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Thinking
About Retirement?
Time to Re-examine Your Goals
by
Irene Segal
DETERMINE
YOUR NEEDS AND INTERESTS
Before you begin to make decisions, you will want to sit down
with your financial advisor and survey your overall financial
situation to get a clear picture of your available, financially
feasible options.
A competent
professional financial advisor will have the tools to help you
with this process. Together you will examine the real cost outlay
involved in retirement plans to determine how much money you will
need in order to retire in the style you desire as well as the
projected income levels you will receive from all sources including
pensions and investments
Finances are
not the only factor. If you have no current health problems, maintaining
your present home may be practical. If you desire to downsize
for any number of reasons then your financial advisor will review
your options with you.
One discreet
financial advantage to downsizing is the potential for generation
of income through investment of the capital you receive from the
sale of your home. Selling your home could result in a windfall
that you could invest for regular returns to supplement your already
existing retirement income. This can be a very appealing concept
if projected income from your retirement nest egg does not match
your projected spending plans.
1. THE
RANGE OF POSSIBILITIES
Your goals for retirement, your expected income and expenses,
your health are all factors as is the retirement lifestyle you
want. The range of possibilities includes downsizing, buying or
renting a condo or apartment, doubling up on summer and winter
homes.
2. LAST
DITCH SOLUTIONS:
Some seniors reach retirement without adequate financial resources.
The home may be their sole large asset. Seniors in this situation
may find the idea of a reverse mortgage attractive, as it is a
way to generate cash flow. With a reverse mortgage, the bank issuing
the mortgage gives the homeowner a loan which is used to purchase
a life annuity that provides an "income stream " to
the homeowner who remains in the home while the interest owing
on the loan builds up against the property. Upon death, the homeowner's
estate repays the loan plus interest out of the proceeds of the
sale of the home.
This concept
does have major disadvantages as the homeowner continues to have
home maintenance expenses, income generated may not be high enough
and the homeowner might be better selling the house and investing
its full value. In addition interest on the loan must be paid
back by the estate, which may leave little left for any heirs.
3. SECURE YOUR FINANCIAL SITUATION TODAY
Ultimately, your decisions about your retirement home will depend
on two factors: your financial situation and how you want to spend
your senior years. You're financial advisor
will work with you to secure your financial situation today, so
you will be far more able to make your choices in the future based
on what you really want to do and not only on what you can afford.
Financial Planning & Wealth Management,
Investors Group, Regional Office
416-491-7400 x 529
email: irene.segal@Investorsgroup.com
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