Should Your Real Estate Be Part of Your Retirement Plan?
For many Canadians, real estate is the most valuable asset they own. Yet when it comes to retirement planning, it’s often treated separately from RRSPs, pensions, or investment portfolios. If you’re a high-income earner approaching retirement, it’s time to ask:
Should your real estate play a bigger role in your retirement strategy?
The answer is often yes—but only if it’s done wisely and intentionally.
Rethinking Real Estate’s Role in Retirement Planning
We tend to think of our homes as static: a place to live, not a financial tool. But as retirement nears, your real estate can become one of the most flexible and powerful assets you have.
Whether it’s your principal residence, a cottage, or investment property, your real estate holdings can be used to:
- Free up cash flow
- Reduce expenses
- Generate income
- Preserve or pass on wealth
Let’s explore a few strategies.
1. Downsizing to Unlock Capital
If you’re living in a large home that no longer fits your lifestyle or maintenance ability, downsizing can be both a lifestyle and financial win. Selling your current home and purchasing a smaller property—or renting—can free up significant equity to invest or use for retirement income.
Consider:
- Will you stay in the same city or relocate?
- What are the tax implications and closing costs?
- Are you emotionally ready to let go of your current home?
2. Reverse Mortgages: A Tool, Not a Last Resort
Reverse mortgages have come a long way. For the right individual—especially someone with significant home equity and a desire to age in place—a reverse mortgage can provide tax-free income without requiring a move.
It’s not for everyone—but in some cases, it can be a strategic way to supplement retirement income while preserving investment portfolios.
Important: Work with a financial advisor who understands how to integrate reverse mortgages into your full financial plan.
3. Income Properties as Retirement Vehicles
Rental properties can provide consistent income during retirement—but they also come with responsibilities. Consider whether you want to remain a landlord or hire a property manager. Also assess:
- Net cash flow after expenses
- Vacancy risks and tenant turnover
- Long-term appreciation and potential capital gains taxes
For some, selling a rental before retirement and investing the proceeds into a diversified portfolio offers more freedom and liquidity.
4. The Cottage Question: Legacy or Liability?
Many high-income Canadians own a cottage or family vacation home. It’s a place of memories and legacy—but it can also bring tax complications, maintenance costs, and difficult decisions for the next generation.
Ask yourself:
- Do your children want it?
- Who will maintain it?
- How will capital gains be managed if it’s passed on?
In some cases, selling or placing the cottage in a trust might better serve your retirement and estate goals.
Final Thoughts
Your real estate assets shouldn’t sit on the sidelines of your retirement plan. When integrated thoughtfully, they can increase flexibility, provide income, reduce taxes, and support your legacy goals.
If you’re wondering how your home, cottage, or investment property fits into your future, don’t leave it to guesswork.
Let’s build a retirement plan that brings all your assets into alignment—including your real estate.
👉 Book a consultation to explore how to retire with peace of mind and purpose.
