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Women live longer so be sure to plan for it

(NC) If you're a woman born in the 1950s, two things are likely on your mind today. One, the prospects of retirement, and two, if you're living with a male partner who is the same age or older, you are facing the probability of outliving him.

According to Statistics Canada, the life expectancy of a female at birth in the 1950s was five years longer than a male at birth. No wonder women are constantly advised to save and invest funds aimed at a longer retirement. Good advice, even though it is easier said than done.

“There are other options if you envision yourself alone and haven't saved enough,” says Yvonne Ziomecki, a director with HomEquity Bank. “Instead of selling your house for the needed cash, why not stay in it and receive payments based on its real estate value? Accessing the equity in your home with a reverse mortgage like the CHIP Home Income Plan is a clever way to create a cash flow for the comfort and quality you deserve.”

Ziomecki explains how CHIP works:

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 to enhance your cash flow on a regular basis. Some homeowners do both.

“This financial tool can also make your savings last longer,” Ziomecki continued. “For example, using a reverse mortgage to provide additional cash income could help you delay the need for your non-registered investments. Or if your savings are in a RRIF, an alternate source of cash would prevent you from withdrawing money above the annual minimum. Both of these strategies will likely have tax implications, so be sure to work with a financial advisor for solutions that fit your needs.”

Additional information is also available online at www.chip.ca.

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