Abstract
Retirement village contracts are complex, blending together financial options on real estate, life annuities and life insurance. We analyse the structure of the cash flows involved in a retirement village contract and distil the cost components into an equivalent monthly comparison rent. In general, we observe lower monthly rents when the maintenance fees and deferred management fees are lower, when higher rates of capital gain are evident, and, importantly, when retirees reside in the retirement village for a longer period. Our analysis provides a framework to meaningfully compare the relative merits of the finances incorporated into retirement village contracts.
Original language | English |
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Pages (from-to) | 5581-5611 |
Number of pages | 31 |
Journal | Accounting & Finance |
Volume | 61 |
Issue number | 4 |
Early online date | 10 Mar 2021 |
DOIs | |
Publication status | Published - Dec 2021 |
Keywords
- Financial metrics
- Life annuities
- Life insurance
- Real estate options
- Retirement village contracts
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Awareness of financial strategies to finance aged cost
Colin Zhang (Participant), Timothy Kyng (Participant), David Pitt (Participant) & Thomas Purcal (Participant)
Impact: Society impacts