Roughly 80% of seniors want to age in their own home. I certainly do and I also don’t understand why more people don’t see the enormous advantages of doing so, which I’ve pointed out in other posts.

One of the primary reasons people do not age in their own homes is that they feel they do not have the money or the energy to update and maintain things as they age. However, in most cases they are ignoring the largest source of money they have – their own home!

According to a report by the National Council for Aging in the US, for the 80% of adults aged 65+ who own their homes, home equity represents 60-80% of their total net worth. More importantly, only 20% of older adults indicated a willingness to draw on home equity in retirement. According to the report, this research suggests that a lack of understanding of existing home equity products and worries about making a wrong choice contribute to this reluctance.

There are a number of home equity products available in Canada and understanding the pros and cons of these products is important for everyone involved in the discussion of aging at home. From a purely financial standpoint, if it requires you to draw down on your home equity each year to stay at home (e.g. $20,000/year) but the financial advantages are an ongoing increase in the worth of your home ($30,000-$40,000) plus the non-payment to a retirement home ($30,000-$50,000), it makes perfect financial sense to draw down on your home equity. At a minimum, you would be saving/making $40,000 per year! That is to the advantage of both the people living in the home as well as any family members who might benefit from the sale of the house.