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IS IT A GOOD IDEA TO MOVE INTO A RETIREMENT VILLAGE?

Is it a good idea to move into a retirement village?

Jason Appel wrote on Moneyweb on 21 Oct 2022: “Should I move into a retirement village? The factors to consider, and what to know about the ownership deals you will be faced with.” (Jason Appel is a financial planner at Chartered Wealth Solutions.)

“One of the most difficult choices to make in life’s journey is whether or not to move into a retirement village, and on what terms.

Weighing up the pros and cons is hugely personal, and circumstances vary from person to person. You might, for example, be a single older person with no children, or married and with adult children who have left the nest, or married and now looking after grandchildren, or still supporting adult children.

Whatever the case, many people get to a point where they’re quietly thinking about whether or not they should or could move into a retirement village. And one of the most important things to wrap your head around, if you do make the move, is what sort of property contract you should enter into.

There are three possibilities offered in retirement villages:

  1. life rights,
  2. freehold and
  3. sectional title.

Life rights essentially mean that once you pass away and your unit is resold, your estate gets back the amount you paid for the property, minus some costs, but not any profit made on the sale. However, it does come with other benefits; which I will explain later in the article.

Most retirement complexes no longer offer outright ownership. Internationally, it’s mostly life rights, but we’re still getting used to it in South Africa.

Ownership versus life rights

I did an exercise for my parents comparing ownership to life rights, and was surprised by what I found.

You can generally get a life rights unit at a lower cost than outright ownership. You do pay levies, but these cover all external maintenance, security, perhaps a meal a day, and the fact that there’s a maintenance team on the property to respond quickly to any problems. Levies also cover the care of the garden, a swimming pool if there is one, and all communal areas.

I looked at:

Life right

Outright purchase

Cost of property R2 000 000 R2 500 000
Transfer cost and taxes R0 R135 000
Rates and taxes R0 R2 000-R3 000pm (estimate)
Levy R4 000 R4 500

Life rights costs R500 000 less in this example; there are no transfer costs and there are no ongoing rates and taxes every month.

With an outright purchase, if you add the rates and taxes to the levies, you will be paying R6 500 to R7 500pm as opposed to R4 000pm.

The saving of R500 000 on capital outlay should, of course, be invested.

If it was placed in a diversified investment strategy (targeting a return of 10% per annum), it could create an additional R2 000 in income per month while still experiencing growth. If this extra income is not needed on a monthly basis, it will just compound in the investment portfolio.

The saving on monthly levies/rates and taxes, would of course also result in needing less monthly income out of your current investments. A reduction in expense of R3 000pm would add five to six years on to the longevity of your assets. The best way to improve the longevity of a retired person’s plan is to reduce their expenses – a little goes a long way.

If you go for life rights, you forgo the capital appreciation in the property’s value. This growth is hard to estimate, as residential property valuations vary quite drastically. I would suggest that people consult their financial planners before making the decision.

One of the main benefits of life rights is that if you live to a really old age, and you run out of money, you will not lose your home.

What happens is that the cost of your continued care is deducted from the capital amount you paid upfront. For example, if you paid R1.5 million for a flat, and the village cares for you for an extra few years after your money runs out, after selling the unit your estate will get the R1.5 million minus the care costs. (There may well be other deductions too, such as a sales commission and/or an amount to refurbish the unit for the next purchaser.)

People sometimes avoid life rights because the feeling is that their heirs will lose out on the initial investment. However, I would rather know my parents were being well cared for and that there is no risk of having to put in extra money down the line. It really helps me knowing that’s taken care of.

From a pure numbers point of view, it’s better to invest in a retirement village earlier rather than later.

 

A person buying in at 50 or 72 gets the same value over time, so the younger person will ultimately get a better deal. However, most people are not ready to even talk about it in their 50s.

An added consideration, though, is that most places have a waiting list. You’ll pay a small amount to be placed on it, but if you get the call before you’re ready, you can decline and you’ll be pushed down a spot on the list. But some places have a maximum age restriction while some will say you’re restricted to a smaller unit if you’re at an advanced age.

So it is better to move in before your age becomes a problem, but only you will know at what point you are ready.

The three contracts explained

FREEHOLD

As Rob Jones, managing director of Shire Retirement Properties, explains: “You own the land and building, it’s your responsibility, you pay rates and taxes and there is a registered title deed in your name. You can leave it to your heirs and any gains in value would be for you. There may be some exit levy to pay to the complex, but it differs from place to place.”

SECTIONAL TITLE

With this option, says Jones: “You own a portion of the building, say an apartment or townhouse. You will have a title deed and you can leave it to your estate. You are responsible for internal maintenance, while the body corporate takes responsibility for outside maintenance as a general rule. You pay for that in your levies of course. There may be some exit levy to pay to the complex, but it differs from place to place.”

LIFE RIGHTS

“Essentially it’s a lease for the rest of your life,” says Jones. “You’re paying upfront for the occupation of the building for you and your spouse for the remainder of your lives.”

Details differ from village to village, but usually it means that if you pass away and your unit is sold, your estate will get back the amount you paid, but not any portion of the increase in value (gain).

“In some estates a share of the profit will be paid to your estate, in others you will get back a bit less than you originally paid,” says Jones.

