By ANTHONY KEANE, TIM McINTYRE on 1 October 2018
IT’S one of the most confusing challenges for elderly Australians, prompting many to leave it in the too-hard basket.
PLANNING and paying for retirement living is one of the most confusing challenges for seniors, prompting many to leave it in the too-hard basket.
Whether it’s retirement villages, aged care facilities or the booming home care sector, three quarters of Australians aged over 50 have not taken any steps towards getting what they want, according to McCrindle research.
It found that 40 per cent don’t think they will have enough money to pay for their aged care, but less than one in 10 have a savings plan.
“We think about retirement and holidays, but not so much about aged care,” said social researcher Mark McCrindle.
“People are living longer, working longer, it gives them a reason to worry about it all later. Then suddenly there’s a health issue or sudden event or illness and the decision becomes an urgent one.”
Mr McCrindle said almost nine out of 10 people wanted to live out their days in their own home, something the government also wanted because it was cheaper than institutional care. However, almost half of older Australians have not discussed their future care with anyone.
CareAbout CEO Kylie Magrath said families needed to talk about the options and packages available.
“Making the wrong decision can cost consumers thousands of dollars, with some providers taking 50 per cent of the government packages in fees, with the result being financial pain and inferior service for the consumer,” she said.
Ms Magrath said common traps included people being unaware of government support to stay at home, being unaware of schemes to self-fund aged care, and being stuck on waiting lists because they did not get in early.
CareAbout is one of a range of new advice, advocacy and comparison services starting up for ageing Australians. The Federal Government’s myagedcare.gov.au site has long been a source of education and tools for finding services such as home care packages and aged care facilities.
Retirement villages are a lifestyle decision rather than an aged care home move prompted by a health crisis, but Comparevillages.com.au managing director Jessica Kinnear said there was a common misconception that they were the same thing.
Retirement villages were often people’s “last independent move and there’s a lot of planning and thought that goes into it”, she said.
But just like aged care, there is confusion around fees and getting expert advice is a good idea.
“The fee that causes the most confusion and negative perception is the exit fee, or deferred management fee. That can be quite large,” Miss Kinnear said.
The three key fees paid for retirement villages are:
- ENTRY fees, typically the purchase price of a unit in a village;
- ONGOING fees for day-to-day running costs, usually charged at no profit for the operator;
- EXIT fees, often a percentage of the upfront purchase price or a portion of the resale price.
“Consumer complaints largely stem from not being properly informed of the financial implications,” Miss Kinnear said.