It is expected that this ratio will further increase to 84 per cent by 2050”. Having spent the same amount of time working as our male friends we have accumulated far less savings. The Canadian Centre for Policy alternatives says, “Women on their own are the poorest of the poor, especially women raising children in lone-parent families, who are almost five times more likely to be poor than those in two-parent families.”
Many of myfemale friends are single, for a variety of reasons: gay, widowed, divorced, sound decision making.
The maximum amount of money we can expect to get from CPP is $9,465 a year. Added to that will be Old Age Security which maxes out at $6,069.96. This gives us a total of $15,534.96. The cut-off for the Guaranteed Income Supplement is $16,512 per year, so if we have no other money we can expect to receive a maximum amount of $670 per year. Total: $16,205.75 per annum.
Some of us have some savings in RRSPs, some have pensions and some have neither. What we do have in common is that we all own property in Toronto. Some of us own our homes outright and some still have mortgages. Thanks to the Toronto real estate market, for all of us, our homes represent our biggest asset.
The first question becomes: can we even afford to remain in our homes. If our house is assessed at $500,000 (well below the average 416 telephone exchange real estate home value) then we will pay $3,855.99 in property taxes alone. That works out to 24% of our government pension. Food is estimated to be $200 to $300 per month, so let’s use $200. That’s $2400 per year – 15% of our pension. If we have cable, internet and home phone; another $110 per month or $1320 per year (8.14%). The Canadian Automobile Association reports that owning a 2010 Cobalt, including depreciation, costs $8,539.94 per annum (52.7%). Okay, forget the car (so I’ll be selling the cottage too, since I can’t get there without a car). A metro pass for seniors in Toronto runs $1248 a year (7.7%). Heat, hydro and water cost approximately $350 per month or $4200 per annum (25.9%). The Ontario Drug Benefit kicks in at aged 65 and will cover most of the prescription cost for drugs that are on their list of approved prescription products, less $100 deductible per year and the normal dispensing fee of approximately $8.00 per. Heaven forbid you need something not on that list. I could go on, but I think the point has been made. Trying to live on a government pension plan (I don’t mean the ones the politicians get) and staying in our current home just won’t work. I’m at approximately 80% of my pension, I’ve lost my car and my cottage and I barely have enough money left to go bowling once a week. And I don’t like to bowl.
As a real estate sales person I meet many elderly people who have stayed in their homes and are living horrible lives because parlaying their homes into a better standard of living is just too overwhelming. I know from personal experience that it is essential to make decisions before you dig yourself a hole so large it seems impossible to climb out.
Complicating all of this are three other variables. First of all, prices and taxes continue to rise, second, studies on elderly poverty rates, which the government will tag your pension amount to, are beginning to take into account home ownership as part of your yearly income and lastly, there’s the worry that the Canadian government will not be able to keep up with the growing demand made on revenues that the growing number of seniors turning 65 will put on our balance sheet.
So, what are our options? Well, clearly our homes must be central to our retirement plans. And, certainly for me personally, my detached single family home will be unaffordable.
In a nutshell we have 5 choices: Sell our homes and move into a condo or co-op in Toronto. Make a part of our current home a rental. Move out of the city. Pool our resources and buy something together or, lastly, stay in our homes until we are either taken out in a box or thrown in debtor’s prison.
We’ve all agreed that the last option is what we’ll end up with if we put our head in the sand and do nothing but we’re not do nothing women. We’ve all struggled with the notion of leaving our own community but finally have come to realize that our community really is each other and that by sticking together we can retain our community in any neighbourhood.
Moving out of the city is a good option for maximizing the money left over from the sale of our Toronto homes. The average home price in, for example, Peterborough is 284,009. There is a regional hospital in Peterborough and it is a nice town, with theatres and an art gallery, one and one half hours from Toronto and a stone’s throw from the Kawarthas. Hamilton is also much less expensive than Toronto but a quick drive to Toronto. There are many nice towns and smaller cities whose real estate prices are far less than Toronto’s. Generally the more rural the property, the lower the cost of buying a home (waterfront can be an exception to this).
Unfortunately health care is a very serious issue in rural areas. I recently spent a fair amount of time with a friend receiving chemotherapy here in Toronto. I can’t tell you how many people we met who were spending all of their time driving to and from Toronto for treatment. They would be at the hospital most of the day, having left their homes at six in the morning and, once chemo was finished, spend the evening driving back home again. Frankly, I knew then that rural life wasn’t going to be for me. Friends of mine who live in cottage country are always making trips to Toronto for tests and Doctor’s appointments and many who thought they would move to their cottages, are rethinking those decisions.
While selling our homes and buying a condo or co-op here in the city is certainly an option, we all worry about escalating maintenance costs, which, if we are all living on our own, means shouldering these cost increases on our own. It also means that instead of dealing with a few people to make decisions about our property we will be dealing with potentially hundreds. We’re just not that amenable.
Staying in our individual homes and renting part of our home out is another possibility but none of us own homes which could accommodate a rental and we would all need to sell and move to purchase a property that would. None of us wants to be alone in our homes with a stranger either. While financially this option is actually not a bad option at all (a $1000 basement apartment puts another $12000 in our pockets – less added hydro etc.). Certainly for a couple who wants to be in a house, this is a very good option. Sell, buy a bungalow with a basement apartment, rent the basement and pocket the money or, reduce the rent in exchange for help maintaining the home.
For my group of friends none of these options appeal so we have begun to look at buying an apartment building which would house all of us. On today’s Toronto MLS there are four four-plexes for sale under a million dollars. There is a 6 unit building for sale in Mimico, right down by the lake, listed at 1,250,000 and an 11 unit building for sale in the Dufferin/Wilson area listed at 1,350,000. If six of us buy the 6 unit building, it would cost us approximately $210,000 per two bedroom unit. If we purchase the Dufferin and Wilson area building it would cost us $225,000 each and we could rent the extra units, which would carry the costs of the building. For myself, I find the notion of walking 10 feet down the corridor to my friend’s apartment to whine about how stiff I was when I woke up this morning intensely comforting. In exchange I’m happy to hear about their bout of constipation. It may not sound like an exciting lifestyle to a 30 year old but it’s what floats our boats these days. We also like the idea of letting one of the units rent free in exchange for maintenance duties because, well frankly, hell can freeze over before I lift another snow shovel. I’ve read the reports; my friends have read the reports: old people who shovel snow die.
The reality is that for the elderly, the best scenario is independence coupled with support. I’m passed the point of counting on the government to provide this kind of a lifestyle for me. I don’t think they can afford to even if they were inclined to. If we hope to enjoy our senior years, we are going to need to come up with strategies collectively to provide the best care for each other and we are going to need to sell our current single family homes to facilitate the changes. While my friends and I have not yet agreed to the when and where, the one thing we do agree on is that we can’t simply put our head in the sand and hope it all works out for the best. We’re all too old and experienced to expect that to happen.