The levies cover all external maintenance, rates and taxes and common service costs such as security and common garden maintenance. Additional services are often included such as meals, cleaning and laundry.

Life rights can be a bit cheaper as a capital investment, says Jones, because the developer knows he can make profit over and over again, as he resells the unit over the years. “In essence, the life rights village owner wants to look after the building because he wants to resell it.”

To read the rest of the article on Moneyweb’s website, click here.

 

 

Shire offers development consulting to Property Developers in the planning and the execution of all key elements of new retirement villages. To contact us, click here.

A NEW PODCAST SERIES: RED WINE & BLUE JEANS

A new podcast series: Red Wine & Blue Jeans

Founded, sponsored and hosted by Rob Jones from Shire Retirement Properties and Lynda Smith from Refirement Network, Red Wine & Blue Jeans, is a 6-part series of podcasts that explores how to live the second half of life in the best way possible. Listen to the stories of people who, like red wine and blue jeans, just get better as they age.

Episode 1

To listen to a short conversation between Rob and Lynda about why they wanted to do this series, click here.

Episode 2

Executive Director, Board member and volunteer: Karen Borochowitz from Dementia SA, discusses her journey with her mother who was diagnosed in the early 90’s with dementia at the age of 62. She passed away at 83 after living with dementia for 21 years, a time which had a profound impact on Karen’s life. To listen to the conversation with Karen, click here.

Episode 3

Arthur Case has had a variety of careers. Firstly he worked as a human resources executive. He became a CEO in the pharmaceutical industry and then worked as a consultant. He eventually moved into the retirement industry which he left at the age of 66. Arthur has reinvented himself as an entrepreneur and has more time now to pursue his hobbies, one of them is to explore the world on a motorbike. Listen to Arthur’s story over here.

Episode 4

Dr Jim Leatt had a prestigious career in academia. His fields of interests were religious studies, industrial relations and applied ethics. In 1985 he was Deputy Vice Chancellor and Vice Principle at UCT and in the early 90’s was appointed Vice Chancellor at the University of Natal. In 2008 he was asked to help turn around the University of Venda. In 2021 he published his book: ‘Conjectures – Living With Questions’, which is a written legacy to his lifelong exploration of the meaning of life. Click here to listen to Jim.

Episode 5

Jennifer Webster was diagnosed with Stargardts disease at the age of 10, a juvenile onset form of Macular Degeneration. She managed to complete mainstream schooling and has a BA Honours from Rhodes University. Married with grown up children she now spends her time helping to find solutions and encouraging others along the journey of vision loss.

Listen to Jennifer over here.

Episode 6

Simone Le Hane has come a long way from growing up under apartheid. She attributes her strength and determination to get on in life, to the older women in her family who were wise and feisty roll models. Simone studied at UCT which was the start of her lifelong learning. Her first job was at Shell and she was eventually recruited by the Department of Finance under the new democratic government and in 2000 was instrumental in the creation of the modern national treasury. She has had an illustrious career in the corporate and government sector. Now at 67, she is reinventing the next chapter of her life. Click here to listen to Simone.

 

THE CLUBHOUSE IN A LIFESTYLE AND RETIREMENT VILLAGE

The clubhouse in a lifestyle and retirement village

As todays’ retiree’s lifestyle preferences continue to change, retirement offerings will have to adapt. The major difference between the former traditional retirement properties and those being developed today boils down to these lifestyle changes.

One of many amenities that constitute a successful lifestyle and retirement village, is a clubhouse. The clubhouse is not a luxury, but it summarises how a happy and healthy lifestyle should be.

A clubhouse is, in fact, the hub of all recreational activities under one roof. It is a place where each member of the family can find their space. It usually consists of a library, restaurant, chapel, gym, conference room and possibly a heated swimming pool and a hair & beauty salon. Apart from this, in many of the modern designs, there are outdoor courts. A one-roof solution for all recreation and fitness activities of a community.

Clubhouses are a great way to socialise. Since these clubhouses provide a common area to gather and engage in activities, it often brings people together. Moreover, it makes socialising pretty much easier without even going out of the gates of the community where you live.

For fitness enthusiasts, clubhouses are a great deal. This is where the gyms usually fit in. Most lifestyle and retirement villages come with a world-class gymnasium. With modern and good pieces of equipment, it helps in remaining fit and healthy.

Yet another advantage of having a spacious clubhouse is that it contains event holding spaces. Usually, there will be large open areas in a clubhouse which is used for gatherings and various social events.

For residents who enjoy reading, a library eliminates the need to go out of the estate in search of public reading spaces.

A clubhouse in a retirement village is a place which fosters community living. It brings people out of their homes and enables them to form part of a greater community.

These days people are more selective when it comes to buying a retirement home. Buyers are on the lookout for many factors and of course all of these factors together contribute to the value of their purchase. One such factor is the availability of a clubhouse. It has turned from a luxury to a necessity and thus an elementary part of retirement village living.

Shire Retirement Properties (Pty) Ltd (Shire) is based in the Western Cape Province of South Africa and specialises in the provision of a range of services focused exclusively on the retirement industry. To view the villages that Shire is involved with, click here.

