Downsizing and moving – where to go?

“Research is the key to informed decision-making. It illuminates the path, revealing hidden insights and empowering us to make the best choices.”
– Albert Einstein

It can be hard to downsize when you don’t know where you want to go. Having a destination in mind can really help with decision making when you’re decluttering and downsizing, because you can have a clearer picture of what the end goal is going to look like.

While the cost of the options can wildly vary, it’s not just about the money. There are, of course, practical and social aspects to consider. Here are some pros and cons of each type of accommodation and some factors to consider for each, so you can determine what is the best for your situation.

Retirement villages 

Many of our clients have reported finding a sense of community and new lease on life moving to a retirement village.  Often the amenities are second-to-none and you don’t have to worry about home maintenance.  However, it’s important to understand the contract carefully before you sign up.

Facilities can be very impressive

While you generally have your own kitchen in your independent unit, in many cases you may not have to cook, as some villages have onsite cafes, restaurants or catering facilities.

Depending on the village, retirement villages can feel like living in a holiday resort, with most or all of the things you need under one roof, or have regular bus services to take residents shopping and to other local conveniences.

Health and social needs

People are also attracted by the support offered by retirement villages as their health declines, but we have moved people from retirement villages to supported living (aged care) facilities when they have needed a higher level of care.  So many retirement villages may not necessarily see their residents through changing health needs, despite some having some provision to do so.

There can be a range of groups and activities to foster a sense of belonging, but some people still experience acute feelings of loneliness in a retirement village.  The gorgeous ABC series Old people’s home for 4 year olds illustrated this quite sensitively.

Financial drawbacks of retirement villages

The biggest drawback for many is financial, with fairly substantial upfront costs, ongoing costs and exit fees, even when changing from independent living to supported living on the same premises.

It’s definitely worth reading the fine print. 

A 2017 investigation by Choice showed that retirement village contracts can be complex and confusing, making comparison between villages difficult.  If you need help to interpret contracts or investigate alternatives, the COTA branch in your state or territory may be able to provide housing advice. 

Could be the best option for some

However, for some, retirement villages may be the very best option, depending on their finances and needs.

One client, George*, we helped to downsize and move from the home he’d lived in for decades was depressed and not in great health.

However, he’d identified that he’d like to move to a village in the same suburb where he knew people.  His finances allowed this and he moved to a beautiful, north facing unit.  

George’s mood picked up after moving to the village – he’s very social from all accounts – and his health improved after he started eating regular meals in the company of others.

He’s glad he made the move, and the retirement village he moved to suited him perfectly.

Independent units 

Many downsizers are also opting for moving to an apartment or townhouse of their choosing in their retirement years.  Some people we’ve worked with have told us that they want to live with a range of people, not just other retirees, and that they want to protect their independence. 

Financial and practical benefits of private accommodation

With a privately owned apartment or similar, you retain your right to any capital gains and don’t pay any exit fees, but do pay stamp duty and other associated costs of ownership including strata fees.

You can also make modifications or renovations to suit your tastes or changing health needs, without necessarily needing to return the unit to its original state when you move out, unlike retirement villages.

Choose your amenity

One client, Mary*, had a degenerative health condition so she knew what lay ahead in her future.

She knew she wouldn’t be able to drive, so had chosen a particular apartment building next to the city centre so that she could walk to local cafes and catch buses if she needed to.

Mary was confident in her choice, and simply waited until a suitable apartment to become available then purchased and relocated to her new apartment.

Others may choose to move to a complex with a swimming pool, next to a golf course or near a beach or other scenic location.

Rightsizing rather than downsizing

Several of our clients have chosen to sell the family home and move into a large home or apartment which may not have fit the traditional definition of downsizing.  Sometimes the “downsized” home that they’re moving to is almost as large as their current home.

However, I do not begrudge people space in their retirement years to be able to do their hobbies, have guests stay, or just have a bit of extra breathing room.  Rather than feeling an obligation to simply swap their larger home for a smaller home,  “rightsizers” have looked at what they need and want to do, and chosen their future home and its amenities accordingly.

Supporting health needs in private accommodation

The ability of retirees to move to an apartment building or similar in their 70’s and 80’s is, in part, supported by the fact that the Australian Government funds in-home care through Home Care Packages.

This is where the government pays for part or all of the cost of necessary supports to enable people to age in place.  It can cover things like gardening and cleaning help, as well as the cost of in-home care.

Getting consistency of care

I notice that people receiving support under Home Care Packages can be frustrated with the consistency of care they receive, whether they live in a retirement village or private accommodation.

It certainly pays to do your research as the “good” providers provide a much more pleasant experience than the “not-so-good” providers.

Different MyAgedCare Home Care Package providers may:

  • Have lower turnover for case managers and support workers
  • Have different requirements for using their support staff, rather than external businesses 
  • Allow you to self-manage your Home Care Package where you can organise your own support workers through a website like Mable.

Speak to others about their experiences with their provider (and ask pointed questions to any providers you’re considering using).

Staying social

For some, it can be tricky staying social in a private residence.

