Andrew Allentuck, a Financial Post columnist, wrote an article which brings to light the heavy debt problems many retirees are facing. He addresses numerous issues such as an extending life expectancy as well as a growing desire to retire at an earlier age, which are difficult to support with a standard pension. As a result, Allentuck explores the option of using debt to create an investment portfolio which can be used to supplement a smaller retirement income. Another idea he fails to mention is that of a Canadian Reverse Mortgage.
Jane and James Kennedy are retired and carrying almost $70,000 worth of debt, but fear that downsizing and selling their house could leave them broke as a result of previous renovations. On the other hand, paying off their debt would wipe out their RRSP’s and retirement savings leaving no income for them to enjoy the years ahead. If you are like this couple, a Reverse Mortgage could be for you. The Canadian Home Income Plan (CHIP), offers a reverse mortgage that allows access to the equity in your home (up to 40% of the home’s value). This would give the Kennedy’s an opportunity to pay off their existing debt. Payments (principal or interest) are not required on the Reverse Mortgage loan until both you and your spouse leave the home. That way, you’re freed up to do what you want with the money, when you want, and don’t have to worry about paying it back until you move out. Check out the Horizon Equity website or contact us to see if this option could be right for you.
Request a Reverse Mortgage Quote today from Horizon.