WORKING FROM HOME COULD IMPACT YOUR RETIREMENT PLAN

Working from home could impact your retirement plan

WellCents wrote:

“If you’re working from home during the pandemic, and the “new normal” becomes permanent, you should contemplate how this change could affect your retirement strategy.

First, it’s important to consider the difference between working from home (WFH) and working from anywhere (WFA). In a WFH arrangement, employers may still expect workers to come to the office from time to time. But in a WFA arrangement, employees have the flexibility to live and work from wherever they choose.

A WFA scenario offers maximum freedom and may allow a worker to relocate to another part of the country (or even outside of it altogether) to take advantage of a lower cost of living.

WFA is not nearly as common as WFH. In 2019, few companies based in the U.S. offered WFA arrangements, with about 95% of remote employees required to work from a set location. However, Household Pulse Survey data collected by the U.S. Census Bureau shows that more than 35% of U.S. households have engaged in more frequent telework than prior to the COVID-19 crisis.

Remote Work Can Be a Retirement Game-Changer 

Working anywhere other than the office may reap significant cost savings for employees in a variety of areas, including:

  • Cheaper housing
  • Lower transportation costs
  • Fewer socializing and entertaining expenses
  • Reduced purchases and upkeep for work attire
  • Greater ability to handle child and adult caregiving duties

Retire sooner. With a substantial drop in housing or caregiving costs, you may find that you can retire sooner than you’d hoped. Taking advantage of a lower cost of living can bend the retirement timeline significantly. You may not have to move very far for this to make a big difference, particularly if your job requires you to reside in a major city, where the cost of just about everything is often much more expensive.

Work Longer. On the other hand, WFH may give some the flexibility and desire to continue working past retirement age. For example, if an employee has health or mobility limitations, working from home may make it easier to stay in the workforce longer. Additionally, employees nearing retirement may have parents who require assistance, and having the kind of flexibility that WFH or WFA affords them may allow them to fulfill their family obligations while remaining on the job.

The pandemic has created significant hardships and burdens for many families. The possibilities for continuing remote work may constitute a bright spot in the darkness.”

If sitting around just isn’t your thing, then retirement is the perfect time to live out the dreams you may have put on hold. Simply filling empty hours with pointless recreation may feel like the opposite of freedom for many of the 72 million U.S. baby boomers, who have worked their entire lives. Launching your own business may be your ideal “retirement lifestyle.” Here are some good reasons to start a business in retirement.

 

 

HEADING FOR RETIREMENT?

Heading for retirement?

Heading for retirement?

A psychiatrist’s advice for maintaining wellbeing

Netcare Akeso – Media Release

Taking an active interest in maintaining general health and wellbeing in one’s golden years should include paying close attention to the connection between mental and physical health, memory and social connectedness.

This is according to Dr Ryan Fuller, a psychiatrist specialising in geriatric mental health – or mental health of the aged – and practising at the Memory Care units at Netcare Akeso Alberton and Netcare Akeso Parktown, who says that while retirement is intended to be a period of relaxation, this major life change can in fact be an enormous stressor, possibly triggering a decline in one’s mental as well as physical health.

“When people retire they often experience what we call existential angst, feeling a sense of dread brought on by what they may view as a loss of identity. It is also unfortunately the case that few people plan adequately for retirement, which contributes towards stress levels,” Dr Fuller says.

“We see a significant increase in the mortality rate amongst retired men in particular, who tend to experience weakened immune systems and whose physical health may deteriorate when they stop working. It is often recommended that men should not retire fully for this reason.”

Dr Fuller notes that physical factors such as chronic diseases including high blood pressure or diabetes can also contribute towards mental health concerns by placing individuals at risk of vascular dementia, brought on by damage to the brain’s blood vessels caused by a stroke, for example.

“The best thing you can do for yourself in your golden years is to commit to making consistent daily efforts in maintaining a lifestyle which supports overall health and wellbeing,” he says.

What’s good for the heart is good for the brain

Fuller’s advice is to keep it simple and stick to the basics of good health.

“What is good for the heart is also good for the brain, so if you are eating healthily, being physically active, getting enough sleep, limiting alcohol intake and avoiding smoking, you are working from a good baseline. Simply going for a 20 minute walk each day has been shown to benefit every aspect of your health, provided you are walking somewhere safe.

“When it comes to nutrition, eating a Mediterranean diet that includes plenty of fresh fruit and vegetables, healthy fats, whole grains and very little red meat is by far the most sensible way to look after your heart. Regular hydration is essential and is often a problem area amongst elderly individuals, who may have mobility issues and therefore avoid drinking to limit visits to the bathroom. This is not a good idea, as it is vital to drink at least 1.5L to 2L of hydrating fluid daily. This also means avoiding too much caffeine as this is a diuretic.

Stay busy, keep learning and be social

For boosting the mind, Dr Fuller advises keeping a hand written diary, as the process of writing is good for memory. “Engaging in activities such as knitting or needlework, adult colouring books, listening to your favourite music, doing puzzles, sudoku and word searches are all good for cognition. It is very important to try new things such as learning a language or skill to continue cognitive development,” he says.

