When should I retire?
The average retirement age is 55.4 years, although most people aged 45+ expect to retire around 65.
However, deciding when to retire is entirely personal and depends on your financial circumstances and preference for continuing to work.
Are you satisfied with your working life and what you’ve achieved? Are you happy to walk away from it? Do you have the superannuation to retire comfortably?
If you’ll be relying mainly on the Age Pension, you’ll have to wait until you turn 67, which is the qualifying age to access the Age Pension.
Why should I downsize?
Again, the decision to move from your home is a personal one. But there are good reasons for choosing to downsize when you retire. The main one is that your old home may not serve your current needs. Upkeep and maintenance might dominate your free time and the house might not be well suited to your lifestyle.
You might also find that you’re feeling socially isolated, which can happen in a big house, especially if family visits are not regular and you don’t have a strong connection with your neighbours.
Downsizing can be helpful for physical and mental health and wellbeing reasons. Maintaining a home can often be a physical strain and time consuming, meaning less time to attend to your psychological and physical needs.
Why should I consider retirement living?
Retirement living is an excellent option for a range of reasons, including:
- Retirement villages are purpose built for older Australians
- They are safe and secure places where your needs are supported as you age
- It’s important to connect with people and stay active as you get older and retirement villages offer plenty of recreational and social opportunities
- In most retirement villages, home maintenance is taken care of, reducing the burden on you.
Are there other options?
If you’re ready to downsize and want to continue to live independently in a retirement village but need a bit of extra hands on help, you could consider an apartment with services. Supported or assisted living can also offer similar amenities to a retirement village but with a higher level of care.
Another alternative is a land lease community. It involves leasing the land on which you situate your home – often a caravan, but sometimes a prefabricated cottage or unit.
Alternatively, you could choose to live your life on an endless road trip. Becoming a grey nomad has many benefits, allowing you to move from place to place with the seasons, taking a comfortable ‘home’ with you in the form of a campervan or caravan. However, this option is often quite pricey.
Is retirement living really for me?
Deciding if retirement living is for you is a decision only you can make. However, it is worth researching and visiting retirement villages to see what different villages can be like. Talking with current residents can help clarify whether retirement living is for you.
During these conversations, you might find that what you imagined retirement villages to be is pleasantly incorrect. Retirement living is no longer just cookie-cutter units in suburbia. Australia has many retirement villages in beautiful surroundings, in the countryside or by the sea. Additionally, vertical living is becoming more popular as retirees look for options that keep them close to bustling urban centres and the attractions that go with them.
What are the costs associated with a retirement village?
Contracts for retirement living can be complex, so getting professional advice from your lawyer or accountant is a good idea.
The three main costs you should be aware of are:
- Entry payment – this payment secures your right to your retirement village residence. It is usually less than the average equivalent house price in the same suburb, which can be good news for your cash flow.
- Monthly service fee – this varies per village and is used to maintain the retirement village facilities. It may also cover things like council rates, utilities and insurance.
- Exit fee – this payment is made when the time comes to move on from the retirement village. It is usually a percentage of the entry payment or the sale price. It will be part of your contract and could be a considerable sum, so be sure you have a clear picture of what it might entail. Some providers have this as an upfront payment, allowing residents one less worry.
Aveo has simplified retirement village contracts wherever they can, with three contract types now available: Now, Later and Bond.
How do I begin?
There’s much to consider as you start your retirement journey. Begin with online research and arrange visits to places you want to learn more about. It’s a good idea to get your grown up kids in on the discussion sooner rather than later. They can bring fresh eyes to different issues and help you clarify exactly what you want from your retirement.