Generate Cash Flow For Retirement Using Your Home Equity
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Publicado 2021-03-19
If you've owned a home for a number of years, a lot of your wealth will be tied up there. Having wealth is a good problem to have...but as you inch towards retirement it can an issue.
Too many people look at the equity in their home as untouchable and extremely risky if they do mess around with it. However, it doesn’t have to be risky with a solid and strategic plan. The equity in your home can be used to build more wealth long term and put you in a better position to retire.
In this video we'll go through 2 scenarios. In the first one, we'll look into using the cash flow opened up when you finish off paying your mortgage. In the second scenario, we'll actually look into taking out a second mortgage to upfront your investments to create more income in retirement.
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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.
Todos los comentarios (21)
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Honestly, committing to another 10 years of working (at age 50-55) to earn an extra $2k/yr(maybe more/maybe less as 5% is NOT guaranteed) not my cup of tea. But I do love the concept and the idea that this forces you to save, had I been 45-50 years old and mortgage free - this would have been something for me. Thank you once again for all the efforts you put into your videos and for sharing your knowledge.
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Love your channel... and love how you share information like this.
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Great topic! Really liked learning about this option that is applicable to many in hot canadian real estate markets.
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This topic's so handy! And sorry for being a newbie - When you say get Mortgage, do you mean HELOC? Glad to found your channel! :)
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We've used this strategy to maximize my husband's RRSP as he does not have an employee plan with a match.
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Having a RRSP after 65 makes the government rich. Any income from an RRSP after 65 just cuts back entitlements from GIS. At 71 your RRSP gets taxed for most at the highest tax rate. Retire at 60 and use your RRSP as income plus contribute to your TFSA. Use up as much of your RRSP before 71. Delay CPP / OAS until 70.
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Love your videos. Do you do zoom calls for consultation?
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Have done something similar, although it differs in a way: had no debts and had maxed out the RRSP room, so took out a mortgage of $100K to invest outside of RRSP/TFSA - in an open investment. So now making the mortgage payments and will look to deduct the mortgage interest on the income taxes. When it comes time to fully retire in 4-5 years, the open investments gain will be taxed as a capital gain at the current capital gains rate (50%). Should end up being a decent strategy given that RRSP/TFSA are already maxed.
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I have suggested this strategy to others, and they had the same reaction to "taking out a mortgage".
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Thanks for the info. I didn't hear anything about the cost of the mortgage? typically on a HLOC it's interest only. But there is going to be a 10 year cost of the interest. At current rates (I have an HLOC) that could be $15k-25k a year in interest. Did I miss that being covered?
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You are going to have to create a video for the 25-and-under of today who will NEVER be able to buy a house based on current real estate prices vs real wages, but may inherit in their future. How any young person is supposed to be able to ever move out and start their own adult life today is beyond me.
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For years I have been telling people that having a mortgage of some type is a good thing and they think I'm nuts. The goal is to learn to manage all forms of debt and not just the elimination. Debt to build assets is smart. Can't wait for the HELOC video.
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One best video
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This is a good idea if you have the RRSP room. If you kept up your RRSP contribution every year you cant do it.. wish I knew this years ago Over all the videos have been great
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Excellent information! If I use the dividend generated from the loan portfolio (none-registered) to contribute to TFSA, can I still deduct the loan interests?
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Are there situations where this strategy makes sense if you are out of RRSP & TFSA room? We have been slow paying our mortgage for a few years, and adding to our investments. But I'm wondering if we should take out more mortgage at renewal to invest in our non-registered accounts. Thanks for the great videos!
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Have you presented how "Reduction of Income Tax at Source" works? I have done this, and it is just awesome for those who do regular investing.
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What happens to the balance on the re-mortgaged in 10 yrs? How is that paid off?
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What about cost of borrowing? Shouldn't we consider the interest costs for that ten year mortgage and compare to the upside of front loading the investments?? I am curious as to why this isn't part of the plan?? thoughts?
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Just a quick question, what about the interest you are paying on the remortgaging your home $ 225,000.00 for the 10 years - as well sometimes you lose monies in your investment you could lose a bit of the original RRSP contributions sometimes it could be up to 20%
