July 19, 2019

Supplement your income with a CHIP Reverse Mortgage

Are you among those unfortunate Canadians who could not save the necessary cash for their retirement? If yes, you can preferable opt for the Canadian Home Income Plan (CHIP) to supplement some good income for your retirement.

According to the Statistics Canada, 77% of the net value of home equity owned by seniors or homeowners is never invested and remains tied up Therefore, if you do not have enough fund available for your post-retirement expenses, CHIP can help you to utilize some part of the home equity to access income that is absolutely tax-free.

The fund you receive through CHIP does not levy any tax on you because you will be using your equity of your home for which you have already paid the required tax from the cash you used to purchase it. Additionally, the income you receive through CHIP is not an earned income and therefore is never considered taxable in any of the tax calculations in the following years. It also does not restrict you from receiving your other retirement benefits from either Old Age Security (OAS) or Canadian Pension Plan (CPP).

There are a few ways you can choose for gaining your retirement income through CHIP. You can opt for receiving payments periodically from CHIP for a specific period of time as agreed up on by you and CHIP. Alternatively, you can also choose to receive the entire amount against your home equity as a lump sum. In the later method, you can invest that lump sum amount or save it in your account and withdraw as and when you need. However, it is advisable to consult a financial advisor to understand which option is suitable for you.

CHIP offers you best solution in situations when you have less saving for your retirement and want to supplement the some good amount of cash for your retirement. For more information, please Contact Us or you can also Request a Quote Online.