Turns out 2025 promises to be a big year for Canadians aged 55 or older. According to HomeEquity Bank, Canadians nearing or in retirement are actively looking for ways to create stable and purpose-led lives when it comes to financial planning and the primary tool of choice: their home.
"Despite financial headwinds, Canadians aged 55 or older are taking an active role in creating stability and purpose in their lives by finding new ways to connect with family, and continuing to pursue independence, dignity and empowerment in 2025," explained HomeEquity Bank President and CEO Katherine Dudtschak in a recent statement. "Following a period of extended inflation and increased monthly expenses, we see a desire amongst Canadian homeowners 55 [sic] or older to explore new ways to access the savings in their homes to achieve their goals."
Dudtschak and her colleagues at HomeEquity Bank offered five predictions for 2025 when it comes to Canadians aged 55 or older — and the biggest beneficiaries will be adult children and grandchildren.
Changing approach to legacy gifts
According to HomeEquity Bank analysts, the biggest change coming in 2025 is the way older generations will approach legacy gifts and gift-giving. The older generation realizes that their younger counterparts will benefit more from financial help now rather than down the line, explains Dudtschak.
For example, over half (53%) of Canadian homeowners aged 55 and above have gifted a significant amount of money to their adult child or grandchild. Drilling down further and more than half (55%) of those gifts were valued at $25,000 or more. If this continues, then "living legacy" gifts will become the most popular form of inter-generational wealth transfer — beating out money to pursue educational pursuits, wedding gift or money for a first home.
While many children and grandchildren are grateful for the financial aid offered by grandparents, older Canadians need to be mindful of how specific loan types can impact their current living costs and their future lifestyle aspirations. For instance, there was a 16% increase in new reverse mortgage holders using funds for living legacy gifting purposes. While this is generous, older Canadians need to be clear how these more-expensive debt options will impact their current budget or their future beneficiaries.
Rise in ‘skip-gen’ bonding
While living legacy gifts — significant financial gifts made while the parent or grandparent is still alive — so is the emphasis on family bonding. While travel with adult children continues to be important, more grandparents have "skip-gen bonding" experiences, where grandparents travel with younger relatives (and without adult children chaperones).
However, there is a darkside to this trend. Over the last four years (since 2021), there’s been an 86% increase in new reverse mortgage holders who took out this type of equity loan in order to pay for travel with their Gen Z and Gen Alpha grandchildren. According to HomeEquity Bank analysts, this trend is expected to increase in 2025 — with grandchildren the biggest beneficiaries.
House rich Canadians’ new approach
According to Ipsos, the number of Canadians 55 and up who are considered house rich, cash poor – defined as less than $50,000 in investable assets and own a home with at least $400,000 in equity – has increased by 66% since 2021 to 2.66 million. For many in this situation, this means a whole lot of money that could be used to enhance your standard of living is locked into the value of your property.
Another issue is how the rising cost of living has impacted older Canadians on a fixed income. In 2025, more than 1.2 million mortgages up for renewal — and a portion of these renewals are for older Canadians who may already feel the pinch of a limited budget. Faced with significantly larger payments at renewal time, HomeEquity Bank expert predict an increasing reliance on reverse mortgages as an alternative. This helps keep monthly costs to a minimum, while allowing older Canadians to age in place.
— with files from Romana King
This article Canadians aged 55 or older set to significantly help younger generations—but need to make wise living legacy decisions originally appeared on Money.ca
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
