- 3 mins
As people approach their golden years, they often contemplate their living arrangements and care options. Three popular choices for seniors are lifestyle villages, retirement villages, and aged care facilities. While lifestyle villages and retirement villages may seem quite similar at first glance, they cater to different demographics and preferences. Aged care facilities, on the other hand, are distinctly different in terms of cost structures and care services. In this article, we will explore the key differences between these three options.
Lifestyle Villages and Retirement Villages
Lifestyle villages and retirement villages are both independent living options that don’t receive any government support. They share several similarities, making it easy to confuse the two. However, there are some distinctions that set them apart:
Target Demographics:
Lifestyle Villages: Lifestyle villages are primarily marketed to a younger demographic of retirees who are still active and independent. These communities often attract individuals who are looking to downsize, enjoy a vibrant social life, and take advantage of a range of amenities and activities.
Retirement Villages: Retirement villages typically cater to older retirees who may require some assistance with daily tasks but are not in need of extensive care. They offer a sense of community, security, and a range of facilities, making them suitable for those looking to maintain their independence.
Facilities and Amenities:
Lifestyle Villages: These communities often provide a wide array of amenities, including fitness centers, swimming pools, tennis courts, and social clubs. The emphasis is on an active and engaging lifestyle.
Retirement Villages: While retirement villages also offer amenities, they may not be as extensive as those in lifestyle villages. Common facilities include communal lounges, gardens, and occasionally healthcare services.
Ownership Structure:
Both lifestyle villages and retirement villages typically operate on a lease-for-life arrangement. This means residents do not own the property but lease it for the remainder of their lives. It is common to pay an initial amount similar to if you were buying the unit, plus ongoing costs.
Exit Fees:
A crucial consideration for lease-for-life arrangements is the exit fees, often referred to as ‘Deferred Management Fees. These fees can vary significantly and should be thoroughly understood before entering into an agreement.
Aged Care Facilities
Aged care facilities are highly regulated and receive government support. They have a distinct cost structure compared to lifestyle and retirement villages:
Aged care facilities are designed to provide specialized care for seniors who require assistance with daily activities, have complex medical needs, or suffer from cognitive impairments like dementia. These facilities offer various levels of care, including residential aged care and respite care.
Aged care facilities are generally Government subsidised where the fees and charges are heavily regulated.
Residents are required to pay an Accommodation Payment plus Ongoing care fees. The Accommodation Payment may be paid as a lump sum (often referred to as a Refundable Accommodation Deposit RAD).
The financial aspects of aged care can be intricate, involving means testing, government subsidies, and fees. Seeking professional advice is advisable when considering aged care for a loved one.
Summary
In summary, lifestyle villages and retirement villages offer appealing options for active and independent retirees, with lifestyle villages targeting a younger demographic and offering more extensive amenities. Both operate on lease-for-life arrangements with associated exit fees. Aged care facilities, on the other hand, are designed to provide specialized care and have a different cost structure, with options like RAD and accommodation payments.
Choosing the right option depends on individual needs, preferences, and financial circumstances. It's crucial to carefully assess these factors and seek expert advice when making decisions about senior living arrangements to ensure the best possible quality of life in the golden years.
This blog contains general and factual information and does not take into account anyone's individual objectives, financial situation, needs or tax circumstances. We strongly recommend you contact one of our Advisers if you would like personal advice.
Redpoint Investment Holdings Pty Ltd (trading as CY Financial Advice), is a corporate authorised representative (No. 378099) of CY Financial Services (AFSL No. 509648)