The tariff war instigated by U.S. President Donald Trump won’t improve the situation. Earlier this month, Bloom surveyed a small sample of younge seniors, aged 60 to 64, about the impact of tariffs on them. This cohort was concerned about their retirement prospects; 61% of that group felt they would need at least $20,000 in “buffer funds” this year in order to feel more financially secure.
“Those who didn’t have the luxury of disposable income through their careers that could have been allocated to building sizeable investment portfolios don’t have the ability to draw on that as a meaningful contributor to their retirement income,” the report said.
This is one reason McCabe founded Bloom. “It doesn’t make sense to completely ignore the largest single asset that most people hold.” It’s not about tapping a million-dollar home to put $500,000 in a bank account, he says. It’s about boosting monthly income efficiently: raising a 4% safe withdrawal rate to 5% or 6%. If the latter, that’s 50% more income, some of it’s tax-free. After all, 75% of Canadian seniors live in their own homes and only 14% to 16% have mortgage debt. “The majority both own their homes and don’t have much debt.”
In addition to offering Canada’s only non-bank reverse mortgage, Bloom offers a Home Equity Prepaid Mastercard that helps tap home equity to a maximum $2,000 a month. The interest rate on it is 6.69%, the same as on its reverse mortgage. “It’s not a credit card. It’s a payment tool… a way to tap into a reverse mortgage in small increments,” says McCabe.
Women tend to be less financially prepared for retirement
While most Canadians are struggling, HOOPP’s survey found that “women and those closest to retirement are especially hard hit with lower savings and higher levels of financial stress.” It also revealed that 49% of Canadian women have less than $5,000 in savings and 28% have no savings at all (compared to 33% and 17% of men, respectively). And 53% of unretired women have not set aside any money for retirement in the last year (compared to 45% of men). Far from being able to put aside money, most Canadian women rank affording day-to-day living as their top financial priority (57%), compared to 49% for men. Compare to the top male priority: saving for retirement (51%, versus 46% of women).
Little wonder that women are much more likely to feel anxious (51%, compared to 39% of men), fearful (50% versus 37%), frustrated (50% versus 42%) and sad (46% versus 36%) because of their financial situation. They’re also more likely than men to be concerned about the cost of daily living, their incomes keeping up with inflation, their housing affordability and having enough money to retire. Bloom’s clients are split evenly between couples and singles, with average household income of $36,000 a year. Government benefits will be in the mid-$30,000s range for couples and in the low 20s for singles.
Matthew Ardrey, portfolio manager and senior financial planner for TriDelta Private Wealth, is not surprised that women are particularly at risk. “From a demographic standpoint, on average they still make less income than men overall and live longer. Talk about a double-edged sword.”
Many find retirement saving “prohibitively expensive”
HOOPP suggests those with employer-sponsored workplace pensions “are better prepared to face these challenges.” The survey found an increasing number of working Canadians feel saving for retirement has become “prohibitively expensive” (70%, up from 66% a year earlier) and 57% feel unprepared. Worse, 13% think they’ll never retire.