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How make a smaller space more livable

28 Jul

By Sheryl Smolkin

Whether you live in an apartment or a house, chances are that as your family grows or you accumulate more stuff, you will start to get the itch to move to a bigger place. But moving costs money, particularly if you have to sell one house or condo and buy another to upsize. And then you are stuck with higher mortgage payments plus increases in taxes, utilities and insurance.

So before you make an irrevocable and costly decision, think about what you can do to make your current arrangement more user-friendly. After all, if you are a fan of the reality show Love It or List It you know that re-purposing space and clever renos can often work unexpected miracles.

Here are some suggestions:

  1. Declutter: Go through your stuff at least once a year and sell or get rid of what you are not using. If your garage is crammed full of baby carriages, tricycles and hockey nets you are keeping “just in case” you have more kids or your grandchildren will use them, think again. Remember, everyone else’s garage is full of stuff you can get for practically nothing if you ever really need items like these again
  1. Re-decorate: Think smaller and lighter. Get rid of heavy and non-functional furniture. Use light colors. Pull furniture away from the walls.
  1. Maximize vertical space: Take advantage of wall height by adding tall bookcases, cabinets or shelves, or by hanging hooks for jackets in the hallway.
  1. Storage: Capitalize on storage space in every possible way. Buy beds with storage drawers. Use closet organizers and double hang clothing. Build in drawers and shelves into closets. Turn little used alcoves under stairs into efficient cupboards.
  1. Multi-purpose: Make rooms multi-purpose. A spare bedroom can double as an office. A master bedroom with a Murphy bed can be used as a sitting room when the bed is put away. Buy multi-functional furniture, such as ottomans, which can be used as both a coffee table and extra seating. Furniture that can be folded, stacked, or wheeled away is your friend.
  1. Lighting: Don’t take up precious floor or table space with bulky lamps. Lamps can be hung from the ceiling or pot lights with dimmers can often be installed. Mirrored walls or closet doors will make rooms look bigger.
  1. Basement renovation: If you house is 1200 square feet on one floor and your basement is unfinished, you may be able to double your living space by renovating the basement. Add another bathroom, bedroom or spruce up your laundry area. Build a family room, a home office or a kid’s playroom.
  1. Build up or out: Depending on the zoning in your area and the size of your lot, add another story or build on to the back of the house. This kind of renovation is more costly and will require working with an architect and a contractor. You may also have to move out for several months. But the finished product will be like a brand new house.
  1. Open concept: Take down non-load bearing walls to open up the main floor. Go for a continuous living room/dining room, kitchen, den that will give you more room to work or play.
  1. Kitchen/bathroom reno: If you are unhappy with your current house, chances are the kitchen and/or the bathroom are bothering you the most. A vanity with double sinks can relieve morning and evening congestion. A new kitchen with an island breakfast bar can increase working space for family chefs and get rid of the need for a kitchen table and chairs. Kitchen and bathroom renos are routinely included in lists of projects that will increase the re-sale value of your house.

If you have considered all of the options above and still believe investing in a larger home with the features you need is the way to go, consider looking for a home with a separate entrance that can accommodate a rental unit. The additional income will help you better afford your new digs and pay off your mortgage faster.

Legal Tips for Saskatchewan Renters

21 Jul

By Sheryl Smolkin

In Part 1 of this series for renters we looked at things to consider when you are looking for a rental property. Part 2 will focus on the legal rights of landlords and tenants in Saskatchewan. These legal obligations are prescribed in The Residential Tenancies Act 2006 and The Residential Tenancies Regulations 2007.

First of all, it’s important to understand the types of accommodation that are not covered by these rules. For example, if you are living in a school dormitory, hotel, motel, cottage or resort home rented for less than six months, these properties are excluded from the protections and responsibilities outlined in the legislation. Other exclusions are health care facilities, personal care homes and farm homes rented by people cultivating the land.

Here are some FAQs and answers about the rights and responsibilities of Saskatchewan landlords and tenants.

