Loss of independence is the greatest fear for Canadian seniors, according to a recent survey. 90 per cent of respondents to a 2013 poll plan to spend their retirement in their own homes rather than entering a retirement home. Technology and improved social services have made independent living much easier for today’s seniors, and new tax credits have been introduced by the Canadian government which can make aging in place more affordable.
Reverse mortgages are also a viable option. 24 percent of Canadian homeowners are counting on their home for retirement income. Reverse mortgages are a way for seniors to do this by getting a home equity loan for up to 50 per cent of their home’s value. Reverse mortgage holders are not required to make any payments and don’t have to pay any interest or principal until the home is sold.
The Home Accessibility Tax Credit
In recent news, the Conservative government introduced the Home Accessibility Tax Credit and the public transit fund which help to support affordability and choice in housing. This credit provides a 15% non-refundable tax credit to seniors and persons with disabilities who spend up to $10,000 on eligible renovation expenses in a calendar year.
Eligible expenditures (as of January 1, 2016) must be long-term measures that improve safety, access and the functionality of a home. Measures could include as wheelchair ramps, walk-in bathtubs, wheel-in showers and grab bars.
This new tax credit can help seniors to outfit a home so that they don’t require a move to an assisted living facility part of the way through their retirement. Additional funds from a reverse mortgage can help to provide health care support in the form of in-home caregivers, medical equipment and anything else that is needed to help make the later retirement years comfortable. Aging in place is only possible with a strong support network, and family members can’t always be counted on if they don’t live nearby or have busy jobs. Having a solid plan for not just the early retirement years, when one is relatively healthy, but the later retirement years is a requirement for proper retirement planning.
Aging in place is an important requirement for many Canadian seniors, and it is possible with proper planning, taking advantage of new tax credits, and looking at possibilities for financing items and services which support independent living.
Contact Horizon Equity today to find out more about how a reverse mortgage can help you live independently in your retirement.