Financial gurus say that by the age of 55 or 60 maximum, individuals should at least have made their choice of retirement lifestyle, and better still with some investment paid toward it, even if it means entering this phase much later.
In looking at demand and supply, the FNB Property Barometer of October 2011 reflects a trend showing those over the age of 55 years to now represent the fastest growing age cohort in SA. FNB statistics show that individuals selling or buying for “life stage” reasons have increased sharply from 12% in 2008 to 23% in 2011, reflecting the inability of many seniors to continue living in old family homes.
While this maybe for financial or purely practical reasons, for a retirement lifestyle to be optimal it should provide physical, financial and healthcare security. The wisest move to make early is to plan how to get by on a retirement income that will at best grow at the rate of inflation, and secure the ideal long term home to match finances.
With the emphasis on security, a wide number of available choices range from secure private estates, to apartment accommodation, shared homes or other formal retirement facilities. Considering that long waiting lists at retirement facilities can take up to 10 years or more to produce results, and where there is no prospect of extended living with family, early downscaling makes for the wisest choice. In addition, would-be retirees should keep abreast of the different types of retirement facilities, as well as varying financial options and complex contracts, such as the Life Right option, most commonly associated with ownership at retirement facilities.
One of many concerns to seniors in the process of downscaling is the high cost of newly built retirement developments as opposed to existing homes and apartments, yet industry professionals say that because retirement villages enjoy economy of scale, prices remain competitive. Also, the FNB Property Barometer shows cost of home maintenance to be running about 1,5% above total Consumer Price Index (CPI) at 6,8%. If viewed carefully this provides an incentive to look at alternatives like the retirement village where shared services are more competitively priced. As a result, property developers are seen to be taking advantage of the emergence of a retirement segment within the residential property market, believing that demand for this product will exceed supply over the next 10 years.
Although monthly levies at retirement villages can be steep for those without a regular income after making the initial purchase, it provides a wide range of services including healthcare, gymnasiums, clubhouse facilities, catering, and outdoor entertainment facilities.
Realising the abundance of benefits derived from secure living with a similar peer group, may translate into a completely different lifestyle to living in a freestanding suburban home with no services other than municipal readily at hand. And the ultimate comfort this brings to both individuals and their concerned families is not to be underestimated.