decisions around how to structure your finances.

EXITING THE RETIREMENT VILLAGE

Retirement village (and land lease community) contracts are commercial arrangements and financial details vary greatly. When you leave (including for a move into residential care) the contract usually terminates, and the home is sold to a new resident. Check out a quick summary of the key financial impacts of an exit below…

RETIREMENT VILLAGE (lease/licence arrangement)

Amount repaid to you… Depending on the contract, you receive a refund of either the amount you paid or the sale price, less departure fees and other charges. This is often significantly less than you paid when you moved in.

Departure fees… Deferred management fees and refurbishment costs are generally deducted from your refund.

Access to capital gains… It depends on the contract whether you receive any share of capital gains, or the operator keeps all gains.

Ongoing fees… Ongoing maintenance may be payable until sold, but for a limited number of days.

LAND-LEASE COMMUNITY

Amount repaid to you… You need to sell the home and receive the sale proceeds, less costs of selling.

Departure fees… You may incur selling fees and expenses.

Access to capital gains… Depends on the change in market value – you receive gains if the home is sold for more than you paid.

Ongoing fees… You may incur ongoing fees until your home is sold.

PAYING TO MOVE INTO RESIDENTIAL CARE

Like any property sale, the refund from the retirement village may not be paid until the unit is sold. The sale process is often out of your control and timing may be protracted. You may have more control in a land lease community, but you still need to find a buyer.

The aged care fees start when you move into care. Financial advice can help you to plan how to use your other savings to fund the costs in the interim.

Depending on the state where you live, legislation may impose rules that help with this transition by requiring village operators (not land lease) to advance some of the sale proceeds as a lump sum or daily fee to help with aged care accommodation cost.

MAKE AN APPOINTMENT TODAY!

Give us a call at Orange Financial Planning TODAY to see how we can help with making the right decisions and understanding the impact of a move into residential care. Kim Bryant is a Financial Planner with Orange Financial Planning who is Aged Care Accredited and holds a Masters FP, Grad Dip FP, and Assoc FPA

Tyron Mitchell

Contact us today on (02) 5310 4477 or drop us a line HERE!

See here for more information on Orange Financial Planning services…

WHAT WE DO – RETIREMENT PLANNING                                              

WHAT WE DO – AGED CARE

Also check out our blog… PLANNING FOR AGED CARE – WITH EARLY PREPARATION AND GOOD ADVICE 

 

Mitchell Advice Pty Ltd ABN 44 625 356 872 t/as Orange Financial Planning is a Corporate Authorised Representative of Synchron AFS License No 243313. Unless specifically indicated, the information contained is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek personal advice from a financial adviser.