“Keep things short and sweet – you need spend no more than 15 to 20 minutes on such tasks. It is important that you enjoy what you are doing and that you don’t find it stressful. Playing Bridge is one of the best things you can do for your mind as this includes a social element as well. Getting out into the world and socialising in person is an important form of cognitive stimulation and highly beneficial for mental health.

“For those who enjoy short bursts of digital interaction there are some useful apps available, such as Lumosity for cognitive exercise and Calm for helping with stress and sleeping, though too much screen time is not advisable, as an excess of blue light can cause insomnia.

“On that note, it is important to get enough uninterrupted sleep without the use of sleeping pills, as long term use of this type of medication is a risk factor for dementia. Exercise and cognitive activity during the day are important for becoming naturally tired and ready to sleep at night.

“Freud said that to be happy, humans need someone to love, to be loved and something to do. Jung took this one step further by saying that what we do must be meaningful – whether this is in a spiritual or personal sense, it must generate some kind of personal satisfaction.

“Paying attention to mental health should be a part of daily life, no matter your age, and it is certainly an important aspect of ageing well. Just as you practice habits like flossing your teeth, you should do daily mental exercises. And just as you would visit your GP for any physical concerns, it is important to be proactive and reach out for mental help when going through a stressful time or a major life change, such as retirement,” concludes Dr Fuller.

 

TYPES OF PROPERTY OWNERSHIP IN RETIREMENT

Types of property ownership in retirement

IOL’s Palesa Tlholoe, wrote the following article in the April 2022 edition of Money Mag. Palesa wrote:

“Retirement villages are governed by the Housing Development Scheme for Retired Persons Act, which imposes certain conditions on developers and residents. There are four types of ownership, with some developments based on one type and others offering a choice between two or more types:

  1. Freehold title

This is essentially the same as owning a freestanding home, with the same rights, expenses and responsibilities, except that, because the home is within a gated community setting, there will be a monthly levy to cover services such as maintenance of the common areas, security, catering and healthcare. Some developments will retain a certain portion of the profits on resale, as a way of subsidising the levies owners pay.

  1. Sectional title

This is similar to sectional title in a non-retirement development, where rates, insurance and maintenance of the complex is funded by a monthly levy. The scheme will have a board of trustees and a body corporate, through which all owners have a say in decision-making. As with a freehold title scheme, the developer carries no responsibility for the ongoing maintenance and cost management aspects once the development has been built; the onus falls on the owners or residents to do so.

  1. Life right

You buy the right to live in a dwelling for your life and that of your spouse – you don’t actually own physical property. There are no legal costs, transfer duties or other taxes payable. You may dispose of your life right or it will be sold on your death, in which case you or your estate will, depending on the contract, receive the purchase price plus a percentage (say, 30%) of the profit. When a life right transfers to a spouse on the death of the first[1]dying spouse, it does not form part of the first[1]dying spouse’s estate. Residents, who pay a monthly levy to cover running costs, enjoy similar privileges to those in sectional title homes; the developer, however, remains the sole owner and is responsible for the upkeep of the village.

  1. Share block.

Under this structure, which is now less common, the complex is registered in the name of a shareblock company, and each unit is allotted a certain number of shares in the company. You purchase shares, which give you the right to use a flat, cottage or townhouse and the complex’s facilities, but you do not own your dwelling. There is typically an AGM at which shareholders elect directors to the board. Directors meet throughout the year to discuss how the property is to be managed. Shareholders pay levies that cover operating costs, including maintenance and insurance. If you decide to sell, you need to sell your shares in the property and cede your rights to occupy the unit.”

To continue reading the rest of the article, click here.

Ever wondered when is the right time to move into a retirement village? Click here to find out.

When is the right time to move into a retirement village?

When is the right time to move into a retirement village?

Money Mag’s Martin Hesse wrote in the April 2022 issue: “WHEN’S THE RIGHT TIME TO MOVE INTO A RETIREMENT VILLAGE?”

“Moving into a retirement community is a big decision for retirees and their families, and there are many considerations to take into account.

Retirement villages offer the advantages of independent living in your own space, without the time-consuming maintenance of your own home and there is anecdotal evidence that such a lifestyle even boosts your life expectancy, thanks to the amenities they offer.

But how do you know the time is right to make such a move? And once this decision has been made, how do you choose the accommodation best for you? This is a very subjective decision and one that is often taken when people’s health starts to fail. The vast majority of people leave it later than they should. The increase in stress levels of moving home is directly proportional to the age of the mover. Everyone handles stress differently, so this is not a universal law, but moving at 65 is generally far less stressful than moving home at 75. One needs to be proactive and understand that age-related illnesses come upon one suddenly. The retiring baby-boomer generation is more proactive in this regard and there are more people moving into mature lifestyle villages in their late 50s early 60s, which is the ideal time, bearing in mind modern villages cater for an active lifestyle.

