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  • Is your home your retirement plan?

    Author: Laura Chanin Date: October 1, 2015


    In the 13 years I have worked with clients as a CERTIFIED FINANCIAL PLANNER; practitioner, most of my clients regularly save money towards retirement, in addition to having other assets such as their home. But occasionally I have heard the odd person say ĎMy plan is to sell my home in retirement and live on that money. I donít need to save any more money. Ē When I hear this I generally cringe and think it is a bad idea. Why do I think that?

    1. 1.You need to live somewhere and what if your new home costs as much to buy as your old home was to sell?

    2. 2.What if when you want to sell, the real estate market is down and you donít get as much as you think you will?

    3. 3.What if it takes a long time to sell your home and you need money sooner? Real estate is not always that liquid i.e. easy to sell.

    4. 4.What if you donít want to move when you are older? Many times people like to stay in their homes as long as possible because they are comfortable.

    5. However, I recently met a couple where this strategy might actually work. In their case they are in their early to mid 40ís and have no children. He will get a very good pension when he retires and she will have a small one. Their plan is to sell their beautiful condo after retirement and spend 6 months of the year living in a sunny, less expensive place and rent a home when they are back in Vancouver. Even though they know rent will be expensive, they expect to save money because they wonít pay maintenance fees or property taxes. They arenít concerned about leaving any assets behind as they donít have any beneficiaries. So yes, it seems like a good idea. Why it works is that they also have other sources of money i.e. company pensions as well as government pensions CPP and Old age security.

      So there isnít one approach that works for everyone for financial planning. The best way to figure out what plans suits you is to talk to a CERTIFIED FINANCIAL PLANNER practitioner.

    Financial Planning Retirement Equity Selling

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Author : Laura Chanin
This article was prepared by Laura Chanin who is an Investment Advisor with DWM Securities Inc., a DundeeWealth Inc. Company. This is not an official publication of DWM Securities Inc. and the author is not a Dundee Securities analyst. The views including any recommendations expressed in this article are those of the author alone, and they have not been approved by, and are not necessary those of, DWM Securities Inc..