Is it Wise to Use Your Home as a Retirement Fund?

By Bruce on December 30, 2009 4:58 PM in Blog | | Comments (0)

Almost none of my friends at this point in their lives work for an employer that has a pension plan. My parent's generation counted on having pensions when they retired, but for my generation it's unheard of. Right now we're too busy putting money aside for a 5% down payment on a condo or house - the biggest investment that we'll ever make - to really contribute to our RRSPs. So it makes sense to assume that when we've paid off our mortgages our nest egg will be our nest.

According to real estate and financial specialists, it's a gamble to assume that we can use our home equity as a retirement fund. While there are some options like downsizing and reverse mortgages such as the Canadian Home Income Plan (CHIP) we shouldn't assume that we can live off of our properties. After all, we're still going to need somewhere to live.