CONSIDERATIONS FOR MOVING

  • Physical health: In later life, the importance of being able to access medical care quickly and easily while not breaking the bank, will become a priority, so having healthcare facilities and trained professionals close at hand means that you will be able to enjoy your golden years without worrying unduly about these unforeseen eventualities.
  • Mental health: Loneliness, boredom and social isolation become a reality as you age, particularly if you’re stuck behind high walls in the suburbs, nursing a spouse, or no longer able to drive. Retirement villages however are home to vibrant communities of elderly people who are keen to make new friendships, to stay active, and even to learn new skills.
  • Home and garden maintenance: Cooking, cleaning and gardening all get much more difficult as you age, and keeping up with home maintenance can be both onerous and costly. In modern retirement villages, professional teams take care of home maintenance, gardening, healthcare, housekeeping, laundry, and catering.
  • Security: At most professionally run retirement villages, 24-hour security is part of the package. And if you do go away on holiday, you can simply lock up and go, knowing your home is safe and secure.

CHOOSING THE RIGHT VILLAGE

It is advisable for prospective purchasers to visit at least five villages to make comparisons and also to draw up a comprehensive list of questions that should be satisfactorily answered by the salesperson. The list will be long but should always start with security, which is paramount. A wall or electrified fence and gatehouse alone are not sufficient. Security should include 24/7 CCTV monitoring of the fence line in a professionally operated control room with an armed response back-up.

Other questions to ask relate to health-care provision, the monthly levy and what it covers, community life and facilities, and the financial strength of the body corporate. Buyers must obviously also check that prices and payment options suit their budgets.

INDEPENDENCE WITHIN A COMMUNITY

Many senior living communities are aware that retired people don’t want to give up their independence; they simply want a structure that is beneficial to their needs and lifestyle. Retirement neighbourhoods can use technology, expert service providers, and a wealth of options for living, eating, enjoying exercise and entertainment to ensure that residents are independent and happy. On the other hand, living in a retirement community lessens isolation, provides security, companionship and care, and this has especially been the case during Covid restrictions, which have seen older people facing intense isolation. Living in a senior community can help residents create relationships with peers, carers, and service providers, and feel less alone. Many senior living communities allow pets, or in other cases, certain types of pets such as one small dog. Some facilities may offer care for pets if residents cannot care for their pets alone.

HEALTH BENEFITS

Enjoying leisure activities with friends, such as playing bridge or participating in a book club, have been found to protect cognitive skills. Physical activity, such as walking and hiking, gardening or yoga, is one of the most important things you can do for your health. Senior living communities also reduce the incidence of falls, one of the leading causes of injury and death. The likelihood of a fall going unnoticed in a senior community is low, as well-lit and clutter-free living areas prevent falls, and exercise and physical therapy can reduce their instances and severity.

MEDICAL CARE AND AMENITIES

Before choosing a senior living community, you should assess the level and quality of healthcare the community provides. Is there a frail care section? Does it have intermediate assisted-living accommodation? You should also confirm the community’s procedures in the event of an emergency, their disaster preparedness, and which hospitals will be used if admission is necessary. This will help ensure a person receives the right level of care and can avoid revisions to their routines after they move in.”

To read the full article, click here.

Retiring may be the hardest part about retirement. It’s not unusual to get cold feet. But you don’t want to work forever either, so what do you do? Here are some coping tips to get you over the hump. To read more, click here.

The changing world of retirement living

The changing world of retirement living

Lynda Smith is the CEO of 50+ Skills and Refirement Networka business involved in helping organisations and Individuals 50+ to understand the opportunities and challenges that the future holds for this demographic group. She is an accredited retirement coach in South Africa through Retirement Options USA.

 

Lynda writes:

“Longevity gifts us with more years and choices that need to be made around life, work, and family. In our parents’ generation the establishment of “old age” homes and nursing facilities were a choice many made as part of their plan beyond their working life. The next generation, known to many as the baby boomers are now aged 56 to 74. They have many more options and choices. Let’s look at what these may be.  In many cases, two generations will be living side by side, but may have quite different needs.

  1. Current Old Age homes that have large numbers of residents 75-100
  2. New Life Rights type villages with cottages and apartments.
  3. New Sectional Title Villages for an Over 50 Market.
  4. Choosing to stay in an inter-generational community close to family.
  5. Remaining in your own home and bringing in services as you need them.
  6. Downsizing from your larger home into something smaller.

This new generation is larger in size and is currently being bombarded with many choices. This generational group has seen the world change greatly over their 56-74 years of life. Each shared cultural moment affected their values, beliefs, and mindsets—creating new generational ideals different from their parents in the Silent Generation. Values like individualism, independence, control, and value define their thinking. Many in this generation are familiar with the concept of “old age” homes as they helped their parents make these decisions and have engaged over the past 20 years in what this model offers. Some of these perceptions may be positive, but many may not be. This can have an impact on sales into this style of living looking to market to the next generation.

Some of the marketing messages that are key for this generation can include the following:

  • Health and Wellness facilities
  • Reliable Fibre Network Solutions
  • Choices around equity and growth of property
  • Security
  • Customized services and personalisation.
  • Care services in their homes on demand
  • Business services
  • Close location to great shopping centres and medical facilities
  • Remaining an active part of the larger community

Within this cohort of baby boomers, the needs will differ. The older group may align more easily with some of the current status quo, but the younger group will demand much more as they enter this market. Managing agents and developers need to be prepared for this potential market.

The challenges from the market are also varied and causing other challenges that need to be addressed. The sale of primary homes is taking longer, and prices have dropped. Sadly, this is the most divorced generation ever to enter this season of life and many cannot afford that current offering. Many have not managed to complete work to the age of 65 for a variety of reasons and this presents less money to invest for this season.  High levies could also be impacting a sale.

