Tag Archives: retirement

The Retirement Crisis Facing African Americans

Credit: Shutterstock

There’s a saying: When white America catches a cold, black America catches pneumonia. So, if there is an impending retirement crisis in America, what does that mean for African Americans? The answer to that question is discouraging.

There is a huge gap in retirement preparation of African Americans compared to white Americans, generally speaking. According to the Urban Institute’s Nine charts about wealth inequality in America:

The Retirement Savings Racial Disparity

The average white family had more than $130,000 in liquid retirement savings (cash in accounts such as 401(k)s, 403(b)s and IRAs) vs. $19,000 for the average African American in 2013, the most recent data available.

The wealth gap is growing. The average wealth of white families in 2013 was more than $500,000 higher than that of African American families ($95,000). In 1963, the average wealth of white families was $117,000 higher than for black families.

White families accumulate more wealth over their lives than African American families, on average, which widens the wealth gap as they age. In their 30s, whites have an average of $140,000 more in wealth than African Americans (three times as much). By their 60s, whites have over $1 million more in wealth than African Americans (11 times as much).

“The American dream has not happened for African Americans and Hispanics,” says Signe-Mary McKernan, economist and co-director, opportunity and ownership initiative at the Urban Institute. “Retirement wealth is at the end of the cycle. A lot of things can happen along the way before you get there.”

The pay gap and the wealth gap are among the many reasons African Americans enter retirement in poor financial shape, says Maya Rockeymoore, President of Center for Global Policy Solutions in Washington, D.C. Other explanations include financial literacy and investing habits.

The Pay Gap

“There is a pay gap when it comes to what African Americans earn when it compares to whites, even when you control for education,” says Rockeymoore. “We are starting with less.”

The hourly pay gap has widened to the worst in 40 years, according to the Economic Policy Institute (EPI) — a roughly 27% difference in 2015. Whites earned an average of $25.22 an hour vs. $18.49 for blacks, the EPI says. Declining unionization, the failure to raise the minimum wage and lax enforcement of anti-discrimination laws have contributed to the growing black-white wage gap, according to the EPI.

“We need to be having forums addressing labor-market decisions,” Rockeymoore says. Blacks are earning less than whites and it is not a reflection of talents or skills, she notes. “It is a reflection of discrimination in the labor market. We talk about the gender-pay gap, but we need to talk about the racial-pay gap.”

The Wealth Gap

According to the Federal Reserve’s Survey of Consumer Finances, in 2013, the median white household had $13 in net wealth for every $1 in net wealth of the median black household. Also, according to a Pew Charitable Trusts report, What resources do families have for financial emergencies, the typical white household has slightly more than one month’s worth of income in liquid savings, compared with just five days for the typical African-American household.

The Federal Reserve report said that whites are five times more likely to receive large gifts and inheritances than blacks and the amounts tend to be much larger for whites. “That is one of the main issues,” says financial planner Nick Abrams of AJW Financial Partners in Columbia, Md. “We [African Americans] are starting at ground zero every generation. That is hurting us financially.”

Rockeymoore agrees. “The wealth gap is serious,” she says, pointing to disparities between blacks and whites regarding employer-sponsored retirement plans.

“A significant number of us [blacks] are in jobs where we do not have access to pre-tax preferred retirement vehicles like 401(k) or 403(b) accounts,” says Rockeymoore. Many blacks work in small businesses where such plans frequently are not offered.

“If we do work in jobs that offer tax-preferred vehicles, we tend to not contribute at rates that whites do. And we take out loans out at higher rate,” adds Rockeymoore.

One solution, she notes, would be more access to such employer-sponsored plans.

Home ownership also plays a big part in the wealth gap. The typical white household aged 47 to 64 has housing wealth of $67,000; the typical household of color in this age group has zero home equity, according to the December 2016 report, Social Security and the Racial Gap in Retirement Wealth, from the National Academy of Social Insurance.

Debt can limit the ability to achieve other financial goals, especially retirement planning, too. “Among African American employees surveyed who are offered an employer-sponsored retirement account but contribute less than the employer match or do not contribute at all, 40% say that paying down debt is a higher priority for them than making retirement contributions, according to Prudential’s 2015-2016 African American Financial Experience.

Financial Literacy

There are also big differences in financial literacy between blacks and whites. Only one in 10 African Americans work with a financial professional compared with one in four white Americans, the Prudential report said.

