How A Reverse Mortgage Can Help Reduce Income Tax

When you reach the age that your RRSP turns into a RIF and you have to start withdrawing money from the RIF, the Federal Government will finally catch up with you and the money you take out of your RIF will become taxable and the Federal Government will get their share.

Let's say you have a company pension, Old Age Security, and CPP but you need another $2,000 per month to have the retirement lifestyle you want. Assuming you have money in your RIF and let's also assume that you only have to take out $1,000 per month from your RIF as the minimum requirement. Firstly that $1,000 is going to be taxable. And if you take out another $1,000 to get you to the monthly requirement of $2,000 all of that money is going to be taxable.

However, if you were to set up a Reverse Mortgage, you could take out $1,000 per month of your equity in the form of an annuity, and 100% of that money is tax free. There are no monthly payments and you continue to own your home and do with it as you wish.

Reverse Mortgages are increasing in popularity and becoming a more welcomed option in retirement planning and cashflow. I love how home owners lives are changed for the better when I set them up with a Reverse Mortgage. If you have any questions about whether a Reverse Mortgage is right for you, please feel free to give me a call at 1-604-818-2840 or email me john@canadianmortgagefinders.com