There are challenges on both sides of this opportunity and developers and owners of retirement homes, need to do deep research to ensure that there are a range of possibilities that meet the needs of the current market. Please also ensure that your sales teams are equipped and ready to deal with this new generation coming your way.  Individuals need to understand the different opportunities, ask the right questions, and make sound decisions to ensure that this season of life is filled with the best that life has to offer for them.”

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The development of retirement villages is a specialist field and Shire consultants complete the standard professional team of developers who are planning or executing new retirement developments. Click here for details of projects that Shire has contributed to.

 

Why Retirement Lifestyle Villages are a lifeline to elderly people battling COVID-imposed isolation

Why Retirement Lifestyle Villages are a lifeline to elderly people battling COVID-imposed isolation

“As the socio-demographic group most at risk of falling severely ill or even dying after contracting COVID-19, there’s no doubt that the over-60’s has been the worst affected by the pandemic. However, the negative impact of the COVID-19 pandemic on the older generation reaches beyond the risks to their physical health.

“To make matters worse, the elderly are not only battling the physical health effects of the virus, they’re also facing the toll that the virus has taken on their mental health – thanks to COVID-imposed isolation”, explains Gus van der Spek (property developer and owner of a life rights company).

“Many elderly people across South Africa live alone and had already been struggling with feelings of isolation and loneliness before the pandemic began, but with the very real threat of COVID-19, these issues only worsened.”

How an existing threat to elderly wellbeing was exacerbated by COVID-19

Loneliness and social isolation for those not living in retirement communities is a well-documented issue facing the older generation, brought on by factors such as the loss of a partner, having family emigrate, losing touch with friends and withdrawing from community activities.

“The physical and mental health risks to elderly people living in isolation are numerous: it increases the risk of premature death, dementia and is associated with higher rates of depression, anxiety and suicide,” explains van der Spek.

The threat of COVID-19 forced even elderly people with community ties and family nearby to go into isolation. Government communication urged over-60’s to stay home as much as possible and family members and friends needed to stay away to reduce the risk of infecting the more vulnerable older generation. Churches and other community centres (which formed the basis of many of these individuals’ social lives) had to close their doors.

“To add to this, while the rest of the world turned to technology as a tool to keep them connected to loved ones, many elderly people struggled to adapt to these tools, especially those who lived alone with no one around to walk them through it,” adds van der Spek.

Community living as a lifeline

Thankfully, not all over-60’s were left to grapple with the physical and mental challenges of COVID-19 on their own. “Those residing in retirement communities were able to interact with their friends and friendly staff members on a daily basis,” he says.

While it is true that nursing homes and frail-care were hit particularly hard by COVID-19 as they were often the location for concentrated outbreaks, van der Spek explains that is unfortunately as a result of the close living conditions in these facilities and the underlying health conditions typically found in nursing home and frail-care residents.

“However, those who had opted to live in retirement lifestyle villages and estates were able to isolate in their own units, with plenty of space to themselves while still interacting safely ‘masked-up’ outdoors with other residents and staff when necessary”.

“Residents of these kinds of retirement communities were able to have the best of both worlds – they had the safety of their own units rather than a single room in close contact to other sick people, and they were able to interact with their neighbours safely outdoors within the boundaries of a safe, access-controlled environment,” he adds.

More senior living options to combat elderly isolation

Van der Spek says he is partly motivated by the desire to combat isolation amongst the elderly and to give them a home that promotes overall wellbeing. “Research indicates that community living has proven to significantly improve the physical and mental health and happiness of the older generation, and we’re proud that our Estate will soon be a part of those efforts.”

Six ways in which living in retirement lifestyle estates help to combat elderly isolation:

1) An abundance of new friends close by. “While there are obviously more ways to connect with your friends and neighbours without the threat of COVID-19, it is still possible to socialise with your neighbours outdoors, with masks on and while 1.5 metres apart.”

2) Staff on hand to talk through needs. “If residents are feeling lonely or that they have no one to talk to about their emotions, they know that professional staff are always on hand to listen and offer solutions where possible.”

3) Assistance with connecting to loved ones. “Many elderly people desperately want to video-chat with family and friends who they aren’t able to see in person, but they are unsure of how to go about it. The Estates staff are able to help get them set-up and comfortable with using these tools.”

4) Beautiful grounds to socialise safely outdoors. “If you’re not comfortable interacting closely with other people yet but would still like to see them and wave hello, many retirement villages feature beautiful gardens so that you don’t have to be stuck inside on your own all day.”

5) Access to top medical practitioners who can spot the signs of elderly people suffering from loneliness before it escalates. “As feelings of isolation can lead to depression, anxiety and even thoughts of suicide, it’s important to have access to medical practitioners who can identify and treat these symptoms.”

6) Smart technology that keeps a watchful eye. “Some retirement villages use smart technology such as sensors in the floor next to the resident’s bed to monitor if they’ve gotten up that day. This is primarily used as way to detect if a resident is ill but could also be used as an way to detect symptoms of depression.”