“Many African Americans have had no history of someone who was a grandfather or someone who gave them some level of financial education in that household,” says James Brewer, president of Envision Wealth Planning in Chicago and president of the Association of African American Financial Advisors. “So, one of the challenges is around some level of financial education.”

Theodore Daniels, president of the Society for Financial Education and Professional Development agrees. “There has got to be more education. People have got to be willing to attend financial education workshops. Some people don’t know what they don’t know. Once they attend, they say ‘I can do this.’ If they are not educated, they are not comfortable making decisions, and they won’t do it,” Daniels notes.

African Americans Tend Not to Invest in Stocks

Some analysts also say that African Americans often shy away from investing in the stock market. “Whatever discretionary income we have, we tend not to invest in equities,” says Rockeymoore. “We don’t have a diversification.”

This may be due to a lack of comfort with the stock market.

“African Americans are risk-averse,” says Deborah Owens, a former Fidelity Investments vice president who calls herself America’s Wealth Coach. “So, one of the major reasons they have less in retirement savings is they are ultra-conservative, particularly African Americans who work in the public sector and nonprofit organizations.”

Owens says black investors typically focus on guaranteed or fixed investments that are low-risk or no-risk. As a result, their retirement funds aren’t compounding at a high rate of return.

According to the Federal Reserve, the average balance of African Americans in 401(k)s is only $23,000. And Social Security and the Racial Gap in Retirement Wealth found the average balance for African Americans in pensions and IRAs was $10,300, vs. $105,600 for white Americans.

Owens believes many African American workers don’t take full advantage of all the choices in their employer-sponsored plans because they don’t understand them. “The tendency to be risk averse is directly correlated to their lack of knowledge,” she says.

What Employers and Policymakers Could Do to Help

Brewer believes employers could play a bigger educational role.

“It is important for companies or organizations who have higher percentages of African American employees to realize that there are some differences, and they need to bring in people who have some cultural sensitivities to those differences, and come up with a plan to help those groups,” says Brewer.

He says African Americans need financial advice on issues such as having higher student loan debt than white counterparts and, often, a greater need to financially assist less affluent family members. Rockeymoore says African Americans, even in retirement, tend to support other family members, including children and adult children. Also, they are disproportionately taking care of grandchildren, making them unable to save more for retirement.

All in all, says Rockeymoore: “There needs to be a national campaign to encourage young African Americans to save and invest. Home ownership is the pathway to wealth. They [blacks] need to be educated in the homebuying process and also to diversify their investments to include stocks and bonds.”

McKernan believes policymakers also need to take action to close the racial retirement security gap. “This country is built on the premise that it provides economic opportunity,” she says. “But this country continues a history of discrimination and the result of that is passed from generation to generation.”

Source: Forbes.com – By Rodney Brooks, Next Avenue Contributor 

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Retirees find financial freedom in renting after selling their homes

William Jack and Mary Taylor sold their home two years ago, but they didn't buy a condo. Instead, like a growing number of people downsizing, they rented a place.

A growing number of homeowners are unlocking the equity in their houses, by selling and moving into a rental.

William Jack woke up in the middle of the night last month as he often does. This time, though, he rolled over and went back to sleep.

That’s when he knew that after more than two years of turmoil, he was finally home. The fact that the roof over his head belongs to someone else only added to his peace of mind.

William and his wife, Mary Taylor, are among a growing number of Toronto area downsizers, who are choosing to rent rather than buy a retirement nest. It is a choice, they say, that can be physically, mentally and financially liberating.

The couple — he’s 71, she’s 69 — are healthy, vibrant people. But a couple of years ago, their two-storey home of 32 years with its reverse ravine lot was “just consuming too much time and it was absorbing huge amounts of energy that we wanted to use in other ways,” said William.

“There were rooms we didn’t go into,” said Mary.

“We watched both our parents go through this downsizing exercise. I swore I would never do to anyone what my parents did to me. It was a nightmare,” said William.

“We wanted to leave while we still could — gracefully,” said Mary.

Royal LePage realtor Desmond Brown helped sell the couple’s east-end home and, in the end, he was the one who helped them find the two-bedroom, 1,800-sq. ft. condo they have been renting near the lake since the fall.

The emotional and financial decision to rent rather than buy is becoming more common, said Brown.

Clients like William and Mary, “have had a really good run by owning their own homes for many years,” he said.

“They’ve accumulated a lot of equity. They have a feeling that the market is going to go back down again and all the benefits of this great market are going to be lost if they don’t cash in,” said Brown.

