According to a Financial
Post report, TD Canada recently conducted a survey of 1,000 Canadian baby
boomers and found that many of them were looking to move to a smaller house to
free up cash for retirement. However, many such people do not have a solid
understanding of their finances, especially how much money they’ll need post
retirement for a comfortable lifestyle.
TD Canada Trust regional sales manager Farhaneh Haque also advised
baby boomers to pay down as much of their mortgage as they can while they are
in a job. She said that baby boomers should use the mortgage prepayment option allowed
by banks and mortgage
lenders to pay down their mortgage. It is the right of a borrower to pay
down part or all of the mortgage debt before its term. For instance, a thirty
year mortgage can be paid off prior to the 30-year term by making additional
payments towards the principal amount regularly.
Ms. Haque suggested that it is best to plan your finances to
determine how comfortable your retirement will be. For instance, baby boomers
looking to downsize have to take into account condo fees or charges for
landscaping. At the same time, a detached house may not make sense if you will
be away for several months a year. Assessing all these aspects is important
when you are looking at purchasing your next home to free up cash for
retirement.
