Plan­ning puts gold in later years

Choos­ing the right type of ac­com­mo­da­tion is one of the most im­por­tant fac­tors linked to re­tire­ment. Lea Ja­cobs re­ports

Business Day - Home Front - - HOMEFRONT -

IT HAS been es­ti­mated that over 90% of South African re­tirees do not en­joy a fi­nan­cially care­free re­tire­ment. In ad­di­tion 31% of pen­sion­ers be­lieve that they haven’t saved enough for their cap­i­tal to last for the rest of their lives, while 33% cur­rently have a monthly short­fall be­tween their in­come and ex­penses. These are pretty scary sta­tis­tics.

How­ever, there are ways to en­sure that your golden years are well taken care of and these in­clude plan­ning ahead from a young age to help you meet your re­tire­ment goals.

Ide­ally plan­ning for re­tire­ment should com­prise, wher­ever pos­si­ble, a bal­anced port­fo­lio of in­vest­ments that in­clude prop­erty, cash, eq­ui­ties and an­nu­ities. It is also ad­vis­able to con­sider what sort of re­tire­ment ac­com­mo­da­tion is go­ing to suit both your life­style and your pocket.

It is par­tic­u­larly im­por­tant that when it fi­nally comes to choos­ing a re­tire­ment vil­lage, that you se­lect some­thing that will pro­vide you with peace of mind. Any­one con­sid­er­ing this type of in­vest­ment should look at a range of op­tions that will best suit the type of life­style they have in mind. It is also pays to look at pur­chase op­tions and de­ter­mine whether to opt for life rights, sec­tional ti­tle or share block mod­els.

When buy­ing a sec­tional ti­tle unit within a re­tire­ment vil­lage, the pur­chaser ob­tains own­er­ship of a unit or res­i­dence by means of a ti­tle deed that is reg­is­tered with the Deeds Reg­istry.

Share block schemes op­er­ate dif­fer­ently. Own­ers do not ob­tain ex­clu­sive ti­tle to the unit they have “pur­chased”. In­stead they ob­tain shares in the com­pany that owns the res­i­dence, the buyer be­ing is­sued with a share cer­tifi­cate.

Life rights of­fer pre­cisely what the name im­plies; pur­chasers have a le­gal right to oc­cupy the unit for the du­ra­tion of their life. The de­vel­op­ment and all its fa­cil­i­ties re­main both an as­set and the re­spon­si­bil­ity of the de­vel­oper.

In all three schemes the buyer has the pro­tec­tion of the Hous­ing Schemes for Re­tired Per­sons Act of 1988.

While most South Africans are au fait with sec­tional ti­tle and share block schemes, life rights is a rel­a­tive new­comer to the South African re­tire­ment land­scape. Al­though life rights developments were first launched in South Africa dur­ing the 1970s, the con­cept only re­ally started to take off dur­ing the 1990s. One of the ad­van­tages of life rights is that un­like prop­erty bought un­der the sec­tional ti­tle ban­ner, the prop­erty is not trans­ferred, there are no bond reg­is­tra­tion fees or trans­fer du­ties and there is no VAT payable.

Al­though res­i­dents en­joy sim­i­lar priv­i­leges to homes pur­chased un­der a sec­tional or other ti­tle, the de­vel­oper re­mains the sole owner of each unit and there­fore car­ries the re­spon­si­bil­ity of main­te­nance and the up­keep of the vil­lage and its fa­cil­i­ties.

When the life right ter­mi­nates through death or other cir­cum­stances, it re­verts to the owner of the vil­lage, who is then en­ti­tled to re­sell. Upon suc­cess­ful re­sale, the de­ceased es­tate re­ceives the orig­i­nal pur­chase price along with a per­cent­age of the net profit, which is de­ter­mined and agreed at the time of pur­chase, less the sell­ing and re­fur­bish­ment costs.

Es­sen­tially, a life right scheme can be viewed as a hous­ing prod­uct, an in­sur­ance pol­icy and a worry-free ex­is­tence rolled into one. This is not to say that peace of mind can­not be se­cured via other schemes but a well-run life right scheme of­fers all the in­gre­di­ents for a suc­cess­ful, se­cure, and stress­free en­vi­ron­ment.

Arthur Case, gen­eral man­ager of Ever­green Life­styles, says that the com­pany is SA’s first na­tional re­tire­ment brand and a pro­po­nent of the life rights model. “Ever- green vil­lages are worth in­ves­ti­gat­ing for their high stan­dard, wealth of ameni­ties and for the ul­ti­mate peace of mind they of­fer. The var­i­ous vil­lages com­prise homes and apart­ments, with life­style cen­tres, pro­vid­ing ac­com­mo­da­tion as well as fa­cil­i­ties and ameni­ties for re­tire­ment.”

He says that be­cause the life right de­vel­oper is in the re­tire­ment busi­ness and con­tin­ues to own the phys­i­cal as­set, he does not aban­don the vil­lage as soon as the last unit is sold.

Fur­ther­more, levies are fully dis­closed in terms of the Hous­ing De­vel­op­ment Scheme for Re­tired Per­sons Act and the levy for the first two years is pub­lished in the sales agree­ment. There­after levies may in­crease in terms of a for­mula linked to in­fla­tion.

Ever­green says that it recog­nises health­care needs change as peo­ple grow older and pride them­selves on their per­son­alised ap­proach to the var­ied and chang­ing needs of older peo­ple. The brand also ad­vo­cates a home-based care strat­egy borne of the phi­los­o­phy that treat­ment and sup­port in fa- mil­iar sur­round­ings is far su­pe­rior and ben­e­fi­cial to its al­ter­na­tive: a frail care unit or hospi­tal.

“With mod­ern tech­nol­ogy and the avail­abil­ity of fo­cussed clin­i­cal ser­vices, the vast ma­jor­ity of health­care rou­tines can be de­liv­ered in the home,” says Case. “While trans­fer to a frail care unit re­mains an op­tion, it is con­sid­ered a last re­sort and un­der­taken only once a res­i­dent re­quires con­tin­u­ous med­i­cal su­per­vi­sion or has be­come dis­ori­en­tated. In this way, Ever­green meets the goal of sus­tain­ing res­i­dents’ in­de­pen­dence via an en­vi­ron­ment that an­tic­i­pates and caters for ag­ing.”

The se­cret to a happy and se­cure re­tire­ment is to eval­u­ate your needs and plans as soon as pos­si­ble and to seek sound fi­nan­cial ad­vice. We all want to re­tire hap­pily with per­sonal and fi­nan­cial peace of mind and re­tire­ment can cer­tainly be an ex­cit­ing and ful­fill­ing ex­pe­ri­ence once you have elim­i­nated any of the po­ten­tial stress fac­tors in­volved. Get­ting the qual­ity of life you want in the fu­ture will de­pend on how well you plan for your re­tire­ment now.

Ever­green Bergvliet.

Ever­green at Lake Michelle, No­ord­hoek.

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