  1. Do I need a lease?
    You and your landlord can mutually agree to a fixed, periodic, month-to-month or week-to-week type tenancy and a signed lease is not required for periodic leases. A fixed term lease of more than three months has to be in writing, must detail the date on which the tenancy expires and, must contain the provisions required by the Residential Tenancies Act. If the lease is written out, your landlord is required to give you a signed copy within a period of 20 days of when it is signed.
  2. My future landlord wants a two month security deposit? Do I have to give it to him?
    No. Deposits that are collected by the landlord cannot exceed one month’s rent and they can be used to cover the cost of damages to the rental property. Your landlord can demand a security deposit, but only at the beginning of the tenancy. It is also unlawful to charge tenants key money.
  3. My one year lease is expiring. Do I have to give notice that I am leaving?
    Term leases always expire at the end of the set term. Your landlord has absolutely no obligation to give notice to vacate at the end of the period, nor do you. However, your landlord is required to provide you with two months of advance notice when telling you whether or not he is willing to renew your lease, and if the landlord is willing, he must provide you with the terms of the new lease.
  4. What if I want to break my lease early?
    You can end your tenancy by simply giving the follow notice:

    • A minimum of one month’s rent before the day of the month on which the rent is payable for a month-to-month tenancy
    • A minimum of one week before the day of the week on which the rent is payable for a week-to-week tenancy
    • One day’s notice if the landlord is in breach of a “material” term included in the rental agreement (for example, if the unit is in a state of disrepair and considered uninhabitable). In these circumstances, notice that is given must provide the reason the lease is being terminated, and if the breach can be remedied, you are required to give the landlord a reasonable amount of time to fix the breach before ending the tenancy.
  5. My landlord told me I have to leave in 15 days. Is that legal?
    It may be if your rent or utilities have been overdue for at least 15 days. Otherwise, a landlord may end a tenancy for any of the causes set forth in s.58 of the Residential Tenancies Act (i.e., repeatedly late paying rent; unreasonable number of occupants in the unit; putting landlord’s property at significant risk etc.) by giving the following notice:

    • At least one month before the day of the month on which rent is payable for a month-to-month tenancy.
    • At least one week before the day of the week on which rent is payable for a week- to- week tenancy.
    • Earlier upon application to the Office of Residential Tenancies.

    The landlord must give you a reasonable period of time to fix the cause for which the tenancy is being terminated if the reason can be remedied. You may dispute the notice by giving notice to the landlord within 15 days after receiving his notice.

  6. Can I sublet my unit?
    If your tenancy is for a fixed term, you can sublet the property with the landlord’s written consent, and the landlord can only withhold consent when it is considered reasonable to do so. The landlord can charge you a fee of no more than $20 for considering or consenting to the sublease.
  7. I just moved in five months ago and my landlord wants to raise the rent effective immediately. Do I have to pay the increase?
    You do not. Landlords are required to give one year written notice of a rent increase in the event of a periodic tenancy, unless they are a member in good standing of the Saskatchewan Rental Housing Industry Association (SRHIA), in which case the landlord can give six months’ written notice of a rent increase. If a landlord ceases to be a member in good standing of the SRHIA during the six-month notice period, the notice given by the landlord will take effect after 12 months rather than six, and the landlord is required to inform the tenant of this in writing. Rent may be increased only once each year, unless the landlord is a member in good standing of the SRHIA, in which case rent can be increased twice each year. No notice of a rent increase can be served within six months of the start of the tenancy or the date of the last increase, whichever is later. Public housing authorities as well as non-profit corporations are exempt, as rent may vary with income.
  8. Can my landlord enter my apartment when I’m not home?
    Your landlord can enter your rented unit in the event of an emergency, or if you agree. Otherwise, the landlord is required to provide you with 24 hours advance notice in writing for entry that takes place between 8 a.m. and 8 p.m. specifying a four hour period when they will be entering the premises.If you have provided a notice to terminate the lease, your landlord is allowed to show the property with your consent, or as may be agreed in writing with you or after the landlord has made a reasonable effort to give you two hours advance notice.
  9. Can I withhold rent for repairs?
    It is not legal for you to withhold rent for repairs and may warrant an eviction for nonpayment of rent. If you have requested that the landlord make certain repairs and the landlord has not done so, you have two options other than withholding rent.The first option is to bring an application to the Office of Residential Tenancies for an order directing the landlord to do the repairs, and you may ask for a reduction of the rent until the repairs are completed.The second option you have is to contact municipal authorities to determine if any local bylaws that set minimum standards for rental properties have been broken. If so, you can ask for the property to be inspected by an official. If officials find any repairs that need to be done, an order will be issued to the landlord to fix the problems immediately.
  10. Can a landlord  refuse to rent to me because I have a cat or I smoke?
    Yes. Pets are permitted in the rental unit only if they are explicitly allowed in the lease or if the agreement does not address this issue. The landlord can also include a no-smoking cause in the lease.

