Majority of Canadians aged 45-54 fund family while racing to secure their own retirement
More than half of Canadian homeowners aged 45 and older say much of their wealth sits locked in their home rather than in cash or savings.
A national survey EQ Bank released during Seniors Month points to a growing tension reshaping how older Canadians fund retirement.
The survey found that 56 percent of respondents feel their wealth is tied up in their home, while 31 percent said home equity will be or already is an important source of retirement income.
EQ Bank pointed to reverse mortgages as an option for plan members weighing how to draw on housing wealth.
Zamina Walji, vice president of decumulation businesses, said reverse mortgages are an "underused solution" for older Canadians looking to tap housing wealth and age in place.
The predictable retirement pathway Canadians once relied on, she said, had "rapidly changed," leaving many without a clear plan.
Recent economic changes are weighing on those approaching retirement.
Over half (53 percent) of homeowners aged 45 and older had their retirement savings negatively impacted by economic uncertainties over the past year, while 61 percent worry about being financially comfortable in retirement.
Nearly one quarter (24 percent) of respondents who expect to fully retire are not confident they will have enough money to live the retirement lifestyle they pictured.
Those pressures are pushing 69 percent of older Canadians to cut expenses, the survey found.
Respondents are curbing spending on pricier food and groceries (39 percent), discretionary purchases (39 percent), charitable donations (30 percent), hobbies (28 percent) and necessary healthcare services such as dental, vision or physiotherapy (14 percent).
The “sandwich generation” faces added strain.
Among respondents aged 45 to 54, 68 percent are financially supporting family members, including children, adult children and aging parents, and 58 percent of that group said it has directly affected their ability to save for, plan for, or live comfortably in retirement.
Knowledge gaps persist.
Six in 10 (60 percent) respondents said they would like to better understand their retirement options.
Among those who have heard of reverse mortgages, 53 percent believe the lender takes ownership of the home and 45 percent believe a homeowner could end up owing more than the home is worth, both of which EQ Bank said are false.
