The “Sell the House” Strategy — Why Downsizing Alone Isn’t a Retirement Plan

A growing number of Canadians are banking on their home as their retirement fund. The logic is simple: sell the house, downsize, and live off the equity. In markets like Toronto or Vancouver, this can mean hundreds of thousands of dollars in cash.

But relying solely on this strategy is risky.

Pros:

• Taps into large, often illiquid equity

• Reduces ongoing expenses (property tax, maintenance)

• Can simplify life in retirement

Cons:

• Timing matters — housing markets fluctuate

• Emotional stress of selling the family home

• Downsizing costs (land transfer taxes, realtors, renovations, moving)

• Reduced flexibility — once spent, that equity can’t be replaced

Many retirees overestimate how much net cash they’ll walk away with after fees and new housing costs. Some also fail to factor in longevity — what happens if you live 30+ years after selling? Without investments or other income streams, you may outlive your money.

A financial advisor helps:

• Evaluate the true after-tax, after-cost benefit of selling

• Build a hybrid plan using equity + retirement accounts

• Ensure proceeds are invested to support a 20–30 year retirement timeline

Your home can support your retirement — but it shouldn’t be the only plan.

Retirement Planning

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