Varun, my long-time friend in Delhi was contemplating moving to a retirement home in Jaipur. Single and in his early fifties, he has been staying with his father ever since his mother passed away.

Should one consider retirement homes at all?

Retirement homes are different from old age homes, which usually operate with bare bone infrastructure. Even healthy couples without the need for medical attention can move into retirement homes.

However, there are age limits (minimum 50/55 years) that apply. Visitors are allowed for limited days.

In addition to usual amenities, some retirement homes provide housekeeping and maintenance services to take care of one’s daily chores.

While these projects are usually located away from the hustle-and-bustle of cities, hospitals and medical staff are nearby to attend to emergencies and medical care.

Types

There are three ways in which you can choose to live in a retirement home.

Outright purchasing a retirement home

One can purchase a retirement home outright. While anybody below the age of 50 can also buy it, it can be occupied only by those above the age of 55 years. The house can be passed on to children or sold if need be.

Upfront deposit model

Here, you pay only 60-80% of the flat cost. While you get to live in the house for a set period, the deposit will be returned after deducting certain charges on death or at the end of the lease.

Renting a retirment home

Lastly, you can take it on rent. Usually, there are deposits to be paid – part of which is non-refundable.

There are certain things to know before taking a retirement home:

What are the costs involved?

Retirement homes are usually in the outskirts of a city that saves a bit on the ownership cost. However, on a per square feet basis, it also costs 20-40% more than those in the vicinity, due to extra amenities being provided (nursing facility, anti-skid tiles, handrails, etc) for the comfort of senior living.

Also, most of the services – be it that of food, housekeeping, laundry, healthcare facilities are chargeable with yearly escalation. So, while budgeting, don’t just consider initial costs but also provide for a 7-8% escalation in annual costs.

Renting v/s Buying a retirement home

It is not easy to sell or rent out a retirement home. Moreover, if you give it on rent, it has to be occupied only by those aged 55 or above.

There are two ways of renting:

One, the usual way in which you just pay rent. Secondly, avail the assisted services as well for an extra cost. For instance, a retirement home in Jaipur is available for Rs 8,000-9,000 a month.

However, with assisted services, a 10X15 fully-furnished room is given at a total cost of Rs 50,000 a month for double occupancy. It includes rent as well as regular expenses on food, electricity, wi-fi, TV as well as weekly doctor check-ups.

While assisted living suits those seeking freedom from routine work, these costs are also considerably higher than if you were to manage it yourself.

Medical and other infrastructure

While doctors visit the premises usually for check-ups, regular visits to the family doctors might also be needed. So, ensure you aren’t staying too far away. Also check for the weather (suitability), transport connectivity and proximity to shopping areas and near-and-dear ones.

The approach  

Usually, the transition to retirement homes is easy when one is active and able to make friends than when in their seventies or eighties.

So if you plan to move eventually, start doing the research and planning well in advance. Rent out for a while and find if you like the place and the people. Buy only once you are fully convinced and have a budget in place.

Takeaway

Retirement homes, while a good option, are not a panacea for your sunset years. Test the waters before making a financial commitment.

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