“Boomers” are generally classified as anyone born between 1946-1964, aged 54 to 74.

75% of Canadians over 65 own their own homes and 93% of those want to age in place through their retirement.

Background and Part One

I am 68 years old and a “Boomer” I have been involved in Banking and Mortgage Financing right out of school at the age of 19. I was a banker for 18 years and I have been involved in the mortgage brokerage industry for almost 30 years as a broker/owner and now as an agent working for my daughter and her three partners.

My banking experience gave me a good background in personal and corporate finance but more so, experience in how the Bank’s policies always reflect on profitability and not on the client experience or what is best for the client.

My brokerage experience has been in direct contrast to what the Bank’s policies dictate. We are the consumer advocate and have been for 30 years! Because we have the choice of a number of lender brands, as opposed to representing just one, we can shop that market for the most suitable financing that benefits the borrower, not the lender.

As a “Boomer” I have lived through 12-20% mortgage rates, recessions, wild inflation, low inflation and a wide range of economic conditions and swings.

 I bought my first home for $44,500, a princely sum considering my income, at that time. I have bought and sold investment properties. I have a recreational property I like to call the “Cash Pit”. I have a home that is paid off. Our children have married and have children of their own and they both have their own homes. I have dealt with the retirement choices of my parents. I have dealt the sale of my parent’s home and moving a mother with dementia back to Canada. I have dealt with retirement homes and nursing homes.

There are now more ‘Boomer’s than there are children under 16. We are living longer. I am a "Boomer" and we have done our downsizing research. I have helped other "Boomers' with their lifestyle direction, choices and financing options.

What follows is the culmination of all of the above experience in the lifestyle choices facing “Boomers’. I will cover all of this from the perspective of downsizing, housing options and the financing options available to “Boomers” in this 4-part series.

What are “Boomers” Facing?

Now the only difference between myself and most “Boomers” in a similar situation is the financial lending experience that can help me shape a direction or find solutions to some problems that Boomer’s face in downsizing. Other than that, we are all faced with the same decisions and questions and our economic circumstances will be the variable factor.

Our journey into downsizing is probably similar to many other “Boomers”. The major difference between us would be our location and market. Boomers in major markets have seen substantial increases in their equity. As a result, many have chosen to move to Kingston and the surrounding area because of the price of our real estate and our location: central to Ottawa, Montreal, Toronto and a short hop to the US. We are on Lake Ontario and in the midst of some of the best lake country in all of Canada. Those of us lucky to be here already may want to stay in our home or downsize.  Kingston has also seen significant price appreciation, but it is still one of the most affordable cities in Canada for what it has to offer.

In a recent survey, 93% of senior homeowners want to stay in their homes but some don’t know if they can afford to do so. Rising taxes, maintenance and the cost of living is eating into pension income. Guaranteed pension incomes are not as guaranteed as they once were and unless you have a government pension, some may find their pension income has decreased or is not keeping up with inflation and higher costs.

Some people still have a mortgage, or they may have their house free and clear but have accumulated costly credit card and line of credit debt where the payments are eating into a tight budget and the debt repayment is on the “Never, never plan. With interest rates increasing those costs are eating further into already tight budgets.

We are all living longer, and health care is another consideration. Those that stay in their homes may face costs for in-home health care or caregivers or these costs may fall on their families.

Those that stay in their homes may also want to update or renovate their home but find they do not have the free cash to do so.

Some Boomers have enough equity in their home to be able to purchase or assist with the purchase of retirement lifestyle initiatives. Travel, Snowbird rentals, vehicles, new furnishings could be on that list.

Some people want a better retirement lifestyle but don’t have the income to do that.

Some people with equity want to assist their families with an early tax-free inheritance but don’t want to use liquid or registered assets to do so.

Boomers have lived through 12-20% interest rates and we were all taught to pay off our mortgages, so we are very averse to going into mortgage debt. We were never taught “Good Debt” and “Bad Debt”

Many “Boomers” have had some type of financial planning, but many have nothing more than their pensions and the equity in their home. For some facing financial hardship, their only choice is to sell their home and rent. In Kingston, that means a monthly cost of $1600 or more.  With a less than 1% vacancy rate, it also means a difficult time finding a place to live. The adjustment to apartment living from having a home is also a major hurdle for many seniors. If their home is close to family, it also presents another huge adjustment in moving.  So, what do you do?

Do you Stay or Do You Go?

For us right now, our choice is to stay in our home. We are among the 93% of seniors who have chosen this route. It is not what we ultimately want in a retirement home, but it is a good home with a great location. Our primary consideration is our proximity to our children and grandchildren, access to shopping and health services. Our current home backs on to parkland is close to all shopping and an easy drive anywhere and that is hard to find in the downsized market. There are other options but we have found they are more costly in the new market and in the resale market may require additional renovation further eroding our equity or requiring a small mortgage.

For others, with family out of town, they may choose to move closer to them. Others may choose to buy their “ideal” retirement home. The choices available to them will mirror our market and may be more expensive if they are in a major market.

The choices for downsizing vary and in almost all cases, you will sacrifice something.

Semi-detached home, townhomes and condo’s all have their good and bad points and single-family homes, designed for downsized “retirement style” living can be as expensive or more expensive than the home you currently own. ” In law” style suits are gaining popularity where families share housing accommodation. For some, it is the ideal solution, but it also can have its own particular challenges and adjustments to independent living.

Thoughts that Have Run Through our Minds and Probably Yours?

1)Home many more years do we plan to keep the home?

2)If we stay, what do we wish to renovate or what can we renovate that will have a positive effect on its future resale value?

3)If, at some point, we are not able to handle home maintenance and upkeep, what will it cost us to hire somebody to assist us? Is that in our retirement budget.?

4)Is there any cost saving in alternative accommodation if we sold our home?

5)What do we want our lifestyle to be like in retirement and can we afford that on future retirement income?

6)What are the options to increase our retirement income?

7)For those people with debt or an existing mortgage, they may be asking if there is a way to lower their payments and/or liquidate debt, without selling.

8)How do we deal with health issues if they arise and what burden would it put on the immediate family?

9)If we can access the equity, how much can we get, what will be the cost and how can we best use the funds?

In Part #2-we will further examine,in detail, the housing options available to “Boomers”