Financial scams and fraud are a big problem in Canada. According to the Canadian Anti-Fraud Centre, in 2023 there were over 63,000 reports of fraud, costing its victims almost $570 million.
Increasingly, those frauds have involved mortgages, including a growth in reverse mortgage scams. With the increase in popularity of reverse mortgages as a useful legitimate and beneficial loan option for many retirees (in 2023, reverse mortgages grew by 28% year-over-year), it didn’t take long for financial fraudsters to come up with reverse mortgage scams.
Canadians approaching retirement age face some important decisions about when to start receiving their Canada Pension Plan (CPP) benefits. One of the most compelling reasons to delay CPP benefits is to boost your monthly payments. For every year you delay receiving CPP after age 65, your monthly payment increases by 0.7% a month or 8.4% annually – that means retirees can boost their CPP by 42% by delaying the benefits from age 65 to age 70.
Notice of security interest scams (or NOSI scams for short) have been costing Canadians tens of thousands of dollars, and these NOSI scam artists often target retirees. Originally, it was meant to protect providers of in-home appliances, such as heaters and air con units, from customers who fell behind on payments. A notice of security interest is similar to a lien in that it’s registered against the title of the property. NOSI scam artists use a notice of security interest to force their victims to pay outrageous sums of money for their HVAC, air con or other fixture. NOSI scammers typically target people whom they feel they can easily confuse and trick into signing documents they don’t understand, usually for products they don’t need.
As Canada’s population ages, more and more retirees are seeking ways to maintain their standard of living while staying in their homes. According to an Ipsos survey commissioned by HomeEquity Bank, over 93% of Canadians desire to “age in place”. This growing trend, coupled with the country’s rising property prices, has led to a surge in the popularity of reverse mortgages. For many Canadian retirees, a reverse mortgage can provide a valuable source of supplemental income, allowing them to maintain their standard of living while remaining in their homes. With flexible repayment options and no monthly payments required, reverse mortgages offer a practical solution to the financial challenges of retirement.
In this article, we explain what a LIRA is and how it works. A LIRA is a registered account designed to hold pension assets contributed by you and your former employers. LIRA withdrawal rules vary according to the province where you reside. Most provinces allow you to withdraw up to 50% of your LIRA when you reach 55 and then transfer those funds to a Registered Retirement Savings Plan (RRSP). You can withdraw from a LIRA as soon as you transfer your assets into your chosen income stream option – so a short time after you turn 55, in most provinces. Although LIRA unlocking rules vary by province, there are a number of exceptions that allow you to access your locked-in funds.
A Registered Retirement Savings Plan (RRSP) is a very popular way for Canadians to save for their retirement with some attractive tax breaks that help their savings and investments grow faster. RRSPs provide a considerable tax break whenever you make a contribution; every dollar you contribute reduces your taxable income by a dollar, so it could lead to a significant tax refund at the end of the year. Any amount you pay into an RRSP that is above that limit is considered an RRSP over contribution. The CRA treats RRSP over contributions seriously and you could end up having to pay a penalty, so it’s important to know how to calculate your RRSP over contribution and also how to fix an over contribution to an RRSP.