Help your clients prevent OAS clawbacks with the CHIP Reverse Mortgage

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Many retirees view Old Age Security (OAS) as a financial benefit they are entitled to – especially today as inflation and the cost-of-living soar. However, if some of your clients increased withdrawals from their registered plans this year to help meet cash-flow needs, they might be in for a shock at tax time when their accountant informs them, they will have to repay some of their OAS benefits. Retirees must pay back all or a portion of their OAS if their annual income exceeds $81,761.

Have a plan going forward

Fortunately, there is a way to help your affluent clients plan and avoid having to repay their OAS benefits for the 2023 taxation year. The CHIP Reverse Mortgage by HomeEquity Bank can solve OAS pain points and generate the tax-free cash flow your clients need. With the CHIP Reverse Mortgage, clients 55+ can access up to 55% of their home’s value and turn it into tax-free cash without having to move or sell. Because the money they receive is a loan, it’s not added to their taxable income and does not affect income-tested government benefits like the OAS.

Did you know? Canadians 55+ are Canada’s largest and fastest-growing demographic and have over $1 trillion locked in their home equity.

Inflation taking a toll

Inflation is taking a toll on the financial health of Canadians. Over half say they are having a tough time keeping pace with the rising cost of living. Retired Canadians are feeling the pinch in many ways. Higher prices are happening while volatile markets are contributing to concerns about retirement savings. And rising interest rates are making it more difficult to carry debt. That’s why the CHIP Reverse Mortgage is such an attractive planning solution. It can help your clients maintain or even improve their standard of living – without impacting their government benefits like OAS. With a reverse mortgage, your clients enjoy the convenience of a lump-sum or monthly payout to help with any of their financial needs, including health care costs, home renovations and debt consolidation. Plus, your clients get to stay in the home they love – a goal shared by more than 90% of Canadians.

Did you know? 93%  of Canadians want to stay in their current home throughout their retirement.

Wealth planning benefits

Access to tax-free cash flow provides other planning benefits to you and your clients.

• Tapping into their home equity allows a larger portion of your clients’ registered investments to continue growing on a tax-free basis – potentially providing more assets to leave their heirs.
• Preserving client investment portfolios helps you maintain your assets under management.
• Your clients don’t have to sell investments in a volatile market or borrow funds when interest rates rise.

To learn more about the CHIP Reverse Mortgage by HomeEquity Bank, visit us online or contact a Business Development Manager today.