For general information about renting in Saskatchewan contact:

Office of Residential Tenancies
120 – 2151 Scarth Street
Regina, SK
S4P 2H8
Toll-free: 1-888-215-2222 (within Saskatchewan)
Toll-free fax: 1-888-867-7776 (within Saskatchewan)
Tel.: 306-787-2699
Fax: 306-787-5574
http://www.justice.gov.sk.ca/ORT
See Web site for contact information for all offices.

 

What you need to know before you rent an apartment

14 Jul

By Sheryl Smolkin

We’ve written several articles about the ins and outs of home ownership, but in fact Statistics Canada reports that 31% of Canadians rent. And although 82.4% of couple-family households own their dwelling, only 55.6% of lone-parent households have purchased a residence and less than half (48.5%) of non-family households own their own homes.

While at first blush, finding and renting an apartment may not seem particularly complicated, if you’ve ever had a terrible rental experience you probably asked a lot more questions the next time around.  So in order to give renters some food for thought, this week we present the first of a two-part series on “what you always wanted to know about renting an apartment but you were afraid to ask.”

  1. Location, Location, Location:
    A perfect apartment is not perfect if it is miles from work and family and not on a regular transportation route. Also, check to see if there are easily accessible grocery stores, a drugstore, schools and places of worship.
  2. Paying the rent:
    Make sure you can afford the rent. The landlord may have you fill out an application, do a credit check and ask you for references. One rule of thumb is that you should budget 25%-30% of your income for rent. Typically you will have to give a first and last month’s rent when you move in. If you are a student, a parent may have to co-sign the lease.
  3. What the rent covers:
    Ask about any additional charges for utilities or cable TV. Find out if you are entitled to a locker and or/parking or if there is an additional charge. Do you get a guaranteed parking spot? Is it indoors or out? Do the window coverings and the microwave stay with the apartment or go with the current tenant? How much does it cost to use the laundry machines?
  4. Fuzzy and Fido:
    Do you have devoted pets who are members of your family? Don’t take for granted that dogs or cats are allowed. Even if you have a very small, quiet, dog you will have to take him out several times a day and there is always a nosey neighbor who will notify management that you are breaching the lease.
  5. Property inspection:
    Make sure you get to inspect your unit before you sign on the bottom line. Check for leakage, insects and that all the appliances work. Test the faucets, hot water, the shower and the toilets. If you see any damage, take pictures and inform the landlord before you sign the lease. If possible, get it in writing when necessary repairs will be completed.
  6. Building maintenance:
    Is the building clean and in good repair? What condition is your unit in? Is there a superintendent in the building you can easily contact if you suddenly have no hot water or your refrigerator stops working? Ask other tenants about their experience.
  7. Decorating your apartment:
    Can you paint or wallpaper your apartment? Will you have to repaint it “boring beige” before you leave? What if there are holes in the wall from picture hangers? Will your last month’s rent act as a security deposit? In what circumstances can the landlord refuse to return all or part of your security deposit? Can you change the locks or put additional security locks on the door of your unit?
  8. Renter’s insurance:
    These days everybody has computers, tablets, TVs and other very portable electronics. Regardless of how good you think the apartment security is there is always the risk that your apartment will be broken into or your possessions destroyed by fire. Invest in a comprehensive tenant’s insurance package.
  9. Roomies:
    You may need to rent out a room in your apartment to help pay the rent. Does your landlord have to approve the roommate? Does the roommate have to co-sign on the lease? Are you responsible for the full amount of the rent if your roommate packs up and leaves in the middle of the night? Can you list the apartment on Airbnb?
  10. Other misc. questions:
    Can you barbecue on your balcony? Can you store your bike on the balcony? Can you control the heat? How do you let somebody into the building? Are there overhead lights or enough convenient outlets to plug in lamps and other appliances? Is there Wifi in the building? How is the cell phone reception? Where do you dispose of garbage? Is the building noisy? Is there a history of vandalism in the building or the area?

