YOUR GUIDE TO
Independent Living
What is a DMF (Deferred Management Fee)?
Your questions answered
Retirement planning introduces us to a myriad of terms and concepts, one of which is the DMF, or Deferred Management Fee.
Understanding village costs can sometimes feel overwhelming, so we break down what a DMF is, why it exists, and how it fits into your financial planning.
Key Takeaways
- A Deferred Management Fee (DMF), sometimes also called an ‘Exit Fee’ is a significant financial aspect of retirement village living where a portion of the entry payment is retained by the village operator until the resident leaves, funding ongoing maintenance and services.
- Opting for a retirement village with a DMF structure can offer more affordable entry prices and access to a community-rich environment with comprehensive amenities and support services, potentially enhancing the retirement lifestyle.
- Understanding how DMFs work, as outlined by the Retirement Villages Act, is crucial for making informed financial decisions when considering a move to a retirement village.
- Villages like Archer Villages exemplify how the DMF model aims to provide a balance between upfront costs and long-term lifestyle benefits, offering security, community, and well-maintained facilities.
What is a Deferred Management Fee (DMF)
A DMF, or Deferred Management Fee, is a familiar term, especially if you’re exploring retirement villages in New Zealand. This cost arises when you leave the villa within the village. Many villages, including Archer Villages, adhere to the guidelines set by the Retirement Villages Act, ensuring both transparency and fairness when it comes to managing these fees.
How Does a DMF Work?
When you decide to join a retirement community like Archer Village, you embark on this journey with a lease-like contract for your villa. Here’s what you need to know:
Right to Occupy: Your contract grants you the right to occupy your villa and enjoy all the village facilities and amenities. This is akin to having a lifelong membership where you pay an upfront amount, ensuring your stay is comfortable.
Lump Sum Payment: The entry price you pay is often thought of as similar to rent paid in advance.
The Role of Archer Villages
Archer Villages plays a significant part in this financial arrangement. As an operator, they hold your money until you decide to vacate. Upon your departure, the money is returned minus the DMF.
Why the DMF Exists
The DMF is not merely a fee; it’s an investment in your lifestyle. Let’s explore some key reasons why this fee is crucial:
Ongoing Maintenance: Retirement village operators use the DMF to maintain the community infrastructure, ensuring living conditions remain top-notch. It also is a contribution to the refurbishment of vacated villas in preparation for marketing and reselling them to the next resident.
Enhanced Amenities: The fee helps provide a range of amenities that might not be available if you lived independently, from well-maintained gardens to recreational facilities.
Financial Implications of a DMF
A refurbished villa at a retirement village like Archer might cost around 80% of a similar home’s value in the area. This pricing strategy offers several benefits:
Affordable Housing: You secure a villa at a competitive price while reaping the benefits of the included amenities.
Potential Savings: The price difference gives you an opportunity to create a nest egg, allowing you to enjoy your retirement worry-free.
Making the Decision: Is a DMF Right for You?
Here’s why opting for a village with a DMF might be appealing:
Community Living: You get to live in a vibrant community filled with people in similar stages of life. This means opportunities for social engagements, making new friends, and participating in community events.
Peace of Mind: With regular maintenance taken care of and comprehensive facilities, your daily needs are met with fewer hassles, giving you more time to focus on enjoying retirement.
Calculated Investment: While the DMF is an upfront consideration, it ultimately serves to enrich your living experience, making it a sound investment for many.
A Closer Look at Archer Villages
Archer Villages presents a compelling example of how retirement villages operate under the DMF framework. With a clear structure and transparent dealings, they offer:
Lifestyle: First-rate amenities that enhance your living standard.
Security: Financial peace of mind with a straightforward DMF model.
Community: A rich, engaging environment allowing you to thrive during your retirement years.
Explore Further Resources
For those considering retirement village living, continually exploring resources is crucial. Here’s what’s next:
Retirement Villages Act – The governing legislation that covers DMFs and other aspects of village operations.
Conclusion
In summary, a DMF offers retirees the opportunity to live in a community that supports their lifestyle while planning for future expenses. Make the decision that best fits your retirement goals, ensuring a fulfilling and restful experience. Retirement is a time to enjoy, explore, and cherish, and understanding DMFs is instrumental in making that happen.
With thorough planning and a firm grasp on what DMFs entail, you can secure a tranquil retirement and relish the myriad possibilities that await at Archer Villages.
Special Note:
This video series ‘Your guide to independent living’ is intended to provide an overview only, depending on when it is viewed, may contain outdated information. For the most current details, please refer to the village’s Disclosure Statement and Occupational Right Agreement.
Archer
Villages
With four superbly located retirement villages in Christchurch, Archer has the right home for you in the location you love. Find a village below to learn more or get in touch.
Beckenham Village & Home
Nestled in the heart of the Beckenham shopping precinct, near the picturesque hills and in a prime central location, Archer Beckenham Village offers a welcoming and convenient lifestyle. Many residents choose Archer Beckenham for the vibrant, “close to the heart of the village” atmosphere that makes the area so special.
Beckenham
Thorrington Village & Home
Often described and ‘green and leafy’ the gardens and surrounding at Archer Thorrington are best experienced than described. Set in the quiet and sheltered “Beckenham Loop’ area, the village and care home offers peace and tranquillity in extensive park like surroundings.
Beckenham
Maryville Courts Village
Maryville Courts Village is a haven in the inner city and brings together the convenience of city living, the closeness of a friendly community and the comfort of a spacious surroundings.
Central City
Linrose Village
Linrose Village is an independent-living village and provides an affordable living option compared to many retirement villages in the city. It is located on a bus route and near to Eastgate Mall and in close proximity to the Brighton and Sumner Coastline.
