Tag Archives: Applied Finance and Actuarial Studies

Dr Timothy Kyng, courtesy of Chris Stacey

Retirement Villages – What are you actually paying for?

A few years ago Dr Timothy Kyng was looking at Retirement Homes with his mother. As a researcher who specialises in the analysis of complex financial products, Tim did not expect that the contracts on offer would tax his analytical capacity. There is a lot of variation in the entry fees, ongoing fees and so called “deferred management fees” across the retirement village industry. It is difficult and time consuming to get the details of how the contracts work and it is even more difficult to compare one with another. Comparison shopping is hard to do but Tim set out to make financial comparisons of retirement village contracts easier by computing a “comparison rent metric”, similar in concept to the comparison interest rate that banks must quote to consumers when they lend money for home mortgages.