Next week we will talk about the legal rights of landlords and tenants in Saskatchewan.

 

8 reasons for taking your vacation in Canada

16 Jun

By Sheryl Smolkin

An article I read in the Globe & Mail this week noted that the Canadian tourism industry is grappling with a demographic problem that could threaten its future. Apparently millennials are spending far more of their travel dollars outside the country than at home. One reason cited is that it is so expensive to fly within Canada, it makes sense to go further afield.

I can understand that most of us would love to be able to jet off somewhere warm to get away from our frigid winters. But in spite of seasonal mosquitoes and black flies in some parts of the country, Canadian spring and summers at their best are not to be missed.  So in the hope of persuading more of you to spend at least a couple of vacation weeks a year exploring closer to home, here are eight reasons in no particular order why I think you should consider some domestic travel along with the international adventures on your bucket list.

  1. Mobility rights
    You don’t need a passport or a visa to travel from one end of our vast country to the other. With the exception of arcane laws forbidding the import of alcohol between provinces, you can buy anything you want and take it home without worrying about declaring your goods or paying duty. Medicare insurance coverage varies from one province to another, but your health card will generally be accepted across the country. Nevertheless, travel insurance is still a good idea to fill in any coverage gaps like air ambulance in the case of illness or an accident.
  2. See Canada first
    Tourists come from all over the world to see our country, but many of us are looking for “exotic experiences” elsewhere. The fact is that every region in Canada has its own unique attractions. Unless you have seen the snow-capped Rockies, skated on the canal in Ottawa or visited Peggy’s Cove you cannot fully appreciate the beauty of this diverse country and how well it compares with foreign destinations.
  3. They speak your language(s)
    Travelling in Canada can be so much less complicated than going to Europe or Asia because you don’t have to worry about making yourself understood. Even if you decide to visit Quebec, most of us studied some French in school and can get by. And if Air Canada loses your luggage or you need to see a doctor for an unexpected ailment, you will be able to explain the problem without the benefit of an interpreter.
  4. Spend Canadian dollars
    In January of this year, the Canadian dollar sunk to new lows. It has bounced up and down since then, but the fact is if you have to exchange it for U.S. dollars or euros to pay for a trip, it’s going to cost you a lot more than a few years ago. It’s a great time to see your country and support our economy.
  5. Meet great people
    Whether they live north, south, east or west, your Canadian neighbours are great people. They will go out of their way to show you around, invite you into their homes and make sure you have a terrific visit. With few exceptions, you can feel confident that whether you travel alone, with a companion or as part of a family you are vacationing in a safe, welcoming place.
  6. Festivals and special events
    Theatre, music, comedy, film and literary festivals abound. Whatever you are interested in, you can time your visit to catch concerts and live performances. Here is a listing of the top ten summer music festivals in Saskatchewan, but from the Symphony Splash in Victoria B.C. to the Stratford Shakespearean Festival in Ontario to the Shelbourne County Lobster Festival in Nova Scotia there are hundreds of local events across the country you can plan your vacation around.
  7. The great outdoors
    Frequently whether we travel at home or overseas, we just fly from one city to the next. But there are about 2.6 million lakes and 5 mountainous ecozones in Canada. To really see the country, get into your car and drive in any direction. Whether in a tent, yurt, airstream, pod, igloo, hut, villa, cabin, cube, teepee or treehouse, camping or glamping (upscale camping) are excellent ways to experience the great outdoors.
  8. Multi-cultural cites
    Canada recently welcomed over 25,000 Syrian refugees. That is in addition to the thousands and thousands of immigrants and refugees from all over the world who have found a home here over the last 149 years. As a result, you can sample the cuisine and experience the culture of their homeland right around the block or down the street. Within walking distance of my house in Toronto I can eat Chinese, Indian, Iranian, Japanese, Hungarian, Korean, and Greek cuisine and then head over to a Jewish delicatessen.

