As we age, maintaining our independence is important. However, many people choose to downsize to reduce the upkeep of a family home. Therefore, they may be considering moving into a retirement village or an aged care facility. Contrary to popular opinion, an aged care facility and a retirement village are not the same thing.
So, what is the difference between a retirement village and aged care home, and how do you decide which is right for you?
What is a retirement village?
Retirement villages are ideal for those who are mobile, able to live independently, and don’t require significant medical attention or assistance with personal care.
Retirement villages allow you to continue to maintain independence and an active lifestyle. Many retirement villages also offer recreational services, such as swimming pools and cinemas. In addition, many retirement villages will offer special events and group outings.
However, if you do require some care, this can come via home care packages or possibly private carers. The cost of home care you receive is means-tested with a cap of $13,724 each year.
Your home in the village might be an apartment, villa or duplex with one, two or three bedrooms, one or two bathrooms, living and dining areas, a kitchen and a laundry.
Most retirement villages will offer home maintenance services, helping to reduce the burden of looking after a property.
Retirement villages can come in many different formats. These include:
• Lifestyle resorts: In a lifestyle resort, the occupant purchases a freehold title and builds their home, while leasing the land.
• Freehold complexes: The occupant purchases the freehold title, but the property may differ in the fees it charges compared to other facilities that are registered as a retirement village.
• Right to occupy: The occupant pays for the right to live in the property, while having the option to pay for other services
What is residential aged care?
Residential aged care is suitable for people who may not be able to live independently or may require regular medical care. In residential aged care, care is available 24/7. Everyone pays a basic daily fee of $23,294 per year. You will also need to pay a means-tested care fee of up to $34,311 each year.
In an aged care home, you are likely to live in a single room with an ensuite, although some people do share.
Aged Care residents are encouraged to participate in organised social activities with other residents.
What factors should you consider when making a decision?
If you decide to move into a retirement village, you must consider what will happen if your care needs increase. Will you be able to stay, or will you need to relocate again? Many aged care facilities also offer independent living units, which could save you the need to move if your care needs increase.
Regardless of where you move, you want it to be a long-term decision. Exit fees have long been part of retirement village contracts. Typically, your exit fee will be a percentage of your purchase price or selling price. It could also include things such as capital gain or loss, renovation costs and marketing or selling fees.
While exit fees previously haven’t been commonplace in aged care facilities, this is changing. From July 1, many aged care facilities will charge an exit fee of up to 10 per cent over 5 years.
Before making a decision, it’s crucial to consider your needs and how these may change over time.
Have you ever considered a career in aged care? Working in aged care offers the opportunity to make a positive difference in the lives of others.
If you are considering a career in aged care, Aged Care Resumes can help. We are pleased to offer various services, including professional resume writing and interview skills coaching.
Article References
Aged Care Reviews (9 December 2023) ‘The difference between retirement villages and aged care homes’, Aged Care Reviews, accessed 22 April 2025.
Lane, R (16 April 2025) ‘What you need to know about the exit-fee sting coming to aged care’, Sydney Morning Herald, accessed 22 April 2025.