Lana Visser-Galant | 16 May 2025
Lana Visser-Galant is an associate financial planner at Fiscal Private Client Services. She has a B.Com in Quantitative Management and a postgraduate diploma in financial planning.
Choosing the right retirement home is a crucial decision that involves careful consideration of various factors to ensure a comfortable and fulfilling lifestyle. Whether you are looking at the ownership structure, healthcare facilities, or the timing of your move, each aspect plays a significant role in making the best choice for your retirement years. Here are some of the key factors, both financial and non-financial, to consider when purchasing a retirement home.
When purchasing a unit in a retirement village, the ownership or purchasing structure is a big consideration, each with its own pros and cons. Some retirement villages still offer sectional titles where you can purchase a unit that you own and can sell on your terms. You are then responsible for the various costs relating to rates and maintenance, etc.
The other option is to purchase a life right. This means that you do not own the unit, but rather you own the right to live in it until you, or you and your spouse, pass away. This is sometimes a more affordable option upfront, however, it is important to understand the life right agreement and what you or your heirs are entitled to when the unit is sold. Some contracts may give the purchaser a percentage of the profit on the unit, others may pay out a percentage of the selling price and others may only pay out the original purchase price. This structure is important to understand before acquiring a unit.
Moving is a taxing process for many and hopefully something you don’t need to do again once you have settled into a retirement village. It is important to explore the facilities that the retirement village offers to establish if there is assisted living or a frail care unit in the same village. This also helps if you are a couple, should a situation arise where one spouse requires special care while the other may remain in their original unit. Frail care in the same village helps you stay close to each other.
It is important to consider when would be a suitable time to move to a retirement village unit. Not only do some retirement villages have minimum and maximum age limits when purchasing a unit, but moving takes energy and focus, which may become more difficult the older you get.
While it is not easy to move out of your home, which for some is where many family memories have been made, it is also not easy to make a change at an age at which it is more taxing mentally and emotionally. Finding the right balance for this is important for you and your family.
Each person has their own set of requirements and considerations which are important to them when purchasing a home. For some, it is the need to take your pets along, which some retirement villages do not allow. For others, it may be a sense of community and the activities or social clubs which are available within the village. Some people enjoy the security of a lock up and go home and some enjoy the convenience of having their meals made each day. Make your own list of what is important to you and ensure that the retirement home you choose ticks as many boxes as possible.
In conclusion, purchasing a unit in a retirement village requires thorough evaluation of your personal needs and preferences, but also your financial planning. Understanding the pros and cons of life right versus sectional title ownership, assessing the availability of frail care and assisted living facilities, and determining the best timing for your move are all essential steps in making an informed decision and each factor has an impact on your financial situation. It is also important to discuss your options with your financial planner once all of the information is available.