At the same time, these home sellers can’t necessarily see spending $1 million or more, plus maintenance fees, on a condo.

“Yes, I was incensed when I saw these places for the same amount of money as our house. How could that possibly be,” said Mary.

But, she said, “It doesn’t make sense to rail against the market. That’s the market, so you accept it or not.”

Initially they were open to renting or buying.

“Buying any of the units we looked at would have consumed a huge percentage of our net worth. You don’t want 50-, 60-, 75-, 80 per cent of your net worth in one piece of real estate. It’s just too risky,” said William.

“The price of the condominiums we were looking at went up by $20,000 a month or more,” said Mary.

The couple pays about $4,200 a month in rent. It might sound like a lot but they write only three cheques a month — rent, hydro and cable. When they lived in their house, there were 15 to 20 regular expenses.

Gone, they say, are the bills for a security system, for chimney repairs, sewer connections and maintenance agreements on appliances. Even firewood cost $500 a year.

The condo is the third rental for the couple since they sold their house. The first summer they rented a place in Prince Edward County and then they moved to the west end for a year. But they missed the east end.

“We realized community was much more important than we thought. The cottage was isolated and (the west end) place was so transient you couldn’t have a community,” said Mary.

Now they live in a building where they know other members of their yacht club and they enjoy bird-watching near the lake.

Their apartment is decorated with souvenirs of their travels but there is no granny vibe.

It’s the type of high-end rental that can be difficult to find. Apartment hunting is not particularly lucrative for realtors even if they can find something suitable among the few leases on the Multiple Listings Service.

In the hot Toronto property market, renters are increasingly in the same position as home buyers. They have to compete, sometimes by offering higher rents or cash upfront.

“We were paying $3,750 (in their previous west-end apartment) and when (the owner) listed it on MLS there was a bidding war and she ended up getting $4,500 a month,” said William, an actuary and former IT executive.

Helping clients find a rental is all part of the service Brown provides when he has helped someone sell a home. He found this couple’s condo by word-of-mouth. But he acknowledges the searches can be challenging.

“When you’re spending up to $5,000 you’re going to be picky so finding the right one can take some time,” said Brown.

Mary says they knew they were home as soon as they walked through the door of their condo. But that was after they had looked at a lot of places — many were “appalling,” said William.

Is renting a condo saving them money on a monthly basis?

“Probably not. But it isn’t costing us more,” said William. He says they have taken the proceeds from their home sale and invested the money.

Releasing the equity on your house can actually generate enough cash flow to cover rent, agrees Scott Plaskett, CEO of Ironshield Financial Planning.

For people rich in equity but cash poor, renting can give them the freedom to pay for some of the extra things they want in life. It’s all very well to watch your home’s value appreciate, but you can’t eat a doorknob, he said.

If the decision to rent or buy a smaller home is a financial wash, he advises his clients to go with the better emotional fit. That frequently depends on whether they are comfortable giving up the control of owning their own place or whether they really need the cash to cover the cost of enjoying their retirement.

But Plaskett warns retirees to be aware that the economic environment in which they are investing the equity they have earned on their homes has changed.

“We’ve never really existed in an environment where we’ve had wealth with interest rates this low,” he said.

If you’re going to rent and invest your home’s equity you need to look carefully at where you’re putting that money so you’re not seeing your old age security benefits clawed back.

“Now you have all this money that’s being released from one of the legal tax shelters in Canada into a non-sheltered environment,” said Plaskett.

When their abundant garden became too much to manage, Jane and Bill Martin, 79 and 80, didn’t even consider buying another home.

“We don’t want the responsibility. (With an apartment) you can close the door and go away. We just didn’t want to own again,” said Jane.

Experienced apartment dwellers, the Martins raised their kids in an east end rental.

They only bought their house south of Scarborough General Hospital because an accountant advised it as a wise investment, said Jane.

When it came time to move, it took a couple of months viewing between 15 and 20 apartments (“From the worst on up,” said Jane.)

“The ads look good but when you go and look at the place. . . ” she said. “Most condos you’re talking 700 to 900 sq. ft. That won’t do.”

They found 1,230 sq. ft. with two bedrooms, two bathrooms and two balconies for $1,882 a month near Cummer and Bayview Aves.

The TTC is outside the door and conveniences such as a drug and grocery store, banks and the post office are right there.

They’re not used to the shopping in their new neighbourhood yet. It feels like a long way to big department stores after living five minutes from the Scarborough Town Centre for so many years.

They still go back to their old neighbourhood butcher.

