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Home-sweet-home spells equity

(NC) Your financial picture for retirement may be much better than it seems.

Most people think of their RRSPs, RRIFs, and government benefits as a retirement nest-egg, but as Canadians are living longer and staying more active, the strategy of using the home as part of retirement planning is a sound solution to achieving financial goals.

Better yet, a house is also a nest egg that can be tapped while you're still living in it. Owning property adds substantially to your financial base – and indeed owning a house can even deliver value-added surprises.

“Did you know that by accessing the equity in your home, your traditional investments like RRSPs and RRIFs can be made to last longer?” explains Yvonne Ziomecki a director with HomEquity Bank. “Leave those funds untouched for as long as possible and tap into the value of your house. This strategy may also give you more flexibility with tax planning if you use the tax-free cash from your home instead of adding to your taxable income.”

Ziomecki points out that stocks and bonds that are invested for longer periods stand the best chance of increasing in value – and increasing your wealth.

“Instead, you could take some cash out of your home without having to sell it,” he continued, “and there are a number of ways to do this. A line of credit is a popular short-term source of cash, but if you want a longer-term solution, a reverse mortgage like the CHIP Home Income Plan might provide you with added benefits.”

Here are the details:

If you're aged 55 and over, you can convert up to 50 per cent of your home equity into tax-free cash.

Unlike other loans on the market, you are not required to service the interest, or repay the principal until you choose to move or sell.

You also have the option to take a lump sum to pay off your debts, or for home repairs and modifications.

“Or you can schedule monthly advances,” Ziomecki explained. “Some homeowners do both creating a perfect source to supplement monthly cash flow, finance the purchase of a vehicle, medical devices and other necessities, or for pleasure pursuits like travel.”

A financial advisor or a mortgage broker can give you more details – and additional information is also available online at

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