Devaluation of Retirement Village Resident Capital

Devaluation - the impact of the deferred management fee, inflation, rising property prices and rising nursing home entry costs on the amount paid to enter a retirement village can be devastating for some retirement village residents.

For many this has the capacity to lead to what is referred as the retirement village poverty trap or the retirement village financial trap. This is a situation where the amount left for repayment on departure from the village is devalued over time to the point where a retirement village resident cannot afford to move back into the property market or pay the entry cost to a nursing home of choice.

The resident must rely on family or government support to move to the next phase of their life.

Take this link for further details on the Retirement Village Poverty Trap .