“We had a lot of good friendly neighbours so you miss them,” Jane said. “Every now and again we make a little excursion day and head down there and do some shopping and get some haircuts.”

Downsizing duty

Laurie Bell has been downsizing seniors for five years. Lately, she says, she sees a trend to renting rather than buying among people who can still live independently.

One couple actually rented a condo to see if they would like the lifestyle.

In two other cases the reasons were financial, said Bell, who has a background in mental health and, at one point, even sold real estate.

“When the person’s significant major asset is their house, they’re looking at how they can move, get rid of the maintenance,” she said.

“They just want to know where they stand financially. It’s frightening to look at renting a condo because it might just be for a year.”

More seniors want to maintain their autonomy and avoid relying on their children or other family members.

“They’ve seen it not go well if people do wait too late and there’s been a precipitous incident,” said Bell, whose company is called Moving Seniors with a Smile.

Services like hers take a lot of the physical and emotional stress out of the downsizing process.

There is often 30 or 40 years’ worth of possessions to sort through, which can be emotionally taxing because her clients can’t keep it all.

She also has a coterie of reliable service providers: movers, junk removal companies, even shredders for paper work.

Bell describes it as a three-day process. The first day is spent packing, the second day the client’s belongings get moved and the third day they get the new place set up.

“They can have friends over for cocktails by 5 p.m.”

Source: Toronto Star – Tess Kalinowski

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Real Estate Investing financing – Why You Should Avoid Timeshares and Vacation Homes

Many smart people have lost lots of money trying to invest in real estate through timeshare condominiums and vacation homes. Many people are attracted by these so-called investments because they want to have a place to go during vacation, and it seems that these properties would also end up being good investments at the same time.

The way a timeshare works is that you’re purchasing a partial ownership in a condominium, such as the right to use the condo for one week out of the year. Let us say you pay about $6000 for this privilege. This may seem like a bargain, but if you do the math you will realize that you are paying quite a bit for the opportunity to spend only a single week in this condominium. If you were to pay this weekly amount for an entire year, the condominium would end up costing you $312,000, even though you could purchase a similar condo free and clear for much less than this (let’s say maybe $150,000 or $200,000).

You are paying a pretty big markup, and you will also be responsible for certain annual operating fees, usually a few hundred dollars or so. Instead of purchasing a timeshare, you may want to consider renting someone else’s unit for a week whenever you go on vacation.

This will likely be much cheaper, and you will be able to take a vacation in a different part of the country each year. You also don’t have to worry about the annual maintenance fees or the hassle of having to deal with any ownership requirements.

If you can afford to purchase a condominium out right, or if you can see yourself saving enough to purchase over the next few years, you may want to consider this option as well.

What about vacation homes? Well, if you’re wealthy enough to afford multiple properties throughout the country, that’s fine. However, many families who purchase vacation homes really can’t afford the extra expense and are simply making the purchase because they think it’s a good investment.

It’s nice to have a vacation home to go to a few weeks out of the year, but you have to look at your financial situation and determine whether you can really afford to have this luxury.

You may need to rent out the property for most of the year in order to help you pay for it, and this could raise some additional headaches as you will now become a landlord. Also, if you are purchasing the property as a vacation home primarily, make sure you enjoy the area as you’ll probably be spending a lot of vacations here in the future!


Be honest with yourself about your motivations. The vacation home could be a wonderful property for you and your family to enjoy, but it may not have the best potential as an investment property.

Source: Business Finance World – By Robert Charlson

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Should You Pay for Your Child’s College Education?

College degrees lead to higher pay, greater career options, and — research suggests — longer lifespans. But parents with college-bound children may feel trapped by the skyrocketing costs of education, which can also last a lifetime.

If you pony up, you could risking your retirement. If you don’t, you could be risking your kid’s future.

Indeed, the average graduate leaves school with nearly $30,000 in student debt, a sum that will reduce their future retirement savings by more than $300,000, according to a projection by insurance and financial research group Limra.

Likewise, parents’ retirement savings are also getting put on the line because of skyrocketing costs. Nearly a third of parents in a T. Rowe Price study admitted they’ve made the risky choice of tapping their 401(k) plan to save for their kids’ college.

That’s a shortsighted move, said Sean T. Keating, a certified financial planner in Eatontown, New Jersey.

“You can always borrow money for college, but you can’t borrow money for retirement,” Keating said.

What do you do?

