Out of a few peer blogs that I’ve read, Sophia Prieto’s blogpost [1] on housing affordability for retirees in Vancouver stood out to me. Since the issue she researched is based here in Vancouver, I found her blog very refreshing and relevant. In her blog, Prieto talks about a false assumption that many retired residents have about owning a house to supplement their retirement. She states that the present value of homes in Vancouver might change in drastically in the future, le-
(Above) Affordability crisis for retirees (vancitybuzz.com)
aving the retired home owner to less desirable alternatives, such as giving up their homes for smaller houses, selling or renting out their home, or taking on a reverse mortgage. In this case, Prieto suggests retirees to avoid debt and financial vulnerability by investing into saving accounts, registered retirement plans, and Canada’s pension plan.
After reading the blog, I realized that my chances of purchasing a substantially large retirement home in Vancouver without some degree of critical financial worry seems grim. However, I then found a CBC article [2] featuring a slightly-over-30 couple who have retired last year and have thrived within the expensive real estate markets of Vancouver. The couple’s secret is their rejection of an expectation that society imposes on us: home ownership. While Leung calls the standard a “cult,” Shen argues alongside her husband that the best way to achieve financial freedom is to “[d]itch the house.” The two both led successful careers as computer engineers, but when an unsuccessful investment of half a million dollars in a house went down the drain, the couple decided to invest their remaining $500,000 into stocks and fixed income investments. Through careful investment and savings, the couple doubled their money to $1 million in a year, quit their jobs, and traveled the world without the need to ever pay rent.
(Above) Shen and Leung save their money to travel the world (cbc.ca)
If following the couple’s manifesto is the path to financial stability, I would gladly give up the idea of settling down in a nice, spacious house after retirement. However, there are some factors that make me question the viability of Leung and Shen’s method of living. Would I have saved up enough money to afford travel expenses? Would I get a good return from my half-a-million worth of investments from a constantly fluctuating market? Could I even make or save half a million dollars to invest with in the first place? After weighing the possibilities, I’m convinced that Prieto’s advice on investing wisely into retirement plans and moving into smaller houses in the suburbs is likely the most feasible method for most retirees in a city like Vancouver.
_________________________________________________________________
[1] Taken from blogs.ubc.ca
[2] Taken from cbc.ca
Word count: 447