“Finally, once the threat of COVID-19 subsides, most retirement lifestyle villages and estates will organise regular community events and activities to encourage socialisation among residents and ensure that there is a strong sense of community to combat feelings of loneliness and isolation amongst the elderly,” van der Spek concludes.”

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Shire offers Development Consulting: Assisting Property Developers in the planning and execution of all key elements of new retirement villages. To contact us, click here.

These are the bad things about early retirement that no one talks about

These are the bad things about early retirement that no one talks about

Marketwatch’s Sam Dogen published the following article on Oct. 13, 2019: “These are the bad things about early retirement that no one talks about.

Welcome to your identity crisis…

For all the glamour of living an early retirement lifestyle, there are plenty of negatives I’ve come to discover since I permanently left my job in 2012. I know why we revert to our baseline state of happiness, no matter how much freedom and money you have. Let’s go through some of the negatives of retiring early now that I’m a grizzled veteran.

1) You will suffer an identity crisis for an unknown period.

When you’ve spent at least a decade working in a profession, you’ll find it incredibly jolting to no longer be identified as the person who is a marketing expert, an investment professional, or the management consultant who can figure out how to optimize a business. It’s only after you leave your job do you truly realize how wound up you were in your profession.

Your identity crisis may last as short as three months or it might last for years. It all depends on how wrapped up you were in your job, how long you spent getting educated after high school, and whether you have a clear plan post-retirement. Doctors are some of the people who suffer the most after leaving their occupations. Conversely, high school graduates who somehow struck it rich with a product or an invention seem to adjust much easier in post-retirement life.

Job titles can be incredibly addictive. Why else do people get so depressed when passed over for promotion? Why else do people try so hard to get promoted sooner and faster than everybody else? Do not underestimate the importance of being a manager, director, vice president, or even a C-level executive.

After all, the most common question people ask when they first meet each other is: What do you do for a living? And if you tell them you don’t do anything for a living, well then, you might just feel like a sheepish loser. You’ll want to try to explain yourself, but by then, your three-second first impression will no longer hold the other person’s attention.

What happened to me: After working in the Asian equities business for 13 years, it felt hollow to no longer have my Executive Director title or be identified with my investment firm. I felt sad that I could no longer go to Asia for conferences or with clients. For so long, taking a business-class trip to Hong Kong, India, China or Taiwan was part of my quarterly routine. Shallow as it may sound, it felt special to have priority boarding. I felt important when clients would entrust me to show them around in a foreign land.

For the first year after leaving my job, I wondered how the business was doing without me. Could they really survive without my expertise? After all, I was there for 11 years. Surely, they needed my relationships. But after months went by with no email or phone call from my old firm saying they wanted me back, I had to come to terms that I was no longer important to them.

I wanted to believe that my position meant something to the firm and to the people that I serviced. But at the end of the day, the person I trained to replace me as part of my severance agreement, was good enough. And because he was good enough, I concluded that I was no longer any good.

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2) You will be stuck in your head.

When you suddenly have an extra 10 to 14 hours a day of free time, it’s very difficult to optimize your time wisely.

Your productivity will suffer in retirement. You will no longer feel motivated to achieve great wins. As a result, you may slowly start to get depressed. Only after some really deep soul-searching and some, “what am I doing with my life?” questioning will you begin to organize your time better and become more productive.

Your mind can be very dangerous because it can always second-guess your actions. Did I retire too soon? What if I run out of money? What if people think I’m a loser? What if I can’t ever get back into the workforce if things go wrong? When you have a lot of time to think, your doubts go on and on.

Perhaps one analogy is to compare being stuck in your head with Locked-in syndrome. LIS is a condition in which a patient is aware but cannot move or communicate verbally due to complete paralysis of nearly all voluntary muscles in the body except for vertical eye movements and blinking. This could be one of my worst nightmares. Retiring early may render you inoperable for a while.

What happened to me: Because I left work at age 34, I was worried for about the first two years whether or not I had made the right choice. No rational person leaves a well-paying job to be unemployed in their mid-30s. Your late-30s is when you start to finally make good money. And by the time you reach your 40s, you should be at your maximum earnings power.

During my first year of early retirement, to the outside world I proudly proclaimed I was retired from a career in finance. But on the inside, I was second-guessing my decision to leave. Because of my uncertainty, I decided to do some part-time consulting with a financial technology startup for about 20 hours a week. It was a great way to distract my mind from all my fears, earn some side income, and re-plug myself into society. I also kept in touch with multiple banks until my Series 7 and 63 licenses expired.

Finally, I dived deep into my writing on Financial Samurai. Writing has always been my most cathartic way to deal with any uncertainty or problems I might have. For example, now that I have a son, I’ve been worried about whether our roughly $200,000 a year in passive income is enough to support a family of three if he doesn’t win the San Francisco public school lottery system. It’s taken almost 20 years for me to generate this passive income level, and it still doesn’t seem like enough.

Given this worry, I did a deep dive budget analysis for a family earning $300,000 a year, and it sure seems like we need to earn $100,000 more to maintain our quality of life in San Francisco. Alternatively, we can always move to a lower cost area of the country or world.

3) People will treat you like a weird misfit.

