With the strongest waves of the global financial crisis receding from the shoreline, many retirees and pre-retirees are staring at nest eggs that look very much like battered sand castles.
And while they rapidly try and bolster their portfolios, many are worried that they will not have enough income to retire comfortably. In fact, a recent report from the Bank of Montreal (BMO) found that Canadians nearing retirement need to ramp up their savings in coming years from 5 or 6 percent to around 9 percent in order to meet their financial goals.
In order to help facilitate the saving, several Canadian provinces and municipalities have offered homeowners the option to defer their property taxes, availing them of an opportunity to free up cash for their retirement.
With the property tax deferral programs, the taxes owed are treated as a deferred payment option from the province or municipality. The funds that were to go to taxes get invested and hopefully grow or get used to fund current retirement expenses. The deferred property taxes, along with any interest accrued is then re-paid when the home is sold.
“This is a great way for seniors to take advantage of the equity they have built in their homes and create more cash flow during their retirement years,” said Chris Buttigieg, senior manager, BMO Wealth Planning Group, BMO Financial Group.