You had grand dreams of retiring to Arizona or the Caribbean when you retired.
Now that you’re nearing retirement, can you afford it? Is it even desirable to move when you retire? What about your family and friends?
Good questions. Read on for our suggestions —
Should you move when you retire?
How much of your retirement should be in your house?
How do I pick a retirement location?
Can I finance a retirement property?
Moving When You Retire
It can be a good idea to move when you retire if you:
- enjoy new experiences and acquaintances
- are financially and physically able to travel for visits
- want a break from everyday routines
- want to save money by moving to a cheaper locale
- or the weather suits your attitude and health.
Why Sell Your Property Now?
Five reasons to sell your home when you retire:
- Free Yourself From Homeowner Responsibilities
Renting has its advantages — no unexpected furnace repairs or fence to replace every 10 years. The landlord does the painting and yard maintenance. Someone else pays to install all the conveniences you may need, like an elevator, shower grab bar, or wheelchair ramp. Aging has its expenses, even when you retire early.
- Travel the World When You Retire
You can move around and see more of Canada when you’re not tied down by a mortgage or home responsibilities. Most senior homeowners have up to a third of their total net worth tied up in their homes. Of course, you could travel without selling your home when you retire. But if the extra cash from not paying homeowner insurance or not worrying about who’s taking care of your lawn would make all the difference, it could be worth it.
- Stop Worrying About Your Finances
Your home may be appreciating quicker than your retirement income. Property taxes keep going up. Can your CPP, OAS, GIS, and company pension keep up when you retire? Inflation’s on the rise, and home equity line of credit interest rates with it. You may be in over your head quicker than you think. Bankruptcy after retirement is more common than you know. Up to 30% of Ontario seniors declare bankruptcy, Bankrupctycanada.ca reports. Find a bankruptcy trustee near me.
- No Waiting for Your Home to Sell
You can break a rental lease, but can you leave a mortgage as quickly when you retire? The profits you make selling your home could help out your daughter with her education, or son and his partner with their own kids. Breaking a mortgage contract.
How much of your retirement is tied up in your house depends on your priorities. Selling when you retire prevents time-consuming delays that could get in the way of your plans to give financial assets to your children or kin to enjoy. And, it stops probate fees from eating into your bequests, which brings us to your next option for downsizing during retirement.
- Investing: The Other Option
When you free up your money by downsizing after retirement, a world of investment opportunities (like buying an income property with the cash from selling) opens up.
Downsizing is “Found Money”
What if you downsized to a cheaper townhouse or tried life lease vs condo options instead and used the “found money” to invest? Instead of risking using up your nest egg on a good time, the equity from the sale of your downsized home could finance any costly medical needs you may have later (much later) in life. What is a life lease retirement community?.
Less Responsibility, Fewer Choices
On the downside, you’ll have to put up with having less say in how your home looks. And if the landlord falls down on the job, you could wait a long time to repair closet doors that come off their tracks or leaky faucets. You’ll be paying rent again, something you left behind years ago.
Will they even take Fido?
Moneysense.ca points out renting too early can expose you to the instability of frequent moves or rent increases. Their editors suggest leaving downsizing for retirement by renting a home until you reach at least 80 to 85. Find a retirement home in Ontario.
Investing Dollars and Sense
Moneysense.ca looks at the math of investing vs buying a home this way:
$1 million from the sale of your home today
- invested at 4% in blue chip stocks,
- yields $40,000 annually,
- for rent, living expenses and vacations
- invested in a $750,000 downsized property,
- with $250,000 left to play the markets,
- equals $10,000 annually,
- to spend anyway you want.
25 most common questions you ask us.
Financing Your Downsized Home
Whether you’re moving down the block or across the world, downsizing your home for retirement can take some finangling. You have options.
Income from private pensions, CPP, OAS, GIS, or long-term self-employment may qualify you for a conventional mortgage. Ask your lender about shorter amortization periods or buying shared property with a family member.
Taking Out Private Mortgages (Ontario)
When you’re between houses, getting bridge financing by taking out private mortgages can keep a mortgage deal alive. Private mortgage lenders charge more interest and may write shorter terms — although some do offer traditional, 25-year amortizations. Go online or ask a mortgage broker if a private mortgage could be for you. Using a mortgage broker for private mortgages. Facts to know about private mortgages.
Can a seller keep a buyer’s deposit?
How Reverse Mortgages Work
Reverse mortgages in Ontario use the equity in your home to finance home repairs, vacations, or a cottage at the lake. Provided your home is fully paid for, you can borrow up to 55% of its value to use anyway you like. Never make mortgage or loan payments until you sell or die. Your mortgage lender will sell your home to recoup their investment.You pay only home insurance, property taxes and maintenance costs. Your estate repays the mortgage loan and interest if you die. Repayment timelines are strict — be prepared to move quickly if you or your estate must settle with your lender..
Axess Law works with trusted mortgage partners to fund your retirement ambitions through a reverse mortgage. Ask us for independent legal advice on reverse mortgages.
Why You Need a Real Estate Lawyer
Let Axess Law’s experienced real estate lawyers handle your retirement sale. Our professional legal teams are experienced at closing real estate transactions on time and on budget.
When to hire a real estate lawyer (Ontario).
Access lawyers online when you use our virtual lawyer service. We video conference with you from anywhere in Ontario to review your agreement of purchase and sale for terms and conditions that could block or complicate your sale. Your lawyer suggests amendments to preserve your right to cancel, or ensure you keep the deposit if the sale goes sideways. Making amendments to agreements of purchase and sale.
When the deal is ready to sign, Axess Law witnesses your signature over video camera, and emails you a copy of real estate closing legal documents for your records. We search title to your property to locate construction liens or financial claims that could delay closing, and negotiate with the buyer’s lawyer if they have questions or concerns about buying your home after they sign the offer.
Love, affection, and land transfer tax exemptions.
Affordable Real Estate Lawyers, Anywhere You Are
Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.
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Book Online or Phone Appointments Today
Dial our 647-479-0118 lawyer line, toll free to 1-877-402-4207, for remote real estate lawyer closings 7 days a week. Our virtual real estate lawyers video conference with you anywhere in Ontario. Prefer to meet your lawyer in person? Drop by any of our conveniently located Ottawa or Greater Toronto Area law offices to make appointments, or book online with our easy web form.
Axess Law has day or evening appointments, onsite parking, and easy transit access.