The real cost of a retirement community

Just how much will it cost to move into a retirement village? Our resident finance expert crunches the numbers for you.

The most common question I get asked is, “How can I crunch the numbers on moving to a retirement community?”

The simple answer is to get a Village Guru report from the community you’re looking at moving into – that way the numbers are crunched for you. But if your chosen village won’t give you one, then you’re going to need to crunch the numbers for yourself or get someone who knows how (like a specialist adviser) to do it for you.

It’s important to know that using rules of thumb such as, “If I sell this house for more than I pay for my new home, it’s affordable” are dangerous. Likewise, comparing villages based on purchase prices or the exit fee percentage can be just as misleading, because you’re only looking at one part of the transaction. You need to make sure you’re clear about what you’re going to pay to the village upfront, while you live there and when you leave.

Downsizing to a retirement community can have much wider financial implications than what you pay to live there. You also need to make sure you understand the implications