A survey conducted by HomEquity Bank has revealed that while many people have less than $50,000 in savings, most want to stay in their homes after they finish working.
HomEquity’s 2015 Retirement Study revealed that while 48% of those surveyed estimate that it will cost between $20,000 and $50,000 a year to live once they are done working, nearly 30% of those who are nearing retirement have just $50,000 or less in savings. In addition, 20% of both retired and working respondents expect to run out of money in five years or less.
While they may lack other investments, Canadians consider their homes to be one of their most important assets and are reluctant to sell, with 56% of retired and 47% of pre-retired respondents saying that remaining in their homes is "critical to their quality of life". In fact, 59% of retired respondents and 44% of the pre-retired indicated that they have “never even thought about selling."
Only 39% of retirees said they would be willing to downsize and use the real estate proceeds to fund retirement, and less than 30% are prepared to move to a less expensive city or town to generate income. “Nearly one fifth of the pre-retirees surveyed say they would use a home equity line of credit as a way to borrow against the value in their home,” concludes the report. “A reverse mortgage is the first choice for 15%. For the already retired, 14% say they would opt for a HELOC, with 10% choosing a reverse mortgage.”