Navigating the retirement landscape is tricky in this economic environment.
Retirement is a big deal. We could spend a third of our life in retirement, and while for some it is a cherished dream, for others it can be an impending nightmare.
Costs have been rising, and inadequate pensions, limited savings, and lifestyle considerations have all conspired to change the retirement landscape we once thought we knew. For many Canadians, this has brought into question the affordability of retirement, and the fear of outliving our money.
Unknowns like the loss of employment, increasing debt levels, a divorce or even unexpected caregiving responsibilities can all further disrupt your retirement plans.
According to The Healthcare of Ontario Pension Plan (HOOPP) in its fifth Canadian Retirement Survey, as inflation continues to be stubbornly high, just under half of employed Canadians (44%) had not been able to set aside any money for retirement in the last year. This comes as Canadians rank saving for retirement (50%) and affording day-to-day expenses for their family (42%) as their top two financial priorities.
Households are learning that high inflation erodes purchasing power; higher borrowing costs add to the savings challenge; and reduced investment returns result in less disposable income. When combined, these challenges create a perfect storm for retirees limiting the income necessary to live their desired retirement lifestyle.
The reality is, many Canadians lack company pensions and rely solely on government benefits and their personal savings to fund their retirement and achieve financial security.
Sadly, those close to retirement have been falling behind; almost half report less than $5,000 in savings according to HOOPP. Additionally, the cost of daily living remains the top concern for those between the ages of 55 and-64 (71%) and 66% percent of pre-retirement adults who own a home are exploring their options. In fact, 34% say they are relying on the sale of their home to help fund their retirement and 52% are worried about what interest rates will do to others ability to buy a home from them as they approach retirement.
And herein lies the silver lining – home ownership.
You don’t have to move to create a retirement annuity for yourself.
HomeEquity Bank offers the CHIP Reverse Mortgage, which can be the right product, for the right person, at the right time. If you’re over the age of 55 looking to stay in their home and interested in accessing your home equity to supplement your retirement income, , you may have discovered how to pave the way for a brighter future.
As the pressure mounts for Canadian retirees, it is imperative that we address these personal financial obstacles
In the meantime, to reduce financial stress, I suggest exploring all your retirement funding options. Those Canadians who don’t have a company pension plan still have the opportunity to create their own personal pension plan and live out their retirement dreams with peace of mind.
And never lose sight, because you were savvy enough to buy your home early in your life, you’ve opened up your funding options in retirement. The CHIP Reverse Mortgage can help you access the equity you’ve built in your home, without having to move or sell, which for the majority of Canadians, is the ideal retirement.
Your real estate not only benefits you from a return on your investment, it also can provide you with financial flexibility, and peace of mind. Funding your retirement comes down to income streams, lifestyle decisions, wildcards such as living too darn long, and market volatility risks to name a few. However, at the end of the day, you can minimize those risks by exploring and understanding all of your funding options. By asking the right questions, you have the ability to live retirement on your terms.
Pattie – PLR@heb.ca