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Watching HGTV again tonight.

Another one of those good-looking-man-renovating-a-home shows. (I really do watch for the ideas – the hunky-man thing is just a bonus!)

This is Scott McGillivray. His show is called Income Property – he shows interested buyers homes with income potential. There are a variety of reasons why people want an income suite in a home – might be to help with the mortgage so they can get ahead, it might be the start of a rental business they are wanting to pursue, sometimes they want to give a relative a hand for the short term then have a money-maker on their hands as time goes by.

In the show I’m watching tonight, the young couple seems to be wanting to get a good start in the real estate market. They will have income up the road if their future children continue on to post-secondary education, and then the husband said “And then it will be our retirement plan.”

Now let me slide sideways into a talk-radio show I often catch while running my errands on the weekend. Fred Snyder is a financial consultant with some pretty serious credentials and accolades. He is no-nonsense and is really emphatic about having a financial plan – just like you should have a health plan and a goals plan and a retirement plan. I have learned some very important things and he has spurred more than a few research missions for me (resulting in a few blog posts, thank you, Fred!)

Just recently Fred was emphasizing the unreliability of using your home as a retirement plan. I think many people believe that when they retire they will downsize and the capital in their property will be the funds they use to live the lifestyle they are hoping for.

There was probably a time when that was a great idea, but the housing markets have been so volatile in recent years it is no longer a reliable option. We have seen housing bubbles burst and the outfall can be tragic. There is no longer any reliability in that plan.

Now, getting back to the young couple on Scott’s show… if they are just starting their lives together and their plan is to acquire a number of properties which will then give them multiple incomes with increasing profit as mortgages are paid down, then that’s another matter. Their primary residence will be a safe and paid for home for them and their other properties will provide supplemental income and, if Scott has had a hand in it, the rents will be pretty sizeable.

At our age, we probably don’t have the time or money luxury to start acquiring properties and getting them paid down before we retire.

So, it is up to us to figure out what retirement will look like. Will you rely on whatever government pensions provide you? or are you going to take the bull by the horns and take control of creating for yourself the income you decide will fund the retirement you plan on having?

Your call!