I was scrolling though LinkedIn and saw an article “The world in 2026, How we should care for the Elderly”[1] immediately recognising that by then I would be a Gold Card carrying person on Superannuation! Just a few days later I read the article in the New Zealand Herald, “Retirement village risks focus of new campaign”[2]

The two articles could not be more opposed in approach. The former being forward looking, seeking to understand the needs of people into the future, seeking to convey what may be available to us as the ageing process places more challenges around daily living. The latter, I am afraid, seeks to diminish us, seeks to warn us of things that are obvious, seeks to tell us what we might be getting into. What I abhor about this approach is that the article points out that 35,000 people are living in villages and by insinuation many did not know what they were buying.

New Zealand has some of the most robust legislation around. The Retirement Villages Act 2003 and the associated Code of Practice lifts the level of disclosure to a point where there are virtually no secrets in terms of business models.  This is a very positive aspect of the industry. The regulatory environment has measures to ensure transparency at the highest level. Since the introduction of the Retirement Villages Act 2003, no resident can settle with an operator without first seeking and obtaining full legal advice on the transaction. The seriousness of this is that the lawyer providing this information, and explaining to the intending resident the terms and conditions, is required to certify that they have in fact covered all the facts and terms and conditions associated with the occupation right. Lawyers do not lightly sign such certificates.

Included in the article was an insinuation that people should also consider leaving a “capital appreciating” legacy to their children. Why? In my opinion there is hardly a 40-year-old today who is not in a stronger position than their parents were at the same age or stage.  I am a staunch believer in SKI (Spend the Kids Inheritance). Our parents have worked hard and long to create the means they have, surely they are entitled to spend it as they choose.

I believe in balance. We have frequently been told and I have heard village residents say that their move into a retirement village was/is the best move they have made. The feedback is consistently at levels well above 90%. We are also frequently told, “I wish I did this years ago!”

To examine this is simple. We all know that generally there is nothing like a free lunch. The same applies with retirement villages. Consider the opportunity being presented and the value proposition being purchased. In the main, residents have access to services, zero maintenance requirements, zero cost on refurbishment on departure and in most cases they have fixed fees for life. These undertakings come along with community facilities and social activities that are easily accessed by living in the village. It is totally unrealistic to expect all this at the same price as one would pay for a normal house. The relative financial security, the peace of mind, this all is provided in an affordable manner by having an “enjoy now and pay on departure” occupation right agreement. There is no way possible to provide facility rich environments with high engagement social and recreational activity at the price of a median house.

There is plenty of research suggesting that as our elders become less and less able to easily access activities, both social and recreational, so their lives become more complex as they experience social and emotional exclusion or deprivation from the mainstream. Retirement Villages remedy this. They are designed to enable rich, rewarding and meaningful social engagement. Without this we are more likely to experience loneliness. The latter impacts our general ability to enjoy life.

Reading these two articles, one makes me happy that we are thinking ahead. The other makes me despair! When do we give up the right to make our own choices? What age do we have to ask for our decisions to be made by others? Why are we telling people in their seventies and eighties to “watch out?” We should immediately stop telling people how to live their lives, instead we should celebrate the choice some people make to live in retirement villages along with celebrating those people who chose to continue living in their own homes.

Leave our elders to live the life they choose! The choice is yours.

Disclosure: I am the retired CEO of Metlifecare Limited, a listed NZX company which owns and operates retirement villages. I also own shares in Metlifecare.

[1] http://news.microsoft.com/apac/2016/04/11/the-world-in-2026-how-should-we-care-for-the-elderly/#sm.0001tmqz337igcq5w712i0aq8wr2b

[2] http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11620424