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Do you have a Canadian vacation planned this summer? Send us your favourite pictures with a short paragraph telling us where you went and describing the high points. With your permission, we’d love to share your images and your story.

10 questions to ask before your wedding

9 Jun

By Sheryl Smolkin

According to weddingbells 65% of weddings in Canada take place between June and September with 25% of weddings taking place in the month of August. I don’t know the month when the most divorces are granted, but according to 2008 data from Statistics Canada (the last year for which it was reported), the divorce rate has been relatively stable for the last 20 years, fluctuating between 35% and 42%.

Now don’t get me wrong. I’m a big fan of marriage. In November of this year we will celebrate our 40th anniversary. But considering what’s at stake, it’s well worth asking your prospective spouse a few important questions before you say, “I do,” so you don’t have to unravel the whole thing a few years later when you realize what you really meant was, “I don’t.”

Here are 10 things I thought of. No doubt you can think of others:

  1. Religion: How important is religion to each of you? If you are of different religions will one of you convert? If you have children, in which faith will you bring them up?
  2. Children: Do both of you want children? How many? How soon? If you cannot have children together is it a deal breaker? Would you consider adoption if all else fails?
  3. Childcare: Did one of your parents stay at home to care for you and your siblings? Do you believe there should be one stay at home parent in each family? If so, which one?
  4. Abortion: Legally a woman gets to make the decision if she is going to terminate a pregnancy. She may make this decision in a variety of difficult circumstances including personal health problems, lack of viability of the child or if she was a victim of rape. Do both parties share the same personal and/or religious views about abortion?
  5. Debt: There is nothing that can take the shine off a relationship faster than finding out later rather than sooner that one or both partners have significant credit card, student loan or other consumer debt. Be completely open about the state of both of your finances and consider how to get them in order before you walk down the aisle.
  6. Money management: How will you pay the family bills? Will each of you contribute the same amount monthly or pro-rate expenses based on income levels? Will you consolidate your finances or maintain different bank accounts? Who will be responsible for managing and reconciling accounts on a regular basis?
  7. Pre-nup: Is one of you older or more affluent? Have one or both of you been married before? Is one of you part owner of a family business? In these circumstances your prospective spouse may ask you to sign a pre-nuptial agreement giving up some of your rights on divorce. If so, be realistic and get independent legal advice before you agree.
  8. City vs. country: Where will you live? Are you willing to trade off a smaller apartment in the city for a detached house in the suburbs and a daily two-hour commute? Is living in a rural area on a huge lot a priority or is it important to you to be part of an urban community?
  9. Household chores: Are both of you neat freaks or is one of you a slob? Who is going to do what in the home and how often? If both of you are working are you open to hiring someone to do regular house cleaning for you?
  10. Resolving conflict: Can you discuss your feelings openly? Every couple has disagreements. How will you handle yours? Are you willing to consider counseling if problems arise the two if you can’t handle easily?

Relationships are dynamic and the discussions you have before the big day are not cast in stone. But if you build your life together based on open communication and shared values, chances are greater that when you encounter inevitable roadblocks down the road you will find a way to work together to overcome these obstacles.

 

Home renos that increase value

26 May

By Sheryl Smolkin

Whether you have recently purchased a resale home or you have lived in your house for many years, when you view your winter-weary residence in the bright spring sunlight you may be hit by the urge to renovate.

The problem is of course that your resources are limited and you want to make sure that any enhancements you make add value to your home, particularly if you plan to sell your property over the next several years.

The Appraisal Institute of Canada offers the following tips for choosing “smart” home renovations.

