Your Home Might Be the Most Overlooked Retirement Asset You Own
If you are a Canadian baby boomer, chances are you were raised with clear financial values. Avoid debt. Save diligently. Pay off your home. You did exactly that
Your Home Might Be the Most Overlooked Retirement Asset You Own
If you are a Canadian baby boomer, chances are you were raised with clear financial values.
Avoid debt.
Save diligently.
Pay off your home.
You did exactly that.
You worked for decades, reduced your mortgage, and watched your home grow in value. Today, many homeowners your age have little or no mortgage and a property worth far more than they ever expected.
Yet surprisingly, many retirees still feel financial pressure.
Let us talk about why.
Your Home Is Like a TFSA With No Contribution Limit
Most Canadians know that a TFSA is one of the best tools for tax free growth.
What many homeowners do not realize is that their principal residence offers something even more powerful.
The growth of your home value is tax free.
No capital gains tax.
No contribution limits.
No annual reporting.
If your home has increased by hundreds of thousands of dollars over the years, that equity belongs entirely to you. From a tax perspective, your home may be your largest and most efficient asset.
The Retirement Income Trap Few Talk About
Most retirees rely on a combination of CPP, Old Age Security, and withdrawals from RRSPs or RRIFs to maintain their lifestyle.
This feels logical. You saved the money. Now you use it.
But there is a hidden cost.
Withdrawals from registered accounts are fully taxable as income. In many cases, that income can be taxed at close to fifty percent.
On top of that, higher taxable income can reduce government benefits.
So while you are doing what you were told was responsible, you may be giving up more to taxes than you realize.
What If Some of Your Retirement Cash Flow Was Not Taxed
This is where many homeowners start asking different questions.
What if part of your retirement income did not count as income at all?
What if it did not increase your tax bill or reduce government benefits?
What if you could access money without selling your home or making monthly payments?
There is a strategy that allows some retirees to do exactly that by using a portion of their home equity.
The funds accessed are not taxable.
They do not affect CPP or Old Age Security.
There are no required monthly payments.
You remain in your home.
For many people, this is not about taking on debt. It is about using an asset they already fully own.
A Different Way to Think About Financial Independence
This approach is not for everyone. And it is not about spending recklessly.
It is about balance and flexibility.
Reducing how much you withdraw from taxable accounts.
Letting savings last longer.
Improving monthly cash flow.
Staying in your home while enjoying retirement more comfortably.
For homeowners who value independence and stability, this can be an important part of a well coordinated retirement plan.
The Question Worth Asking
The real question is not
Should I borrow money in retirement
The better question is
Am I using my assets in the most tax efficient way possible
For many Canadian retirees, the answer starts with looking at their home differently.
If this made you pause, that is a good thing.
Sometimes the smartest financial tools are the ones we were never taught to consider.