A new study compares the costs of living in a typical residential home versus a retirement apartment and the answer may surprise you.
As you come into retirement, one of the first things people tend to worry about is whether they have enough money saved up for a comfortable and secure future.
Budgeting and assessing the cost of living once you no longer work is one of the biggest challenges. You may begin to wonder if you should remain in your family home, or if there are financial benefits of moving into a retirement village.
Research carried out by the University of Technology Sydney shows that retirement villages are more affordable than general residential homes when considering total living costs.
The study was based on a like-for-like basis that compared nine retirement villages across Australia with general residential properties of a similar age, style and level of accommodation in each locality.
In fact, retirement village affordability is increasing. The Property Council’s 2021 Retirement Census revealed that the average cost of a two-bedroom home in a village sits around 55 per cent of the median house price in the same postcode, down from 67 per cent from the year before.
This means that there are potential financial gains to be had from the equity released when selling your family home, freeing up funds for you to do more of the things you love when you move into a retirement village.
Value for money
The real savings in retirement living comes from the facilities, health and lifestyle services that are not normally available in general residences.
For example, if you lived in your home and often frequented your local bowling greens or gym, you may have to pay extra to travel to and access these facilities.
Retirement villages, on the other hand, offer value for money in the sense that you can access these facilities and services as much as you’d like, all for a simple weekly fee, giving you budget certainty over your everyday living expenses.
Some of the facilities and services residents have access to in retirement living can include:
▪ Community Centre
▪ Swimming Pool
▪ Bowling Green
▪ Movie Theatre
▪ Village Bus
▪ Hair Salon
▪ Craft Room
▪ Communal Garden
The intangible benefits
There are other features and benefits of retirement village living that simply cannot be assigned a dollar value. This includes intangible factors such as security, companionship, community and peace of mind in knowing that there is always someone looking out for you.
Being able to form new friendships with like-minded residents, taking part in social events and feeling a sense of belonging are all emotional benefits of retirement living – and these are perhaps some of the valuable benefits from retirement villages.
And that’s exactly what we see here at Oak Tree. Many of our residents say that they have become more active, confident, and social since moving into Oak Tree. Some say they wish they’d made the move sooner.
You simply cannot put a price on an ideal lifestyle and high quality of life.
Important budget considerations
Before you make the move, take the time to fully understand all the costs involved. From the entry free, to the ongoing fees and exit fee, retirement village living comes with a range of new fees and payments that you may not have encountered before.
Some important budget questions to ask include:
- What are the upfront costs and ongoing, monthly maintenance, and exit fees?
- What is covered by the monthly maintenance fee? For example, are council rates billed directly to the residents?
- What are the arrangements and costs for electricity, telephone, internet, hot water, etc?