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Explore Your Downsizing Alternatives

Sept. 27, 2012
3 mins
An older couple play with a dog as they sit on the couch

Last week I talked about the benefits of downsizing in retirement. Selling the family home, however, isn't a one-size-fits-all solution. For some, the decision is extremely difficult - there are so many memories tied to that address, it's where you raised your family, had countless birthday parties and waved a tearful goodbye as your kids left for university.

Money is not always the only factor to consider. Carefully weigh your options and choose the situation that works best for you in your retirement. If you want to stay put there are some choices to consider that will keep you right where you are and put some money in your pocket.

Create An Income Suite

Adding an apartment to your existing home can put thousands in your pocket every year. If you have a basement with separate access, consider renovating it into a legal dwelling. The cost to do so can be small and the return on your investment can be substantial depending on where you live. Before you start knocking down walls and adding extra plumbing, though, check out the rental apartments in your area are demanding and how much adding it will cost you.

Consider A Reverse Mortgage

A reverse mortgage is a method Canadians 55 and older can use to access 50% of the equity in their home without moving. The homeowner can tap the equity, like a revolving credit line. For example, a payment means reduction of the line of credit and withdrawing money accrues interest that is added to the mortgage balance. Interest payments are due with you die, sell your house or move out permanently. Keep in mind interest rates on reverse mortgages are higher than those on traditional mortgages or credit lines.

Join Forces With Your Kids

For some parents, having your kids move back might feel like you’re going in reverse - but this move could be a money saver for everyone. The reality is home prices are out of reach for many young families, as is the cost of daycare.  Consider having your children move into your house. Rather than charging rent, have them pay for the cost of running the house in the exchange offer to watch their kids while they’re at work. By joining your efforts in this extended family situation everyone can save money.

Consider A Home Exchange

By joining a reputable home-sharing network you can swap your household for another halfway around the world. Imagine connecting with someone in Sydney or Hawaii and switching homes with them for several months.  A home exchange takes a great deal of trust that your home will be treated well and the house you are getting is a good quality one - but it can be an economical way to see the world and live in many places throughout the year.

Before You Sell

Even though downsizing can unlock a lot of equity, it can also leave a person with a feeling of emptiness and longing to be back in their old home. The home you spent years raising a family in has intrinsic value you won’t find anywhere else. Before sticking a “For Sale,” sign on your lawn, imagine your life outside of that home. Will you be happy, will you be close to the ones you love and spend time with and most importantly is it what you really want.

Rubina Ahmed-Haq

Rubina Ahmed-Haq is a financial journalist and personal finance expert with more than 15 years of experience. Her career spans three continents with appearances on TV, radio, print and online. She is the Finance Editor for HOMES Publishing. You can also read her columns in CondoLife and Active Life. Rubina runs the website She has also contributed on personal finance matters at The Toronto Star, The Globe and Mail, National Post, CTV Newschannel, Mississauga Life Magazine,, OurKidsMedia, CAA Magazine, South Asian Focus TV, ANOKHI Magazine, Bridal Fantasy Magazine, Canadian Running Magazine, FRESH JUICE magazine and NEWSTALK 1010.

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