Whether it’s because retiring early is unconventional or because people are secretly jealous you aren’t grinding away at a day job, people won’t give you the same amount of respect as working-class citizens. After all, if they can’t describe what you do for a living, then they can’t pigeonhole you into an archetype that is comfortable for them.

Having a job means you are a productive member of society. If you retire at a young age, people will assume you are simply slacking off and not paying any taxes. They’ll sometimes look at you as a leech they want to flick off.

Further, if you are an outcast, then you won’t be invited to parties or events that other working people always get to attend. You’re simply not top of mind to them. If you are an extrovert, early retirement will be much more difficult than if you are an introvert.

What happened to me: After the first year of early retirement, I no longer told anybody I retired early. Instead, I told anybody who asked that I was a writer, a tennis teacher, a fintech consultant, or simply in between jobs. Before that, I think a lot of people just assumed I was a trust fund baby who did not have to work. And the last thing this middle-class guy who went to public school wants to be known as is a trust fund baby.

My favorite time of the year was during the winter holidays. I loved going to all the holiday parties and getting tipsy with fellow revelers. Now, I get invited to zero holiday parties because I don’t work for anyone. Nor do I get invited to client holiday parties either, even though I have several partners who are based in the San Francisco Bay Area. It may sound silly, but having a drink with good people with shared interests really means a lot to me.

It takes a lot of effort to build new social networks if you aren’t part of a larger organization. There is no weekend cookout a colleague is hosting on Labor Day Weekend to attend. I’ve had to participate in various meetup events to find new people to hang out with. So far, my social network only revolves around tennis and softball. But even then, it’s not like I’ve found buddies who will come over and just chill in the hot tub over a beer or anything.

4) You’ll be disappointed that you aren’t much happier.

So many people think that once they achieve financial freedom or leave a job they dislike, they’ll suddenly be permanently happier. The truth of the matter is, your elevated happiness will only last at most three to six months. Eventually, you’ll revert to your natural state of being.

Think back to your high school or college days when you didn’t have any money compared with now. I’d venture to guess you were just as happy, if not happier when you were a broke college student.

Having the freedom to do what you want is priceless. But you will eventually take your freedom for granted like the air you breathe. On the days you feel angry or sad, you will start questioning what the hell is wrong with you since you’ve got more than the average person. You’ll feel stupid for feeling unhappy when there are literally hundreds of millions of people in the world wondering whether they’ll have enough to eat the next day.

You think, if I can’t be happy when I’m financially independent, surely there must be something seriously wrong with me. And you could be right! Can you imagine being unhappy as a Norwegian? Norway is perpetually ranked as one of the top five happiest countries in the world.

What’s going on with me: I thought I’d be much happier not having to report to a micromanager boss I did not respect. But my increased happiness was fleeting and only lasted for about a week before I was back to my regular self. Instead, my happiness was weighed down by months of uncertainty on whether I had made the right move to leave my job. It was only after about two years did my doubt finally start to dissipate.

Although corporate politics no longer upset me, other things end up filling the void. For example, drivers who decide to double park on a busy street in rush hour traffic really bother me now. So do dog owners who let their dogs poop in front of my house and don’t pick up after them. In the past, I could only allocate a small amount of annoyance to such incidences.

Instead of being permanently at a happier level, I’m simply no longer as annoyed or as angry at things as frequently. Further, the volatility around my steady state of happiness is lower. In other words, I’ve mellowed out. That said, don’t offend me because I still enjoy a really good fight.

5) You constantly wonder whether this is all there is to life.

Retiring early is like finishing up your favorite longstanding TV show. You’re glad there’s a conclusion, but you’re also sad that it’s over. You hope to find a show that’s as good or better, but there are no guarantees.

Most of us spend 13 years going to grade school so we can spend four years in college to get a decent job. Then we spend decades trying to earn and save money to provide for our family and then one day retire by 65. With good luck, we’ll live for another 20 years to enjoy all the fruits of our labor.

When you retire at a much earlier age, you are constantly left wondering what’s next. You are mentally twiddling your thumbs waiting for the next big thing while your close friends are all at work. Early retirement can get extremely mundane and boring because you have nobody to spend time with.

As a result, you’re repeatedly forced to will yourself into action. This constant self-starting attitude can become extremely trying to the point where you long to rejoin the workforce and be told what to do.

What’s going on with me: I probably drove my wife nuts during the first two years of early retirement because I constantly told her I was bored. Only boring people get bored right? Wrong. Everybody gets bored at some point. When you’re working, you don’t have time to get bored because you’re working. There’s only so much tennis, golf, and softball I can play before my knees break apart. There are only so many churches to visit in Europe before they all start looking the same.

She used to have vacations from me because I would be away traveling for work every month. Now she was seeing my cherubic face every single day. It’s a good thing we had three bedrooms at the time. Otherwise, I’m pretty sure we’d both have gone crazy from seeing each other so often.

It was only after our son was born in early 2017 that I felt a renewed sense of purpose. Before my boy, I felt my purpose was to help educate as many readers as possible about personal finance to one day be free. After my boy was born, my purpose has expanded to keeping Financial Samurai running long enough to teach him about operating an online business out of fear he may have a tough time getting ahead. In addition, I now need to live long enough until he finds someone who loves him as much as I love my wife.”

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