  1. Choose improvements with long life expectancy: Roofing, energy-efficient heating and cooling systems and windows can provide you with worry-free home improvements for as long as 10 to 15 years. But remember…regular maintenance is as important as the initial investment.
  1. Invest in modern updates in high-traffic areas: Update the core rooms of your home such as the kitchen and bathrooms. This can be as simple as changing door knobs, resurfacing cabinets, or replacing fixtures and counter tops.
  1. Don’t underestimate the value of inexpensive updates: A fresh coat of paint, modern lighting fixtures, landscaping or gardening, or upgraded door handles can give your home an updated look and feel – and it doesn’t have to cost a lot of money!
  1. Consider energy-efficient renovations with a high return relative to cost: Energy-efficient renovations are considered one of the highest paybacks relative to cost. Energy efficiency translates into reduced operating costs over time.
  1. Be careful about over-improvement: Consider your neighborhood and the expectations of buyers in your area when planning your next renovation project. Investing in an expensive project may be an over-improvement for a home in particular market, and the investment may only be partially recognized by home buyers.
  1. Think about your personal needs: How much you spend on improvements will depend on how long you plan to live in your home. If you you’re thinking shorter-term, smaller and less–expensive improvements may be your best bet to recover your investment.
  1. Be sure to get a building/renovation permit: Take the time to obtain the proper building permits from your municipality or appropriate authority. This is a good step to ensuring that the renovation work complies with the building codes.
  1. Hire a designer, architect, or contractor: Talk to a professional when you start planning your renovation project. They can help you draw up a plan, provide renovation advice, or assist in the construction. This will add to the quality of the renovation and go a long way in preventing cost overruns.
  1. Consider unique features with care: Unique designs or improvements that are uncommon for a particular market may impact your ability to resell home. This is where the expert advice of a real property appraiser can provide an objective perspective on the marketability of the property.

While maintaining or increasing the value of your home are important considerations when you renovate, making the home more livable for your family may be what really matters to you. Nevertheless, keep in mind that quality kitchen and bathroom improvements and a new interior/exterior paint job are the top three renos with the highest rate of return. And decluttering can also help to showcase the best features of your house.

How seniors can unlock home equity

19 May

By Sheryl Smolkin

Results of Manulife Bank of Canada’s Debt Survey revealed that nearly one in five homeowners expect to access home equity to supplement their retirement income with 10% of respondents planning to downsize and use the excess equity to provide retirement income.

That got me thinking about what options are available to retirees who want to unlock the value of their home to live on when they stop working.

  1. Sell high, buy low
    Of course, the most obvious alternative is to sell your home in a metropolitan area where real estate prices are high and retire to a smaller, less expensive community. For example, it will cost you a lot more to purchase or rent a house in Saskatoon or Regina than if you retire to Rosetown or Wadena.
  2. Downsize
    If you own a large suburban property with the traditional three or four bedrooms and multiple bathrooms, you may want to downsize and simplify. Again, the amount of equity you can unlock will depend on where you are currently living, where you want to move and how much smaller you are prepared to go.
  3. Rent instead
    Even if you have always owned your own home, you may be ready to let someone else worry about escalating taxes, furnace repairs, mowing the lawn and shoveling snow. Investing the proceeds of sale of your home and renting an apartment or a house can give you freedom from those responsibilities, particularly if you want to be able to just lock the door and take off on short notice for parts unknown.The downside is that you get what you pay for. Quality rental stock is in short supply in many areas and the nicer the apartment or house, the higher the rent. Furthermore, rents will increase over time and you may have to move again when your lease is up. You also will not be able to do structural renovations or decorate a rented property in the same way as your own home.
  4. Become a landlord
    Can your single family home be converted into a multi-unit dwelling? If you live in a desirable area and you do a tasteful renovation, the rental income will quickly pay for itself and leave you with a stream of income to supplement your retirement savings.The HGTV show Income Property typically focuses on young couples trying to get into their first home, but there is no reason why a similar strategy cannot work equally-well for seniors who want to age in place. An extra bonus is that if you need live-in care later in life, the apartment can be reclaimed for the use of a caregiver.
  5. Home equity line of credit
    A home equity line of credit, or HELOC, is a revolving line of credit secured by your home at a much lower interest rate than a traditional line of credit. The operation of a HELOC is discussed on ratehub.ca. In Canada, your HELOC cannot exceed 65% of your home’s value. However, it’s also important to remember that your outstanding mortgage loan balance + your HELOC cannot equal more than 80% of the value of your home.You must pay at least the interest owing every month and you can also make extra payments of principle at your discretion. We have a HELOC which came in very handy several times when family members bought and sold property and needed funds to finance a purchase before the sale of their previous homes had closed.
  6. Reverse mortgage
    A reverse mortgage is a home loan that provides cash payments based on home equity. Homeowners normally defer payment of the loan until they die, sell, or move out of the home. CHIP is the only Canadian financial institution that currently offers reverse mortgages. The Pros and Cons of a Reverse Mortgage are discussed in detail in an excellent guest blog by Tricia French on Retire Happy. Reverse mortgages allow clients over 55 to access up to 50% of their home’s value. Payments from a reverse mortgage are tax-free income, so your income-tested benefits such as OAS and GIS will not be affected.You can repay the loan at any time and the amount you owe can never exceed the value of your property. You and your beneficiaries also will not be responsible for any shortfall if interest rates increase and housing values drop.Nevertheless, interest will quickly grow on the amount you have borrowed and start up fees can be thousands of dollars. A reverse mortgage can quickly erode the money you have available when you eventually sell and therefore the size of the estate you can eventually leave to your children.
  7. Sell ‘n Stay
    I recently learned about a new concept called Sell ‘n Stay where seniors can sell their home to an investor and lease it back for 10 years or even for life. Unlike a reverse mortgage, the homeowner can access 100% of the equity in their home. The concept, developed by Real Estate Agent Saskia Wyngaard, is currently only available in Ontario.Market value of the house is determined by comparing sales of similar homes that have sold recently in the same neighborhood. The house is offered for sale through an exclusive listing without open houses or staging. Exposure is limited to buyers who are interested in purchasing an investment property with an in-place A+ tenant.The new owner pays for taxes, insurance and repairs. The previous owner pays market rent of about 5% of the value of the house, renter’s insurance and utilities. Since 2013 Wyngaard has been involved in 15 such arrangements with lease backs of 10 years.

