Retirement is a controversial issue – for some – a long awaited time to re-discover hobbies and favorite activities; for others – a life change that is not taken lightly. In any case your life after retirement will be different whether you like it or not. More often than not, however, people that fail to address important retirement issues turn out to be disappointed and spend more than they can afford.
When it comes to your retirement, you want to do the planning and take the decisions about where and how you will spend your last days while you are healthy and independent. There are two types of decisions you need to make:
- Life-style decisions – most importantly, where will you live?
- Financial decisions – will your post-retirement income be sufficient to support your lifestyle choices?
Before taking any steps, it is quite wise to consult financial and legal professionals especially if you are planning to make lifestyle and financial changes.
A common example of a major lifestyle change that many people make after retirement is moving into a retirement village or a nursing home.
There are a few issues to consider before taking such a decision and they can affect both your financial situation and lifestyle.
For example, there are high costs involved in moving in or out of a retirement village in addition to the cost of everyday living there. All of the costs involved need to be stated in the legal contract that you sign with the retirement village. It might turn out that after a few months you realize that this is not the right place for you because of the lack of privacy and the unavailability of any social entertainment. If you decide to leave the retirement village you might end up losing a huge amount of money that you cannot afford. The advice of a legal professional will save you the trouble and put red alert on points of your agreement that are financially risky.
There is a substantial difference between buying into a retirement village and buying a residential property. If you think that you have been over many property agreements and have experience with those, watch out here!
You risk to become bound by a contract that you don’t understand, have underestimated and might leave you penniless. That’s why you need to consult a lawyer that has experience with retirement and especially retirement villages.
The biggest issue that you must understand before starting your life in a retirement village is that you don’t buy or own the property that you will be living in. The contract is also not quite the “rent agreement” you have ever signed. If you are unaware of the specifics of the retirement village property agreement you will end up losing money. Not understanding your rights may turn into a financial catastrophe when you decide that you want changes in your property or you breach the agreement.
A lawyer can easily explain you the rules and regulations of a retirement village and make sure your desires, interests and finances are kept intact throughout your stay and leave.
There are three main topics that we advice you to discuss with your lawyer in order to avoid unexpected costs:
- The costs of moving in and out – you might be aware that you pay capital sum when you enter the retirement village but where does this money go? Do you know how and for what it will be spend? Even if capital entry sum is understood, the deductions and fees that you need to pay upon leave are a bit more complicated.
- The cost of living there – are you going to be able to afford living in the village? Each retirement village charges different fees for varying features and you must not rely on assumptions when making your choice. Your lawyer can point out unexpected expenses that might arise from your personal preferences or the choice of retirement village
A common financial issue arises when occupants cannot pay the fees associated with living in the retirement village. If for any reason, you financial situation changes you might find yourself stuck with no way out. In many cases you will be forced to make choices that you won’t like. However, if you discuss the possibility of such an instance with your lawyers previously to entering into a retirement village you can have other options and save yourself the disappointment and regret, as well as remain financially stable. Your lawyer can review the retirement village agreement and arrange contingency plan for you such as mortgage and deferred payments.
In the end, you want to have a comfortable retirement without financial headaches and unpleasant surprises. Consulting your lawyer before going to the retirement village of your choice can save you unexpected costs. It is the one thing that makes the difference between losing thousands of dollars when leaving a village or having different payment options and facing financial challenges or inability to live the life you want.
At Aquarius Lawyers we understand that people worry about the cost of engaging a lawyer that is why we have set pricing for our legal work. We have developed “Peace of Legal Packages” – to allow you to choice the level of protection for your family dependant on your circumstances. Our packages provide varying levels of protection, suited to your unique needs. You can book your own appointment on the left hand side.