Many of us remember those iconic words that were spoken by Capt. James Tiberius Kirk from on board the USS Enterprise. His monolog was a staple in the minds of all who had the pleasure of watching Star Trek. Well, today William Shatner the actor who portrayed Capt. Kirk is 85 years old and has an estimated net worth of $100 Million.
Although this topic is most likely not meant for him, I believe that for the majority of Canadians this is what retirement feels like.
Just like the Enterprise was supposed to explore space the final frontier and boldly go where no man has gone before this is what our retirement should be like.
Unfortunately, the reality could not be further from the truth, for most people retirement means that you have to sell your home to make ends meet and live the rest of your years either dependent on family or worse in poverty wondering how to put food on the table.
Last year I had the pleasure of meeting a couple who were in their early 70s. Although both were retired the wife was forced to work a part-time job so that they can make ends meet. The husband is a little bit older had to stop working due to increased health issues.
They proudly described their beautiful home to me and showed me pictures of grandchildren, their dream was always to keep their home that their children grew up in so that the grandchildren could enjoy the house as well. Unfortunately, the home became their prison. They still had a small mortgage left to pay off and the taxes were going up year after year. They went to the bank to request that the lender changes the amortization on the mortgage however due to a deteriorated credit profile from the husband’s ill health they were not able to make any modifications to the bank loan. If you listen to my radio show enough you have heard me say that a banker will always give you an umbrella when its sunny outside. But when it starts to rain they want it back.
With ill health, debt and financial lack looming over their head they believed they had no option other than to sell their home. They contacted our office to set up a meeting with a real estate broker.
After hearing the story I decided to step in and see if we were able to help them keep the house and alleviate some of the financial burdens.
They had worked hard their entire lives to make sure that their home would be paid off in retirement what they did not focus on was how they were going to live and what quality of life they would have.
When we started to dissect their finances the story that unraveled was one of stress and frustration, it was a story of a young couple who did everything to make sure that their children would have everything. It was also the story of a husband and wife who were in the last years of their life and they would not be able to enjoy them because of the financial burden. Instead of vacations, the wife was working.
The solution that I recommended for them was a Reverse Mortgage. The way that Reverse Mortgage works is it will allow you to liberate a large amount of money from the equity in your home without you ever having to make a payment towards the interest or the capital.
In the case of this couple, our solution was simple but it was one that changed their lives.
We gave them the money they needed to pay off the current mortgage that they had in full. We then gave them a float that would be invested and would be used to pay off property taxes on the home for the next 10 years. They took out an additional sum of money as a cash reserve that they would use to finally go on a dream vacation together. The last thing we did is we provided them with a monthly cash deposit in their bank account that was going to supplement their retirement income so that the wife no longer had to work. They left my office in tears they couldn’t understand why no one had ever explained this to them before. I explained to them that unlike a bank, I am not limited to one bank’s policies. As a broker, I can find solutions across various lender partners. This is what we do I told them we help people find solutions to life’s curve balls.
I had the pleasure of seeing both of them the other day. One year later what we set up for them has changed their lives. The husband’s ill health is all but gone and they are able to enjoy retirement fully as they always dreamed of.