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Whatever method you choose to unlock equity in your home to supplement your retirement, the optimum situation is to pay off your mortgage before you retire. This will give you the most flexibility to plan for life after work without the burden of paying off debt.

How we are spending our 2000 hours

21 Apr

By Sheryl Smolkin

Designed and crafted by Joel Troster 2016

A press release I read recently titled “What will you do with your 2,000 hours a year when you retire?” made me stop and think about how my husband and I have spent our time since I left my corporate job 11 years ago and he fully retired in mid-2015. 

An RBC survey of 1,500 working Canadians age 50 and older found almost three-quarters (73%) are unsure what they’ll do with that extra time. While the study found nearly two-thirds (64%) have done some planning for how they will finance retirement, less than half have planned for retirement lifestyle decisions, such as where they will live, where they will travel (44% each) and what activities they will do (46%). 

I was 54 when I retired from a benefits consulting firm with a reduced pension and post-retirement medical benefits. I never intended to stop working and had a job lined up as editor of an employee benefits magazine working from home. That eventually morphed into a freelance writing business. 

My husband had no pension other than government benefits when he retired from his position as a software engineer with a major telecommunications company at age 65. However, over the years he made maximum allowable contributions to individual and Group RRSPs. After a couple of months’ break he contacted his former employer about contract work, but no opportunities have materialized.

We moved to a new “infill” house in Toronto near the subway in 2001 and since then, the value of our two-story plus basement home has doubled in value. We’d love to renovate a large bungalow and stay in the area, but the prices of even much smaller homes have increased so much that we would end up with significantly less house for the same amount of money. 

Based on a previous mobility issue, I‘d like to be living on one floor sooner rather than later, but for now we are staying put. We go to the gym regularly and climbing stairs helps us stay fit. When we were both working we paid for regular housecleaning, snow removal and grass-cutting. We now employ outside help less frequently but we are prepared to ramp it up again if one or both of us has health problems. 

Vacations are a high priority for us and our favourite mode of travel is cruising. We want to see and do as much as we can as long as we are healthy and able to purchase comprehensive travel health insurance. At least once a year, we try to bring our daughter’s family living in Ottawa on holidays with us so we can spend more quality time with them. 