Finding compromise is possible if you plan ahead and follow the right order of operations, said Lazetta Rainey Braxton, a CFP and founder of the wealth advisory firm Financial Fountains.

“Middle income parents need to ensure their own financial stability first,” Braxton said. “It’s like putting on your airplane oxygen mask before you put on your children’s.”

Here are three key questions to ask yourself before you decide to open your wallet wide — or slam it shut.

How much can I afford?

One rule of thumb says that to maintain your standard of living, your savings at retirement should be high enough to replace at least 80 percent of your annual income each year, said Keating. Work backward from that assumption to see how much you can actually spare today, he said, also keeping in mind obligations like your mortgage payments and any other debts.

“You have to be aware of what you’d be sacrificing,” said Erika Safran, a CFP and president of Safran Wealth Advisors in New York. “Will you run out of money at age 75? You must also consider medical expenses and where you will live.”

In fact, many older adults end up forced to retire earlier than they expected because of illness or other unforeseen events, said Thomas Murphy, a financial planner in Dallas. So it pays to leave plenty of buffer room as you budget out any contribution to your child’s college funds.

Am I leaving free money on the table?

Make sure you are doing everything you can to free up easy cash, Safran said. Refinancing a mortgage right now could save you hundreds of dollars a month, for example. If you’ve done the math and realize you truly can’t spare much (or any) cash for your kid’s education, don’t just leave your child hanging.

“When you simply say you can’t pay, that can discourage a kid from applying to schools at all, since he or she might not realize you can actually get application fees waived,” Murphy said.

Instead, stay involved in the process and fill out the Free Application for Federal Student Aid — no matter what. Even if your family income is too high for your children to qualify for federal aid, simply having a completed FAFSA gives students the option to apply for merit-based scholarships and other grants a prospective school might offer.

Finally, remember that it doesn’t hurt to exercise a little patience: Consider asking for additional aid before the second semester, since money may have freed up because of first-semester dropouts, Murphy said.

What lesson will my child take away?

Not all high school seniors are academically or emotionally ready for college.

“For some, a year in the working world not only allows them to contribute financially but also gives them a sense of accountability,” Keating said. “It might also make them more reasonable in their choice of schools.”

Joining the military or starting at a community college before transferring to a four-year school are other options that can save money and give your kids extra runway to mature before college, Keating said.

Remember that, for your child, choosing a school is not just a financial or academic decision. “It’s also an emotional decision,” Safran said.

Try to keep an open mind. If your child is excited to start right away at a school on the high end of your price range, you can always make your financial help conditional upon their academic performance.

“You can promise you’ll help them pay back their loans after graduation if they get good enough grades,” Murphy said.


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What happens to Aeroplan and other reward program points when you die?


Aeroplan is “capitalizing on someone’s grief” by charging a fee to transfer points from a deceased member’s account, says the family member of a woman who died leaving 250,000 Aeroplan points behind.

“It seemed so callous. It seemed really insensitive. And it seemed really unnecessary,” says Kathryn Kwasnica of Victoria after finding out how much it would cost to transfer to her father the 250,000 points accumulated by her late stepmother.

But Aeroplan says it’s a “small” fee and that a second option allows users to avoid paying that charge altogether.

And even though the fees can be significant and travel booking potentially restrictive, compared with some other loyalty programs, Aeroplan has one of the better policies for dealing with points in the account of someone who has died.

Kwasnica’s stepmother, Linda Stewart, started feeling ill about a year ago, but it wasn’t until last summer that she was diagnosed with mesothelioma, an aggressive and deadly form of cancer.


It’s in the fine print. (CBC)

“Six months later she was dead,” says Kwasnica. Stewart was 68 when she died on Jan. 7.

Kwasnica, acting on behalf of her grieving father, Stewart’s husband, called Aeroplan to find out what to do about Stewart’s Aeroplan points.

She says she was told, in the event one of its members dies, Aeroplan charges a fee of $30 plus one cent per point to transfer the balance to a surviving family member. In Kwasnica’s case, because her stepmother had about 250,000 points, the fee would have amounted to about $2,530.  

“That seemed crazy for a data transfer,” says Kwasnica.

Aeroplan defends itself

“My father passed away a year ago, so I completely empathize with members who are going through what they’re going through,” says John Boynton, Aeroplan’s chief marketing officer.

“But we are always trying to balance shareholders and members, so there are certain costs that we have to recuperate.”

For a flat $30 fee, Aeroplan also offers the option to transfer those points to a newly created estate account, which can be used by surviving family members. But Kwasnica says she was told by the person she contacted at Aeroplan that the points in the estate account must be used in their entirety within one year.

