Smiling senior couple sit with a lawyer around a table looking at a laptop


Do your clients need help funding their retirement? As inflation eats away at savings and the markets remain volatile, the economic climate makes it challenging for retired Canadians to access a consistent stream of cashflow they need to fund their desired lifestyles. And it’s not just today’s economy that is causing concern. Canadians are also living longer lives than ever before. According to StatCan, those who retire at 65 can expect to live an additional 20 years – and probably longer when you factor in advances in health care. In other words, your client’s retirement savings will probably need to last 20 to 30 years. Are they prepared?

Traditional sources of retirement income

For most Canadians, sources of retirement income will include a mix of savings (Non-Registered, RRSPs, RRIFs, and TFSAs), along with government and company pensions. If an individual were to start taking their government pensions (Canada Pension Plan and Old Age Security) at age 65, they may receive less than $2,000 a month today.  Moreover, four in 10 Canadians do not have company pension plans to fall back on, and the latest figures show that the average amount saved in registered plans for those aged 55-64 is about $100,000. This means that some of your clients in or near retirement will probably face an income shortfall at some point, especially with inflation running at 6% today.

Unlocking home equity with a reverse mortgage

One advantage older Canadians do possess is home ownership, with more than 70% owning their own homes. In fact, their homes are one of your client’s biggest assets, with over 40% of their net worth tied up in home equity. Downsizing their homes is one way for older Canadians to tap into this equity, but this option is much less attractive. Downsizing often means a new city or town, and leaving the community, friends, family, and routine that your clients love. In addition to the emotional impact of selling, many homeowners are unaware of the true cost of downsizing. There are real estate and legal fees, land transfer tax, moving expenses, furnishing and upgrades, potential condo fees and more. According to a study conducted by HomeEquity Bank, more than 90% of Canadians want to retire in their current homes.

That’s why the CHIP Reverse Mortgage by HomeEquity Bank has become an important financial option. This unique income solution allows Canadian homeowners 55+ to access up to 55% of their home’s value and turn it into tax-free cash without moving or selling. Plus, there are no monthly mortgage payments while retirees live in their homes. Additionally, it is easier for Canadians 55+ on a fixed income to qualify for a reverse mortgage than a home equity line of credit or private loan. The full amount only becomes due when the home is sold, if they move, or through their estate if they pass away.

With the CHIP Reverse Mortgage, homeowners can choose to receive the funds as a lump sum, or in regular monthly deposits. They can use the cash for any of their financial needs, including health care costs, home renovations, debt consolidation, or lifestyle expenses.

The CHIP Reverse Mortgage also comes with a No Negative Equity Guarantee*, so your clients will never owe more than the fair market value of their property when they move or sell – an important safeguard in today’s economic climate.

Financial planning benefits: Help clients help themselves

Having access to tax-free cash flow provides many financial planning benefits to your clients.

  • Because they are unlocking home equity, the funds are not added to their taxable income and do not affect income-tested government benefits such as Old Age Security (OAS)
  • Your clients don’t have to sell investments in a volatile market
  • They continue to live in the home they love while participating in any market appreciation of their property. Plus, preserving client investment portfolios helps you maintain your assets under management

Ready to help your clients take a holistic look at their retirement income options with the CHIP Reverse Mortgage? Visit us online to learn more or contact a Business Development Manager today.

*As long as you keep your property in good maintenance, pay your property taxes and property insurance and your property is not in default. The guarantee excludes administrative expenses and interest that has accumulated after the due date.