What to know about this topic:
- 1. Safely invest your home proceeds
- 2. Consider other options if you’re not ready to sell
- 3. Don’t forget these other funding options
- 4. Explore eligible government benefits and tax savings
- About Chartwell Retirement Residences
Are you exploring senior living for yourself or an aging loved one, but you’re unsure if you can afford the lifestyle? It’s common for people to learn how much it costs at a retirement community in their neighbourhood and feel sticker shock, assuming the option is unaffordable as it exceeds a monthly pension—but it may be more financially achievable than you think.
Here are four strategies for affording retirement living that can help you understand if the option is right for your needs and budget:
1. Safely invest your home proceeds
As Financial Educator Kelley Keehn explains, if you own a home worth hundreds of thousands—if not millions—of dollars, that money can be put to work for you while you enjoy your new retirement community.
“Let’s say you sold your home for $500,000 and invested the proceeds in a low-risk portfolio of investments, such as GICs and bonds, earning 3%—that’s potentially $15,000 a year, or $1,250 a month,” she says. “If you were able to take on a little more risk and get an average annual return of 4%, that’s $20,000 a year, or just about $1,700 a month. Those returns could go a long way when it comes to offsetting your monthly rental costs in a retirement community.”
2. Consider other options if you’re not ready to sell
Not quite ready to sell your home, either because you’re waiting out the market or you still have an adult child or family member still living in your home? This doesn’t have to hold you back from considering retirement living. As Keehn explains, there are low-cost options like a line of credit or a reverse mortgage you may consider in the interim.
“You’ll want to read the fine print and understand the costs and repayment plan, but they could provide the short-term, bridge funding you may require if you’re simply not ready to sell,” she suggests.
3. Don’t forget these other funding options
It’s also important to remember that if you have other unused assets like a recreational vehicle, car, boat, art collection or a cottage, you can also invest the proceeds from the sale of these possessions to help reduce or offset your monthly costs in a retirement residence.
4. Explore eligible government benefits and tax savings
Additionally, there are many federal and provincial benefits and tax incentives available to Canadian seniors outside of their Canada Pension Plan, Old Age Security or benefits like GIS for lower income individuals. Consider if you or a loved one are eligible for any of the following:
- Allowance & Allowance for the Survivor
- Federal Attendant Care Tax Certificate
- Veteran financial support options
- Medical Expense Tax Credit
There are also tax benefits available depending on your province of residence, such as Quebec’s tax credit for home-support services for seniors.
How Chartwell can support you
As experts in the senior living industry, Chartwell’s Retirement Living Consultants can guide you or a loved one in finding the right retirement residence for your lifestyle and budget. That includes access to preferred partners who can help you or a loved one prepare for your next chapter, including financial planners, realtors, downsizing experts, movers, and many more. Download the report now.
About Chartwell Retirement Residences
Chartwell offers a range of senior living options across Canada, including independent and assisted living retirement homes, memory care, long term care, and extended care residences. Read the Comfort Life Reports on Chartwell here, and explore how Chartwell is Making People's Lives Better by creating rewarding lifestyles seniors are proud to call home.
