By Joyce Wayne
In the 2023 report, “Healthy Outcomes: Understanding the Impact of Adequate, Stable and Secure Retirement Income on the Ability of Canadians to Age Well and in the Right Place,” the National Institute on Ageing and OMERS (a defined pension plan for union and non-union members in public service positions) investigates the dramatic demographic shift in the Canadian population. Today more Canadians than ever before are approaching the age of 65.
Let’s face it, 60 years ago the life expectancy for Canadians was around 70 years of age. Today those who reach 65 are expected to live for at least another two decades. Along with this growth in life expectancy, “there is an increasing concern about whether Canadians can afford their own retirements.” In fact, the report completes a rigorous examination of the relationship between “available personal economic resources and the health and well-being of older adults and their ability to age in the right place.”
“Healthy Outcomes” drills down on the reality that some retirees could face declining health or personal circumstances that will put a strain on their economic resources. Those wishing to age at home could find new costs associated with safety and ease of access to social and medical resources.
In response to these changes, the NIA recommends six policy initiatives that could assist older Canadians in aging in the way they wish. They are:
1. Promote improved financial literacy and planning.
2. Improve access to workplace pensions.
3. Enhance income stability and security by facilitating pension plans that provide post-retirement income, while also introducing and supporting more decumulation offerings for registered saving across the financial sector.
4. Improve options to leverage housing equity as retirement income sources.
5. Protect older Canadians from major out-of-pocket costs – particularly those associated with long-term care.
6. Evaluate and consider additional measures to support lower-income Canadians.
Pillars of Aging
The ability to “age in the right place” is one of – if not the most critical challenge Canadians face as they age. More than 95 percent of Canadians have identified aging in the right place as being able to age in their own home. In this report, the NIA identifies four interconnected “Pillars” needed to support aging in the right place.
- Promoting preventative health and chronic disease management.
- Strengthening home and community-based care and supports for unpaid caregivers.
- Developing more accessible and safer living environments.
- Improving social connections to reduce loneliness and social isolation.
For most, the relationship between income and income stability over time directly affects health. What one’s current, or one’s perception of future income is, relates directly to one’s physical and mental health and confidence in one’s ability to age at home. Given this relationship, the report states that “many retirees lack a financial plan for retirement or lack options to ensure that they can maintain financial stability throughout retirement.”
In the 2022 NIA Ageing in Canada Survey, researchers discovered that among Canadians who were still working and intending to retire, “only 35 percent reported that they were in a position to financially afford to retire when they wanted.” What this means is that income instability can impact physical and mental health. Although income alone is not a comprehensive measure of the economic resources needed to predict health, “it reflects the long-term accumulation of economic resources including real estate and owning a vehicle.”
Accordingly, “Healthy Ageing” reports:
“Some researchers have suggested that having an income that is rapidly changing for the worse may result in periods of inadequate income, contributing to socio-economic disadvantage and associated unhealthy behaviours (such as smoking or a lack of exercise) which increases the risk of health problems. Having periods of inadequate income may also reduce access to healthcare in some contexts, leading to inadequate chronic disease management. Income volatility may also increase stress, worry or fear over one’s current and future financial circumstances. Stress is an associated risk factor to several chronic diseases, such as dementia and cardiovascular disease. Thus, income stability may have a dual effect on health by both reducing the availability of income needed for daily living and increasing stress over one’s future financial outlook, which, in turn, impacts health.”
The report states that owning your home provides the potential for long-term financial protection and can help maintain living standards. That’s where the CHIP Reverse Mortgage can be a solution to retirement. If you’re a Canadian homeowner age 55+, you can borrow up to 55 percent of the value of your home in tax-free cash with no monthly mortgage payments. The best part is, the funds are tax-free, meaning it will not affect government pensions such as Canadian Pension Plan and Old Age Security.
After carefully reading this 2023 report on aging by the NIA, it’s reassuring to see how the CHIP Reverse Mortgage can offer both the financial stability and the mental and physical health that accompanies financial stability. With a CHIP Reverse Mortgage, retirees can age in place, and boost their monthly cash flow while staying in the home they love.
Read the complete NIA report on “Healthy Outcomes”. Learn more about how the CHIP Reverse Mortgage works or call 1-866-522-2447 toll-free to find out how it can help you live retirement on your terms.