There are plenty of retirement plan options in Canada! Stay on top of the best plans right here.
Latest News
What happens at the end of a reverse mortgage? Mar 9th
When you get a reverse mortgage, you tap the equity in your home without having to sell it. There are several advantages to having a reverse mortgage, for those who qualify: For one, you gain access to part of the cash value of your home, increasing your liquidity. Setup and legal fees are rolled in.... More »
How much has the pandemic hurt your retirement plans? We delve into the retirement portfolios of two couples hit hard by COVID-19 to see what damage was done + MORE Feb 16th
We start with Deborah and Daryl Burton, a Toronto twosome in their early 70s who both contracted COVID-19 early in the pandemic..... More »
RRIF and LIF withdrawal rates: Everything you need to know Mar 7th
At some point, a registered retirement savings plan (RRSP) is typically converted to a registered retirement income fund (RRIF). The latest you can defer the conversion of your account is the end of the year you turn 71. This means that by December 31 of your 71st year, you need to either withdraw t.... More »
What’s the Rule of 30? And what does it have to do with income and retirement? + MORE Oct 26th
If you’ve never heard of the Rule of 30, welcome to the club. You may be hearing about it more though. This month, retirement expert and semi-retired actuary Fred Vettese is publishing a new book: The Rule of 30: A Better Way to Save for Retirement (ECW Press, 2021).
I thought initially t.... More »
Downsizing vs reverse mortgage: which option is right for you?
– moneysense.ca
For many Canadians approaching retirement, their home is by far their largest asset. With detached homes in major cities selling for well above $1 million, it’s not surprising that owners expect to tap into that equity to help fund their golden years, prompting the common refrain: “My home is my retirement fund.”
To make this strategy work, homeowners have a couple of options:
To make this strategy work, homeowners have a couple of options:
sell your home, buy one that’s cheaper and pocket the difference (also known as downsizing);
or, if homeowners are 55 years and older, take out a reverse mortgage, which provides up to 55% of the market value of a primary residence, tax-free.
Although a reverse mortgage charges monthly interest on the amount borrowed, you don’t have to make any payments—neither interest nor principal—until you sell the house, move out of your house, default on the loan or the last homeowner dies.
Each approach has its advantages and disadvantages. Here are some of the factors that you should consider before deciding which one is best for you…
