June is Seniors Month in Ontario, a time to acknowledge and celebrate the seniors in our lives and community, from our parents and grandparents to friends and neighbours. It’s also a great opportunity for seniors to find useful information on important topics like health, finances and housing.
When it comes to financial wellness, many seniors are confronted with a difficult reality. The combination of factors like geopolitical uncertainty, affordability concerns and even the pressure to help family members with their own financial stresses have thrown retirement affordability into question, despite years of hard work to achieve it. In fact, a new survey from EQ Bank found that older Canadians are feeling the strain of retirement affordability; however, many are also sitting on significant wealth in their homes.
With the contemporary path to retirement taking twists and turns from the historically typical route, being aware of all financial solutions available is more important than ever. Here’s how EQ Bank is shining a light on some of the tools and options that older Canadians may not be familiar with.
The financial squeeze of retirement in Canada
According to the EQ Bank Seniors Month survey, among Canadian homeowners 45+, over half (53 per cent) reported a negative impact on their savings, investments, or pension income due to recent economic uncertainties over the past year. This translates to financial sacrifices that affect retirement well-being, as over two thirds (69%) have cut or reduced spending on expenses like groceries, home renovations and necessary healthcare costs, due to affordability concerns.
These financial decisions can create feelings of instability, while raising crucial questions about how older Canadians will experience a rewarding retirement, after decades of work and planning.
How our homes can play a meaningful part in living retirement to the fullest
The current financial realities for retirees go beyond having more money for day-to-day spending. They encompass deeply emotional choices like helping family members in need of immediate financial support and being able to age comfortably in the home they love. Yet, while older Canadian homeowners are feeling financial uncertainty in retirement, they also have a remarkably valuable asset that isn’t typically being used to its full capabilities.
A home holds a wealth of memories – laughter around the dinner table, kids growing up, and countless holiday celebrations, to name a few – and years of hard-earned equity. The survey revealed that over half (56%) of respondents feel much of their wealth is tied up in their home rather than available in cash or savings. What many Canadians may not realize is that the wealth in their home can play an important part in living the meaningful retirement they envision.
How? A reverse mortgage allows older Canadians to stay in the home they love, while providing financial flexibility. Accessing tax-free* cash built up from home equity can be used to answer those stressful affordability questions, be it paying down an existing mortgage, helping children with a down payment, or covering home repairs and age-related modifications. Despite the many benefits, misconceptions about reverse mortgages persist.
Dispelling reverse mortgage misconceptions
According to the EQ Bank survey, over two thirds (71%) of respondents who are aware of reverse mortgages incorrectly believed that with one, a homeowner would lose important retirement benefits like CPP/QPP, OAS, or GIS. Another 53 per cent thought the lender takes ownership of the home.
These false perceptions cloud the fact that reverse mortgages can be a life-changing tool to support financial stability in retirement by unlocking cashflow without selling your biggest asset – your home.
A reliable financial decision
Maintaining your lifestyle and aging in your home brings peace of mind and allows you to realize retirement goals without undue financial concerns. A flexible reverse mortgage from EQ Bank may help you do just that.
Available to eligible Canadian homeowners 55+, you can unlock tax-free* cash built up in your home, without the stress of monthly payments. EQ Bank provides competitive rates, and you continue to own 100 per cent of your home1.
Canadians deserve retirement solutions that enable their lifestyle and keep surprises under control without forcing them to leave the home or the community they love. EQ Bank provides tailored solutions with rates and options that suit the individual and their lifestyle needs.
While every retirement is different, one thing remains constant: Canadians deserve choice and an approach that works for them.
Get a free reverse mortgage estimate and learn more here: EQ Bank’s mortgage calculator.
Sponsored by EQ Bank.
*EQ Bank does not offer tax advice. Please consult your financial advisor to discuss the tax-free benefits of a reverse mortgage.
1 Subject to borrowers meeting their mortgage obligations. Must keep property taxes and home insurance paid and current, maintain property, and keep current all mortgage obligations.
