Across Canada, we’re seeing a huge increase in housing prices. So, whether you’re currently paying rent, have a mortgage or other home expenses, housing costs are becoming a major factor impacting financial security in retirement.

To help set you on the right path, this article explores the connection between home ownership and your life stage, managing a mortgage while building home equity, and where you can turn for help if you’re buying a home or renewing your mortgage.

For ease, we’ve divided this article into two parts.

Part 1 looks at your life stage and what points to focus on when buying a home at that stage.

Part 2 then looks at what to keep in mind if you’re renewing your mortgage, how home equity can help your financial picture and what resources CSS offers you.

Part 1 – Life stages and buying a home

This section highlights three different life stages and what to keep in mind when buying a home in each stage.

1. Early and mid-career stage: balancing today’s needs vs tomorrow’s

Buying a home is a major financial decision – and it’s normal to feel some pressure to get it right. Your needs and budget will differ from everyone else when it comes to housing.

If you’re in your twenties or thirties and in a position to buy your first home, congratulations. It’s an important step in building your financial future.

Finding the right balance can feel challenging, especially as housing costs rise. However, the key at this stage is knowing you have a budget that can handle a mortgage, property taxes and your other monthly living expenses.

If you decide to become a homeowner, you can take comfort in knowing that you’re still saving for your retirement as a CSS member. Your pension contribution is automatically deducted each pay period. Your contribution along with your employer’s is invested to help save for your retirement.

Focus on:

• • • Choosing a mortgage that fits comfortably within your budget
    • Leaving room in your budget for unexpected changes or expenses
    • Keeping your CSS contributions consistent

Small step, big impact:

Make small adjustments early – whether on your mortgage payment, payment frequency, or adding to your savings. It can pay off down the road.

2. Mid-career and/or pre-retirement stage: Moving and life changes

Your housing needs may change in your thirties and forties. You may be looking to move into a newer and/or larger home. Whatever the reason, it’s worth stepping back and asking how this decision fits into your long-term financial plan.

If you’re upgrading:

• • • Review your cost of living and determine what you can afford
    • Crunch the numbers to see how this home purchase will affect your future financial picture

Ask yourself:
If I buy this home, can I manage my current financial situation, or will it leave me feeling stretched?

Have you moved recently?
Be sure to update your address on myCSSPEN so you continue receiving information about your pension.

3.  Retired stage: two different scenarios

Ideally, most of us aim to have our home paid off by the time we retire. However, life doesn’t always go as planned so you may find yourself still having a mortgage payment once you retire.

Below we highlight two retirees, Janice and Jason. This basic comparison sheds light as to how their home buying decisions affected their long-term financial plan and their retirement.

Janice (CSS retiree):

• • • Mortgage-free

    • Greater flexibility on how she spends her retirement

    • Pension income used for living expenses but not mortgage payments

Overall, life feels simpler in this scenario. Monthly expenses tend to be predictable. This means Janice can use her pension income to cover living expenses while still doing the things she enjoys. There’s less need to worry about your investments or adjust your spending and expenses.

Janice welcomes the peace of mind and flexibility she has in her retirement.

Jason (CSS retiree):

• • • Ongoing mortgage payments

• • • Greater portion of pension income used for mortgage and living expenses

    • More financial pressure on monthly retirement income

Jason still has a monthly mortgage payment in this scenario. His income depends on investment performance and withdrawal decisions. This means Jason pays closer attention to his finances, such as checking balances, adjusting withdrawals, and making trade-offs to stay on track.

While these two scenarios are a simple comparison, they show why reducing or eliminating mortgage debt before retirement can really increase your financial flexibility.

Part 2 – Know your options and where to get help

Here we look at mortgage renewals, managing your home’s equity, and the resources you can access from CSS to keep your finances on track.

1.  Mortgage renewals: take a pause

Mortgage renewals are easy to treat as routine and yet, they’re one of the most important financial checkpoints you have in the moment.

Each renewal is a chance to think about where you’re headed – not just where you are today.

More Canadians are now entering retirement with mortgage debt than in past generations, adding more pressure to retirement income planning.

At renewal, ask yourself:

• • • Do I want to pay off my mortgage before I retire?

    • Am I extending this debt longer than planned?

    • Could I adjust my payments now to create more flexibility later?

    • Would I be able to manage if interest rates increased?

2. Using home equity: helpful, but not free

As your home’s value grows, the equity can be seen as a financial safety net. However, if you use your home’s equity for a line of credit or refinancing, you’ll be taking on more debt.

Be mindful of taking on new debt later in life which may reduce your flexibility in retirement more that you expect. This can lead to using more of your pension income for housing costs.

Insight: Drawing on your home equity can solve short-term debt challenges, but it may limit long-term plans, if not used carefully.

3.  CSS resources to help guide you

Want to see how this works for you? Try using myCSSPEN Compass® to see how different options, such as varying your mortgage payment options, payment frequency, and/or adjusting your retirement age – can change your future income. 

You can compare different scenarios and see the impact in minutes.

Need a second perspective? If you’re unsure how your housing decisions fit into your retirement plan, connect with a CSS Advisor to help walk you through your options and/or next steps.

Final takeaway

As with any big-ticket purchase, being informed is key to making wise choices. Be sure to tap into reliable resources to help you assess your financial situation. This starts with seeking professional advice from your credit union or financial advisor. As a CSS member, you can contact the CSS Advisory Team for guidance, as well as use the CSS online planning tools.

There’s no question that buying your first home or upgrading to a different one is a huge financial commitment. However, home ownership is an investment in your future. And so is being a part of the CSS Pension Plan. While you’re paying your mortgage, you and your employer are also contributing to your retirement plan. Together, you can have peace of mind knowing you’re journey to retirement is on the right track.