This is potentially the new answer to our retirement savings crisis however, inheritance will start to become scarce if we keep taking this route for retirement needs. To give you an idea of their rising popularity, particularly with mortgage lender HomEquity Bank reports that they are up 26% this year compared to this time last year. In amounts, this translates to about 3,000 reverse mortgages that will be done. This may be a solution for retirees that do not have a workplace pension plan or a hefty amount of RRSPs saved up for their retirement.
About 12 million Canadians do not have a workplace pension, meaning they have to save completely on their own. We know government pensions are nowhere close to substantial when it comes to living and not everyone can save up enough in their own personal RRSPs for retirement. This is where reverse mortgages come into play. Reverse mortgages are advantageous because it allows you to take the equity you have built out of your home (which is not taxed), this allows you to withdraw your RRIF’s at a much slower pace and thus put you in a lower tax bracket.
Many advantages come with these mortgages, contact Robert Clancy today to figure out if a reverse mortgage is right for you!