Ways of living in retirement

MANY baby boomers – born between 1946 and 1964 and now roughly between 57 and 75 years old – have already retired. Gen Xers – born between 1965 and 1980 and aged from 41 to 56 – realise that retirement is coming – fast – and wonder if their plans and savings will see them through.

And millennials – born between 1981 and 1995 and aged between 26 and 40 – are beginning to take the prospect of retirement seriously.

A lot of it is about money – financial experts say you need to be saving for at least 25 years to fund your retirement, and it is the first 15 years of your working life, roughly from 22 to 37, that are crucial, because it’s your oldest savings that compound interest works its magic on.

But it’s not all about money.

There are also a number of lifestyles to choose from to give you the best chance of happy and fulfilled golden years. Property 360 looks at some of them.

Remaining at home

This option sees seniors choosing to stay on in the home they have lived in for years. They are familiar with their surroundings, don’t want to go to a retirement village or move in with children – they want to remain independent for as long as possible.

As people get older and increasingly frail, they will have to pay for more help, so will need cleaning services, caregivers, meals and transport.

Modifications might need to be made to the home, such as a wheelchair ramp, grab bars in the bathroom and a medical alert system.

In cases where people live in a double-storey home, they might need to install a stair-lift, which is an expensive option, or adapt a downstairs room to become a new bedroom.

And, of course, the normal home maintenance will need to continue.

This could be a lonely option, as partners die and friends visit less often as they stop driving.

Retirement villages

These frequently offer different modes of living – younger and fitter people can live independently but, as they need more help, can move into the assisted living component of the complex. And if people become unable to live alone, they can move into frail care.

A set-up like this works well for couples who might be ageing at different rates, meaning the frailer of the pair can be cared for by professionals while the fitter partner can remain in their own home but can easily visit.

The advantages of these villages are that they are usually in attractive settings with communal gardens and joint facilities such as a swimming pool, tennis courts or even a golf course.

There is plenty of company because residents can socialise with each other and those who run the villages arrange activities, from book clubs to bridge, as well as outings.

People can eat in their own homes or dine communally, and they don’t have to worry about daily chores and property maintenance. Security is usually prioritised. The homes themselves are invariably convenient and compact.

The disadvantages of retirement villages are that they are in relatively short supply in South Africa and tend to be expensive because of the facilities and services on offer.

There two distinct funding models. One sees the pensioner buying their home in the village, and having full title to it. When they die, their estate will inherit the home, be able to sell it and take advantage of capital appreciation.

The other way, which is becoming increasingly popular, is a life rights scheme.

These schemes tend to be more cost-effective for people with less capital. The retiree is not buying the home, he or she is buying a right to use the property for the rest of their lives.

The catch is that the home remains the property of the developer, and on the death of the retiree, the developer can then “sell” the unit to a new resident at current prices. Usually the deceased estate will get some or all of the original payment but without any, or very little, capital appreciation.

One way of looking at life rights is that it is as if the retiree is renting the property but paying all the rent upfront.

Because buying into a life rights scheme does not involve actual transfer of property, no bond registration or transfer fees are payable. The developer, as owner of the property, is responsible for all maintenance, but retirees do have to pay a levy in addition to their initial payment.

Multi-generational living

This is an option for many families. It enables the older relatives and the younger ones to share costs, chores and even child care.

It means elderly parents have company and younger family members have support.

However, it can generate tensions – who is the boss of the family? Will the seniors be taken advantage of?

The success of this option could be improved by having the different generations in separate homes, such as a main house and a granny flat or cottage. This means that the different generations are more independent, don’t live in the same space but are within easy reach of each other for company and help.

It is important to arrange the finances and property ownership in such a way that should either party want to withdraw from the arrangement, no one is disadvantaged. Home-sharing

Think of The Golden Girls TV programme. Home-sharing is not just for students.

Advantages include live-in company and sharing interests, costs and chores.

But, as with multigenerational living, it is vital that the set-up is arranged in such a way that should tensions arise, people can leave without losing out on capital. A legal contract is probably sensible.

MANY retirees prefer to continue living in their own homes for as long as they are able to.