Many Aeroplan trips need to be booked at least a year in advance, and Kwasnica understood that to mean her father would have had to make travel reservations practically while planning his wife’s funeral.

“Who wants to travel right after the love of their life dies and you’ve had the worst year of your life?”

But Boynton says that’s not actually the case.

“A year is how much [time] you have to do something with them. But you can also book an Air Canada ticket up to a year in advance too, so that’s two years. And if that’s too soon for you, you can also buy an Air Canada gift certificate, which doesn’t have an expiry, or a retail gift certificate as well.”

However, redeeming Aeroplan points for a gift certificate does not always offer the best value compared with, for example, redeeming those points for an international flight in business class.

Maximizing revenue

Patrick Sojka of the website Rewards Canada says transferring points is not a large expense for a loyalty program.

“Honestly, [the fee], it’s money-making,” he says.

“Ninety per cent of all programs worldwide charge you a fee to transfer points and miles to somebody else [in the event a member dies].”

In Sojka’s view, the fee is about maximizing revenue. “The fact [is] that the miles on those accounts are a liability. The sooner they can get them off the books, the better,” he says.

High cost of dying

Compared with Aeroplan, other loyalty programs have terms and conditions surrounding death that are even more expensive and draconian.

Air Miles used to allow the surviving family member to merge an account with that of the deceased at no charge.

But about four years ago, Air Miles changed its policy and now charges a fee of 15 cents per mile.

Sojka estimates the Air Miles fee is about 50 per cent higher than Aeroplan’s.

Other loyalty programs don’t even offer the option to transfer points in the event of a death.

According to the terms and conditions for Shoppers Drug Mart’s popular Optimum points program, “Upon the death of a Shoppers Optimum Member, the member’s account will be closed and any Shoppers Optimum Points in the account will be forfeited.”

Better not to tell?

But there may be ways around this.

In March 2013, Delta Airlines changed its policy, declaring SkyMiles would no longer be transferable upon death.

As a result, travel writers, bloggers, and travel hackers started advising SkyMiles members not to notify the program of a death.

“It’s a grey area. But you don’t let the program know that that person’s passed away,” says Sojka, who also advises this.

“What you do is ensure that everybody has your log-in and passwords and then you can use those miles. Because when you book rewards flights, they don’t have to be booked for yourself, they can be booked for anybody, essentially. You can go in and book points for yourself, your family members, you name it, using those points.”

It’s not clear if companies will crack down on this apparent loophole, but Sojka says he hasn’t heard of any repercussions from taking this route.

Now that they know about it, Kathryn Kwasnica says her family will probably go with the gift certificate option for her stepmother’s Aeroplan points.

“I think my dad would probably be into that. Because I think for him, the thought of travelling right now is just disturbing.”


Source: By Aaron Saltzman, CBC News Posted: Jan 27, 2016 

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Demographics driving key mortgage market

Industry insiders are attributing strong year-over-year growth in reverse mortgage originations to several factors – the most notable being human longevity.

“With the current demographic trends and extended life expectancy we project reverse mortgage originations to grow at 25-30 per cent annually over the next few years,” said Steven Ranson, president and CEO of HomEquity Bank. “Canadians are living longer, have underfunded pensions and insufficient savings. For many, their house plays a big role in a comprehensive retirement plan.”

The increase in consumer direct business as well as continued growth through referral partners including banks and mortgage brokers is producing record results in the industry. Brokers themselves are pointing to increased demand for a product many professionals were slow to refer on.

HomEquity Bank alone reported a record $41 million in reverse mortgage origination in the month of July, marking another month of record year-over-year growth for the reverse mortgage company. 

The reverse mortgage industry is booming in Canada, growing by 21 per cent in July compared to last year.

According to recent numbers from Statistics Canada, the 55-59 age group in the country make up 7.2 per cent of the overall population, with those age 60-64 making up 6.1 per cent.

The numbers that show how the reverse mortgage sector is ready to really take off are the percentage of people in the 55-59 age bracket, which make up 7.8 per cent of the total population – which places HomEquity Bank in the catbird seat, as is the only national provider of reverse mortgages in Canada available to those aged 55 and older.

The lender originates and administers Canada’s largest portfolio of reverse mortgages under the CHIP Reverse Mortgage and Income Advantage brands, and has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.

Source: MortgageBrokerNews.ca Donald Horne | 07 Aug 2015
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