Your Home May Be Part of Your Retirement Plan. Are You Planning for What Comes Next?

Your Home May Be Part of Your Retirement Plan. Are You Planning for What Comes Next?

Most of us spend years planning for retirement.

We think about RRSPs, TFSAs, pensions, CPP and when we might finally stop working.

But there is one expense that is much harder to predict.

What happens if, at some point, you or your spouse needs help to continue living independently?

It’s a conversation many families don’t have until something happens. A fall. A health diagnosis. One spouse suddenly needing more care than the other. Or simply reaching the point where maintaining a large home no longer makes sense.

By then, decisions that could have been made thoughtfully can become decisions that need to be made quickly.

Your Home Is Part of the Retirement Equation

For many longtime homeowners in the GTA, their home is one of their largest financial assets.

That makes an interesting question worth asking:

Is your home simply where you plan to live in retirement, or is it also part of how you plan to fund your retirement?

It can be both.

Selling a larger family home and purchasing a smaller home or condominium may release a significant amount of equity. For others, selling and moving into a retirement residence can turn decades of accumulated home equity into the funds needed to pay for accommodation and additional care.

And some homeowners will choose to remain exactly where they are.

The important thing is understanding what each choice could look like financially before you need to make it.

Aging in Place Has a Price Too

“Staying in our home” can sound like the inexpensive option, particularly when the mortgage has been paid off.

But a mortgage free home isn’t a cost free home.

There are property taxes, insurance, utilities, repairs, landscaping, snow removal and ongoing maintenance.

As we age, other expenses may be added: housekeeping, transportation, accessibility renovations, meal preparation and eventually personal or in home care.

For a couple, the situation can become even more complicated when one spouse needs considerable assistance while the other remains independent.

That’s why the comparison shouldn’t simply be:

My house is paid for versus a retirement residence costs thousands every month.

The better question is:

What will each option actually cost us, and what quality of life will each one provide?

Plan for More Than One Future

None of us knows exactly what retirement will look like at 70, 80 or 90.

So instead of planning for one outcome, consider three.

Best case: You remain healthy, active and independent and comfortably stay in your home for many years.

Most likely case: You eventually need some help with the house, transportation, meals or personal care.

More challenging case: You or your spouse requires significant daily assistance or a move to a residence providing additional care.

Then look at your finances and your real estate.

Could your retirement plan comfortably handle all three?

Why I Think This Conversation Should Start Earlier

I have helped many people make the transition from a longtime family home to something smaller, and one thing is very clear:

It is much easier to make a good real estate decision when you don’t have to make one.

You have time to explore neighbourhoods.

You can compare condominium living with a bungalow or retirement community.

You can decide what belongings you really want to take with you.

You can sell when the timing works for you.

And, most importantly, you remain in control of the decision.

That’s very different from trying to make all of those choices following a sudden change in health.

Start With One Number

You don’t need to decide today whether you’re going to move five years from now.

But there is one piece of information worth knowing:

What is your home realistically worth in today’s market?

From there, we can look at what you would likely net from a sale and what your housing options might cost.

Perhaps you’ll discover that staying exactly where you are makes perfect sense.

Perhaps you’ll realize that moving from a house to a condominium could free up more equity than you expected.

Or perhaps it simply gives you a plan for the future.

For me, that’s what this conversation is really about.

Not selling your house. Planning your choices. Exploring our Sell and Stay in your home option.

If you’ve been wondering what your home could contribute to your retirement plan, I’m always happy to sit down with you and work through the real estate side of the equation. No pressure to sell. Just good information so you can make the decision that’s right for you.