A challenge for retirement villages

My editor’s brief – when he persuaded me and a couple of others to commence writing opinion pieces two and a half years ago – was to look after the interests of those of advancing years.

I respect the views of my fellow opinion writers Peter (futurist) and Murray (ecumenical interests) who usually stick relatively closely to the opinion pathway dictated by the editor. I generally attempt to keep within my given parameters although, from time to time, straying into other matters of wider interest. And it is pleasing to be the recipient of many comments of which the majority, thankfully, are supportive.

That said, in a perfect world, anyone who sticks their head up above the fourth estate parapet must expect the occasional opprobrium-laden blast. And I get my fair share of those.

So, this week I will fall into line and look at the plights of some of the old ‘uns.

And my beef is simply this. If we are an ageing society and if the costs of living are rising above our planned retirement income, how shall we all exist? It is no secret that my wife and I reside happily within the confines of a well run and friendly retirement village. Sure, from time to time the odd boil bursts out and a (very small) World War III erupts but generally (and happily) the boil recedes, and the skin is smooth again. Common however to all those residents has been the financial ability to be able to purchase the contract that binds us all to this collective security, social enjoyment and a caring management. And with a brand new and large care centre being built on the premises it cannot all be bad.

But the village and the 400 or so others in the country are well populated because the residents scrimped and saved throughout their lives generally building up equity on several residences they owned. Or if rural bound in early years, improved the value of the land that they tilled or upon which they displayed good animal husbandry.

But all this is changing as, for a couple of years, I have been advocating a view that within 10 years from now there will arrive a large group of people who have not taken the property equity growth path. Either because they chose not to or, and especially currently, because they cannot afford to buy and maintain worthwhile residential assets. Either way they are not following the normal save for retirement path.

Of all people over 65 years who are employed, a quarter work for the savings they will use later in life. But 29 per cent work because their financial ability to enjoy life ahead is not compatible with their acumen to either save, or are short of that requisite equity for forthcoming change. Ten years ago, two per cent of the working population was older than 65 years.

It is now seven per cent.

My warning to the retirement village industry is that in 10 years there will be a paucity of retirees who can afford to buy into retirement village life. The nice villas and apartments will turn into rental properties.

The buy-in cost to village care centres will also be beyond the reach of these people – throwing them onto the finance-restricting domain of district health boards – or whatever replaces them.

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