As tax period approaches, it's worth revisiting the tax advantages for this client base
This article was produced in partnership with HomeEquity Bank
With inflation on the rise, the need for higher cash flow is top-of-mind for most Canadians these days – including many of your retired clients who are looking for ways to maintain their desired lifestyles.
The 55+ demographic often look to their RRSPs, RRIFs, or investment accounts to boost their cash flow. Unfortunately, taxes become a consideration with both these options. Withdrawals from registered funds are considered taxable income and selling a non-registered investment that has risen in value counts as a capital gain. Both of these lead to a higher declared income, which can have a negative impact on income-tested government benefits, such as Old Age Security (OAS), that are relied on by many retirees.
The good news is, there’s an easy way to solve this common pain point and meet the needs of clients 55+: by offering them a CHIP Reverse Mortgage from HomeEquity Bank
The increasingly popular reverse mortgage solution
Canadians 55+ are Canada’s largest and fastest-growing demographic – and they have over $1 trillion locked in their home equity. A reverse mortgage is an innovative financial planning tool that helps Canadians access up to 55% of their home’s value. While homes are an asset class, withdrawals do not generate taxable events: the money your clients receive is a loan, isn’t added to their taxable income, and therefore doesn’t affect those critical government benefits. The extra cash can be taken as a lump sum or in monthly installments and used for a number of purposes. These include funding their retirement lifestyle, paying down debt, doing home renovations, or purchasing an investment property.
Using a reverse mortgage to tap into their home equity also means there are no monthly payments required – the loan is only repaid when they move or sell the home. It also allows your client to stay in the home they love, maintaining ownership and control of their greatest and most sentimental asset.
Holistic service
Boosting retirement funds and reducing taxable income are common desires among retired Canadians. Offering a reverse mortgage is an important part of providing holistic services that support your clients at every stage of their life.
In fact, 93% of Canadians want to stay in their houses as long as possible. Delivering solutions that provide your clients with tax-free cash flow helps preserve their lifestyle and keeps them in their beloved homes, allowing them the freedom to live the retirement of their dreams.
With tax season just around the corner, it’s worth revisiting the tax advantages HomeEquity Bank’s CHIP Reverse Mortgage provides clients 55+. For more information, contact a HomeEquity BDM today.
HomeEquity Bank has been dedicated to providing Canadian homeowners 55+ with smart and simple solutions for enjoying the retirement they deserve - in the home they love, for over 35 years. It understands helping your clients is your top priority, and HomeEquity Bank is here to help make that happen with a range of products including CHIP Reverse Mortgage, CHIP Max, CHIP Open and Income Advantage.
