Retirement Living Options
A good financial advisor will explain your options in plain English. Below is a list of questions you should be able to answer before settling: ◆ Will someone else still be living in the principal home? Should it be sold or rented out? ◆ What will be the impact of the move on your Centrelink payments (if any)? ◆ What special tax offsets may be available when living in retirement villages?
◆ Are there Capital Gains Tax (CGT) advantages to passing on the former home? What if the house is retained throughout your time at a lifestyle village? ◆ What are the entry and ongoing costs of retirement villages, and can these costs be funded effectively?
Can’t plan? Engage someone who can During times like these, it is worth seeking the assistance of a qualified financial advisor. Having someone who will work closely with you to provide solutions may help. A good financial advisor will explain your options in plain English, and will make sure you are aware of the options that could significantly improve your overall financial position.
as simply as possible, your current financial position. This could mean identifying any investments like shares, property or other assets you hold. The services of a financial advisor may also involve clarifying any income streams, including government pensions, you might be receiving.
Borrowing money Borrowing money to enter a retirement village may require the expertise of a mortgage broker who understands what the lenders are looking for in the way of deposit or equity. Funding for these villages mostly comes from major banks and private lenders, but with larger deposits some second tier lenders can help.
The first thing your financial advisor may do is help you to understand,
Your rights & responsibilities The idea of downsizing and living in a retirement community may be appealing, but confusion and conflict can arise during your tenure if you make the move without understanding the financial or legal implications.
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t’s important to understand your rights, responsibilities and obligations under the contract, before you sign.
requirements of what information and documents need to be supplied to you before you commit to a retirement village.
Do your research
In Western Australia for example, you must be given a disclosure document outlining your contract, all applicable costs you will be charged for and a document detailing your rights, at least 10 days before signing a contract.
Before you sign a retirement village contract, shop around and do your research. Visit several villages that fit your requirements before deciding, talk to residents, look at the facilities and compare contracts. Retirement legislation is set by individual State and Territory Governments and each has different
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Your Retirement Living – 8th edition
In New South Wales, retirement villages are required to use a standard contract and it is compulsory that you receive a
disclosure document at least 14 days before signing a contract. South Australia has a cooling off period of 10 days and on top of that you are entitled to a 90 day ‘settling in’ period, in which you can receive a full refund of the purchase price minus any rental costs for the time a unit was occupied and costs for services used. You will generally not receive your exit entitlement back until the residence has been re-licensed if you leave the village during the settling-in period.
