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November 7 2023 | Real Estate Tips

How to Extend Your Retirement Savings Through Real Estate

How Long Will Your Retirement Savings Last

Today, I’m going to talk about how you can extend your retirement savings through real estate! For those of you who don’t know me, my name is Danielle Demerino and I am a Toronto real estate agent. My main goal is to help my clients build wealth and a better life through real estate purchases and sales.

I was having a conversation with a friend yesterday and we started discussing his mother’s current real estate and financial situation. After some analysis, I explained to my friend that even though his mom was perfectly healthy, she could really only live another 12 years financially based on their plan.

She decided she wanted to move into a retirement home and sell her house. The problem is, that the cost of the retirement home would be higher than the proceeds of the sale of the house. This just wasn’t going to equate for longer than 12 years and that’s without considering inflation.

I suggested the following financial strategy. Take the million dollars she receives from the sale, keep half of it in the bank and use the other half to buy a condo outright. His mom would have rental income from the property each month and the house would appreciate over time. When she runs out of money in her savings, she could then sell the condo and take the proceeds of that to help with her finances.

I estimated that she would probably get another 5-8 years of financial support from the income. I asked my friend, if she doesn’t do this, what is she planning to do when the money runs out after 12 years? Does she plan on living with a family member? If so, why didn’t she live with the family member in the beginning? What is the plan?

The reality is, that not many people are having these uncomfortable financial discussions, though they should be! Seniors are being put in homes and the money is slowly being chipped away at until there is no more.

If I told you your parent(s) only had 12 years to live, would you go with that plan or would you consider something else? Honestly?!

If you would like more information on building a retirement plan through real estate, please feel free to reach out!