Retirement villages or lifestyle villages really can be the answer for those whose world has shrunk and their home maintenance has become too much, providing inbuild opportunities for socialising and maintaining community. However, some apartment and townshouse complexes may have inbuilt opportunities for socialising also.

There is a trend in apartment design to create buildings with community in mind.  If you’re lucky, you might live in a complex which has:

  •  organised social barbecues;
  • regular movie nights in a common area;
  • a book club on offer;
  • a gym or swimming pool; and/or
  • other shared spaces such as a co-working space.

During the pandemic, it was also heartwarming to hear of people living in apartment buildings coming together to provide support for each other by delivering food and checking in on each other.

A mix of ages

Some retirees may prefer to live among like minded people of a similar age, without the likelihood of parties on a Saturday night or students playing video games next door at full volume into the night (it’s certainly worthwhile checking the soundproofing qualities of the residence you’re considering!).

Some retirees who downsize to apartment or townhouse complexes really value living among people of different ages and backgrounds, and prefer to live among families, younger people, as well as other retirees.

Lifestyle villages

Land lease lifestyle villages are a concept that originated in the United States but are gaining popularity in Australia, with 700 villages currently operating around Australia at the time of writing.

Financial advantages

A lifestyle village is a unique model where you purchase the home but rent the land, paying no exit fees and less onerous ongoing fees than traditional retirement villages.  You are still responsible for the maintenance of your home, but common areas are maintained by the village.

The CEO of Council for the Ageing ACT favours particular model of retirement accommodation as it allows people to free up the equity in their current home and still take advantage of any capital gains on the home they purchase.

Lifestyle villages suit different price points

While some over 50’s  lifestyle villages cater for a higher price point, others can have a holiday park / caravan park feel to them, so there’s a big range.

Under the current rules, you may also be eligible to receive Centrelink rent assistance on the land rental you pay.

The land rent is generally 3-5% of the value of the land, and the purchase price for a home in a land rent lifestyle village is usually well below the purchase price of a conventional home.

Cohousing

Cohousing presents itself as a compelling option for retirement accommodation in Australia and overseas. 

Cohousing is a community-oriented housing model where individuals or families live in private homes but share common spaces and facilities, fostering a sense of belonging, social interaction, and mutual support. 

Sort of like a retirement village for all age groups, run by the residents.

For retirees, cohousing offers the opportunity to age in a supportive and vibrant community, where they can maintain their independence while having access to a network of like-minded individuals.

The logistics of entering a cohousing development

Most cohousing developments are bought and sold on the private market, and are often on par or more expensive than similar dwellings in the area.  

However, there are always shared communal facilities, such as a common room, garden and/or workshop which add amenity to the dwelling.

There are mechanisms within cohousing developments to ensure a shared sense of community, such as optional weekly dinners, cars located in a different area so that residents cross paths with each other.

Overseas, there are also many examples of seniors-only cohousing communities,

Each community has its own culture and rules, but cohousing is a very attractive option for those who are looking to live independently but also in community.

Living with family or friends

Private arrangements with friends and family, such as buying a house together or constructing a granny flat can help to maintain close connections with loved ones while sharing the benefits and responsibilities of a shared living space, in a smaller scale setting.

Notable examples of public figures embracing this concept include Australian singer Kate Ceberano, who lives with her mother, and the late Fred Hollows, who planned to have his friends live with him in his spacious home. 

Advantages of co-living arrangements with friends or family include:

  • the potential for financial savings. 
  • the ability to afford a larger or more desirable property  
  • mutual support and companionship

Maintaining roles and boundaries

However, it is crucial to establish clear roles and boundaries within these arrangements. While living with family or close friends can be enriching, it can also present challenges if power dynamics and decision-making processes are not properly addressed. 

Open and honest communication, along with the establishment of clear agreements and expectations, can help mitigate potential conflicts and ensure a healthy and balanced living environment. It is essential to have conversations about privacy, personal space, financial contributions, and responsibilities to maintain harmony and respect among all parties involved.

Legal and tax enticements

There are legal and tax enticements for those considering this option.  

It can work in the advantage of both parties if you come to an arrangement like one party gifting the family home to the other party in exchange for a “granny flat interest”.

For more information on this or other arrangements, it may be worth contacting Centrelink’s Financial Information service who provide advice on such matters, even to people who are not receiving Centrelink payments

Conclusion

In conclusion, downsizing to retirement villages or alternative retirement accommodation is a significant decision that requires careful consideration of individual needs and preferences.

These are the main areas that differentiate the different residences of each kind:

  • Financial outlay (upfront and ongoing);
  • Who you want to live with;
  • How much space you want;
  • Which areas you want to live in; and
  •  Which amenities you’d like to have in your new residence; and
  • Whether you would like an in-built sense of community in your new residence

I’ve seen people get so overwhelmed by the process of downsizing and moving that they only end up visiting a couple of retirement villages, and then settle on the first one that offers them a place.  If you can share the load by exploring options with a trusted friend or family member to investigate a range of options, you’re more likely to get something you’re happy with for the long term.

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