Paying for expensive travel is one explanation for why I continue taking on freelance writing jobs. But the other reason is that I thrive on deadlines and I really love to get paid for something I enjoy doing. My hobbies include reading, working out and singing in a community choir but interviewing and writing provides me with both structure and a creative outlet. I work about 30 hours a week so I have loads of flexibility to fit in personal appointments, travel and family time. 

In contrast, my husband has found a whole new creative outlet since he retired. He finished off a coffee table that he has been working on for years and there is a matching end table on the drawing board. He has also designed and a produced a series of beautiful cheese boards, bread boards and cutting boards (see above) that friends and family have received as welcome gifts. While in future he may consider selling a few of his pieces there is no pressure for him to do so. 

I can’t say we exactly planned in advance how we would fill up our days when we left the world of work, but once our finances were in order, we had the latitude to make it up as we went along. We know that retirement in our 50s and 60s (the go-go phase) is likely to be different than in our 70s and 80s (the slow-go phase) or even 90s (the no-go phase) but I think we’re on the right track. I’ll know when it is time to send out the last invoice and together we will decide when it is the right time to sell our house and downsize. 

Have you thought about how you will spend your time once you leave the office for the last time? Tell us how you are spending your 2,000 hours by sending an email to socialmedia@saskpension.com.  We’d love share your story.

Retirement savings: Are the kids alright?

4 Feb

By Sheryl Smolkin

A pair of surveys recently released by Tangerine Bank and TD Bank show that many millennials started saving for retirement in their early 20s, but they do not have a clear understanding of how much to save or how their RRSP savings can be used in future.

A new survey by Tangerine found that the younger generation of Canadians is getting the message to start saving early and build a nest egg for retirement. Despite being in the early stages of their career or still in school, the survey revealed that 62% of millennials (those 18-34) have started saving for retirement and almost half (46%) said they started before the age of 25.

These results are even more impressive when compared to data collected from the 81% of older working Canadians aged 35-65 who are currently saving for retirement. When asked when they began saving, only 18% reported to have started before the age of 25.

Of those 38% of millennials not yet saving for retirement, many (62%) say it’s because of their low salary or not having enough money, and another 23% said it’s because they are saving for a big ticket item like a house, a wedding, or travel.

Nevertheless across the different age groups, the survey’s findings were uniform when it comes to financial literacy. Fifty eight percent of both millennials and older working Canadians felt they did not learn enough about saving for retirement before they started.

This is consistent with the findings of a late 2015 Environics poll conducted for TD bank which found that many millennials are unaware that RRSP funds cannot be used for other items such as making a charitable donation (64%), paying childcare expenses (60%), financing a car (52%), making a personal loan (51%), renting an apartment or purchasing a second home (50%).

Half (50%) of all millennials surveyed by TD correctly identified that RRSP funds can be used for first time home purchase, although just 28% were aware they can be used to fund full-time education as a mature student.

“Saving enough money for a down payment on a home can be difficult for many younger Canadians, so the ability to withdraw up to $25,000 from an RRSP, or up to $50,000 for a couple, can help make it easier,” said Linda MacKay, Senior Vice President, Personal Savings and Investing at TD Canada Trust. “Building up an RRSP from the earliest possible moment not only helps you save on income tax now, but could also help get you into your first home more quickly and lower your monthly mortgage payments down the road.”

But Lee Bennett, Senior Vice President, TD Wealth Financial Planning says there are pros and cons and long-term implications of using RRSP funds to buy a home or pursue further education, including giving up the potential growth of RRSP savings until that money is repaid into the plan. As with any significant investment decision, she recommends investors consult with a financial planner who can help explain what’s best for each individual.

MacKay agrees, adding that it’s important to have a bit of know-how and understand clearly what an RRSP can – and cannot – be used for in order to avoid incurring tax penalties for improper withdrawals and to be able to maximize the amount of money that can be saved. She says this applies particularly to millennials who, as the TD survey shows, have many misconceptions about how an RRSP fund can be used.

You can find basic information on How RRSPs work and Making RRSP withdrawals before you retire on the Ontario Securities Commission’s web site GetSmarterAboutMoney.ca and a more comprehensive discussion from the Canada Revenue Agency at RRSPs and related plans.