In this second article on retirement homes, Charlene Clayton looks at the factors you should consider before moving into one of these complexes.
As exciting as they may appear in advertisements, retirement villages are not for everybody.
Syd Eckley, executive director of the South African National Council for the Aged, says your emotional and social make up must be suited to retirement village living for such a move to be a success.
A retirement complex is the right choice if you are able to continue your existing lifestyle in the village and if you enjoy mixing with people.
But if you are a loner and are particular about your privacy, you may need to think again.
Obviously, the type and layout of accommodation in the retirement village will affect how much privacy you will have.
It is commonly believed that once you move into a retirement village, your next move is to the cemetery, but this need not be so, says Eckley.
Provided you are not the type of person who finds moving traumatic, it may be more economical to take your move into a retirement complex one step at a time.
For example, if you are between 50 and 65 years, active and healthy, there is no reason for you to move to a retirement complex offering a state-of-the-art medical clinic, frail care and other facilities.
You may be quite happy, and it may make financial sense, to move into a complex which has fewer facilities and therefore costs, but one which still satisfies needs such as security.
If you are between 65 and 75 years and require some help, but are not frail, you can consider moving to a complex which offers a communal centre, dining facilities, a clinic and a sick bay which caters for temporary stays. It is not necessary for the village to have 24-hour frail-care facilities, which are expensive and push up the levies.
If your 75th birthday is approaching or has passed and your health is failing, you should consider a retirement village which offers the full range of amenities including healthcare facilities.
If you have decided that retirement village living is for you, the following guidelines will help you with your choice:
Shop around for the best investment
Ensure that the reputation and track record of the developer is above board;
Be pro-active and make it your business to find out how the project is being financed and who holds the bonds over the property;
It is not enough to bank on a well-known financial institution being linked to a scheme. Remember that the institution will be first in line to collect its money, should things go wrong financially;
If the village is still to be built, check that the developer has enough capital and don't be shy to ask to see a copy of the bank guarantees;
Ascertain that the ground on which the complex is being built has been registered in the name of the developer;
In the case of new or incomplete projects, make sure the developer can fulfil his promises. To do so, obtain written confirmation and guarantees from him;
Eckley also suggests that you talk to residents already living in the village but don't do this in front of the sales personnel.
Levy
When considering a unit in a retirement village, calculate roughly whether the monthly levies are realistic in what they must cover.
If not, you can expect them to rise substantially in the future.
When you visit an established sectional title scheme, ask some of the residents whether the levies have escalated and by how much.
The latest trend is towards fixed levies. A levy stabilisation fund is established in order to keep levies fixed and this is funded by a percentage of the profits taken on the resale of the units.
Management of the Village
Frequent gripes in retirement villages concern the management. Check up on who is responsible for the management of the complex, the maintenance of the communal buildings' electricity, the plumbing in the units, the exterior of the units, the gardens and the insurance of the building.
Make sure the managers are experienced in managing a complex and ascertain how often they hold meetings with residents.
Village Lifestyle
The general atmosphere in the village is important and you should visit the complex to gauge this. Are the residents relaxed and do they get along with one another? Don't be shy to ask some of the residents how they are treated by the staff.
Ask residents what they do with their time and establish what happens when you become ill. Also find out about the level of security and whether there have been any incidents in the complex.
Services provided should be up to standard. You have every right to request menu details if the complex offers dining facilities and to visit during a meal time.
Accommodation
Your accommodation needs must be met by the village you are considering buying into. View the unit or room before making a final decision. If the accommodation is to be shared, try to meet the other residents to see if you will get along with them.
The South African National Council for the Aged has a database of villages in South Africa which is available to the public.
Healthcare facilities
Frail- and semi-frail-care facilities are a very important aspect of a retirement village. If you are moving into a retirement village because of its ability to provide frail care, you must make sure it is up to scratch.
You should also look at whether there is a medical centre, clinic or hospital nearby.
It is vitally important to find out what happens to you in the village should you become frail or ill. Under life right, for example, you may be moved into the frail-care centre permanently and lose your right to live in your house or apartment.
You can expect to pay a daily fee of about R150 for every day you spend in frail care, although some complexes will allow you a certain number of free days a year in their frail-care facility.
Eckley says that you should be wary of complexes charging less than R100 a day for frail care.
Calculate whether you are able to afford frail care. The worst case scenario is that you need to live in the frail-care facility permanently, and your spouse remains on in your cottage with all the consequent costs and levies.
Eckley strongly urges potential buyers to take out additional health insurance even if they are moving into a complex which has a full service frail-care centre.
Clive Mantle, manager of the West View Lodge old age home in Johannesburg, says many retirement villages in Johannesburg have either inadequate frail-care facilities or have closed down their frail-care sections. Mantle says because frail care is expensive to provide, many developers are struggling to find the formula for it that works.
Other Facilities
Other features you should look for in a retirement village include parking for residents and visitors, social and recreation areas in the communal buildings, a transport service, a laundry service and a library.
On the other hand, beware of over-development at a village. Facilities such as bowling greens, swimming pools, club facilities and extensive frail care can eventually become a financial drain on the village.
Be wary of complexes which have lavish marketing exercises that continue over a long period of time.
Your family and familiar surroundings
Consult with your children and family about your move into a retirement village, says Eckley.
Your relationships with your grandchildren is very important, especially in later years. If you move into a complex which is not attractive for people of various ages to meet and mix freely, it could be a problem.
Also if you make the wrong decision, it could have a negative effect on your children, for example if they need to bail you out financially.
Eckley says you should be careful of moving too far away from your familiar surroundings, especially if you have been happy in your community during your active years. It has been proven that the older you get, the more difficult it becomes to form ties, he says.
The Contract
You must have a contract which stipulates in detail which services you can enjoy, especially on the issue of health care. If you don't understand any aspect of the contract, get somebody to explain it to you.
Eckley says that the contract should always be scrutinised by your own attorney.
And when you have bought your house or unit, keep a duplicate of the signed contract in a safe place.
Financial Security
Taking into account the fact that the financial position of older people normally deteriorates over time, combined with the fear of running out of money, it is crucial that financial viability is assured, says Eckley.
Make sure you understand what you are buying in terms of ownership and rights. The different financial structures under which retirement villages operate was covered in Personal Finance last week.
Eckley says that you should have a fixed monthly income of more than R5000 if you are considering moving into a sectional title scheme and then you must ensure that it has a levy stabilisation fund.
Life right schemes are suitable for middle-income consumers with a fixed monthly income of more than R3 000. Once again the retirement village should have a levy stabilisation fund as a safeguard.
If you are single and are considering moving into a life right scheme, check what effect a change in your marital status will have on your right of occupation.
Lastly remember that financial soundness, position, security and social acceptance are the most important features to consider when you move into a retirement village.
If you make a sound decision, a retirement village can provide you with everything you require for a comfortable retirement.
For Advice
If you need advice you can contact the South African Council for the Aged at PO Box 2335, Cape Town, 8000. Or you can fax them at (021) 232168, or email them at [email protected]