I’m Sandra — a 65-year-old starting her retired life in Newmarket, Ontario. I’m so excited to enjoy more time with my husband in our peaceful, paid-off home. I’ve worked hard all my life — the majority spent as an administrative assistant for various real estate agencies and marketing firms. We’ve been married for thirty years, a few of them harder than others. But at this point, our three kids have left the nest and finally found their way.
My two eldest work fancy tech jobs in Toronto. One’s a product manager in fintech and the other works for a cybersecurity firm. Both are very stable.
My youngest lives a more nomadic lifestyle, freelancing as a photographer. Bless his heart — he doesn’t ask us for money anymore, but I still like to toss him a couple hundred dollars when he visits over the holidays.
He and my middle child actually lived with us for much of their 20s, taking a little extra time to find their footing. I won’t lie — our utility and grocery costs were quite high when they were here, but I didn’t mind. It felt great helping them. But the 10 years of expensive hockey practice when they were kids? I could have done without those hefty bills and early mornings.
But now, things are falling into place. I mean, our house is paid off!
However, we don’t have much savings to our name.
Unfortunately, my husband battled kidney cancer for almost a decade. Our health coverage took care of the treatment bills, and he did receive sickness benefits. Still, our income didn’t cover too much past groceries and the mortgage.
Thank God, his cancer is in remission now.
We dipped into a solid hole of credit card debt for additional expenses. Two of our three children took a little longer to leave the nest, and they needed some support for their first apartments in the city. We helped them out here and there, and now they’re doing just fine. This hampered our credit card balances, but a frugal lifestyle helped us pay it back shortly after my husband recovered.
We’re not in the red, and I’d say our house puts us in the green. But our monthly income is limited to CPP and OAS, no pensions. We have about $25,000 in RRSPs that we’re converting into RRIFs, though they won’t make much of a dent when converted to monthly income.
Now, we just want to live a little!
We’re happy spending time at home, but it would be great to have more monthly income to play with and truly enjoy this later stage of life.
So, we decided to take out a reverse mortgage. I originally protested the idea, as I wanted to leave the home in full to our three kids. But my husband reminded me that they’re happy and able to support themselves now.
We won’t have the house when we’re gone, but at least we’ll have a superb monthly income to enjoy our final years with. I signed on for a travel rewards credit card that I can pay off in full each month with our monthly income. And we collect the points to save on flights because we’d like to travel. Our first couple’s vacation in decades will be in The Bahamas!
A credit counsellor’s opinion on Sandra’s situation
Despite the reverse mortgage making it more difficult for the kids to inherit their house,, Sandra and her husband can enjoy quite a comfortable lifestyle in their retirement. A reverse mortgage on a near-million-dollar home provides enough creature comforts for a couple that doesn’t have to worry about mortgage or rent bills.
This is more than we could say for the average Ontario senior, whose income sits under $30,000.
If they didn’t want to opt for a reverse mortgage, they might consider selling the home and moving to a town or province with even lower living expenses. The average Newmarket home is worth over $1,000,000, so they could get away with moving somewhere cheaper and still maintaining an asset to leave to their kids.
However, seniors like Sandra might not want to move far from their kids. We respect Sandra’s decision to choose the reverse mortgage and applaud her due diligence in avoiding credit card debt.
If you ever require credit counselling services to tackle debt or budgeting concerns, Credit Canda’s certified credit counsellors are here for you.