Retirement village costs project needs volunteers
ARE you willing to share a copy of your retirement village contract with researchers who are developing an online tool to compare the cost of retirement village accommodation?
Dr Timothy Kyng and his team at Macquarie University need volunteers to supply contract copies, redacted in the appropriate places to preserve the privacy of the volunteer.
"We are hoping to get copies of contracts so we can design our calculator to be able to deal with all of the possible variations on the theme of the fee structure," Dr Kyng said.
He is also hoping that within a month he will be able to call for more volunteers to help test the online tool and provide feedback on how user-friendly it is, before it goes live at the end of 2017.
Dr Kyng explained the aim of the calculator is to assist consumers decision making by being able to compare different retirement village contracts against each other.
Having had to deal with the challenge of finding a suitable retirement village for his mother, Dr Kyng said he understands many of the issues around this important decision.
"It is difficult to make a comparison between retirement village contracts as they are complicated," he said.
"They are quite complex with a mix of a large ingoing fee, ongoing fees (for example, monthly maintenance fees) and outgoing fees ('deferred management fees' or DMFs).
"The DMFs vary a lot from village to village. For example, it could be 3% per year for a max of 10 years, 6% for 5 years, 5% for 6 years or 10% for 3 years - all giving a total of 30%, but over different time frames.
"These different combinations of entry fee, maintenance fees and DMFs make it difficult to figure out which retirement village deal is the best.
"Our calculator aims to calculate a 'comparison rent', like a comparison interest rate for home loans, so that each combination of the fees and fee types can be equated to a rent per month payable over the new resident's expected term of residence," Dr Kyng added.
The team propose to ultimately have available two calculators; one for use by consumers and one for use by financial advisors.
To share your retirement village contract with Dr Kyng or to register to help test out the pilot online tool, contact 02 9850 7289 or email firstname.lastname@example.org.