These days, savings may not be what they once were and while unexpected expenses are a fact of life, extra costs during a time of rising inflation can present an even greater challenge. As we’ve seen with the events of the past few years it’s difficult to predict what may happen, but you can make a difference – and offer clients peace of mind – by educating them about reverse mortgage options.
The big picture
Faced with rising costs and stagnant income, retired clients may be tempted to withdraw funds from investment accounts. But that opens them up to tax implications and erodes their savings in the long term. According to Scotiabank, investing in a balanced portfolio, containing a mix of stocks and bonds, has a greater potential to outpace inflation and help build wealth over time – but in reality, people need access to funds now to manage their day-to-day expenses.
That’s where the CHIP Reverse Mortgage comes out on top as the savvier solution: borrowing money from the equity in their home saves clients from depleting investment accounts and prevents the possibility of OAS claw backs. Especially in their Golden Years, this is a critical consideration for clients 55+.
The CHIP Reverse Mortgage advantage
Reverse mortgages are becoming more mainstream in financial planning conversations for Canadian seniors, and the current economic environment is highlighting the savviness of this approach. The good news is inflation drives up the value of real assets, such as a home, but your client can’t pay the electricity bill or grocery shop with their depleting cashflow – unless you help them unlock the equity in their home.
During a challenging time, a reverse mortgage product helps alleviate some of the pressures of the current economic environment by providing that much-needed additional cash flow. With the CHIP Reverse Mortgage by HomeEquity Bank, Canadians 55+ can access up to 55% of the equity in their home tax free, and there are no monthly payments required. For those who prefer to receive monthly or quarterly advances, the Income Advantage product is a great option to counteract the rising cost of goods and services.