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Suzanne Gerweck and her husband, Keith Branscombe, sold their central Toronto home and moved to Cobourg, Ont.
Suzanne Gerweck and her husband, Keith Branscombe, sold their central Toronto home and moved to Cobourg, Ont.

Globe retirement

Moving to a small town can fund your retirement. But it's not for everyone Add to ...

After Suzanne Gerweck was downsized from her corporate marketing position in 2007, she decided to retrain as a real estate agent. But while she was getting her new business off the ground, she and her semi-retired husband were accumulating debt.

So six months ago, when the couple spotted an attractive three-bedroom, three-bathroom townhouse on a visit to Cobourg, Ont., a town on the shore of Lake Ontario, they made a snap decision to buy it and sell their home in downtown Toronto’s Riverdale neighbourhood.

“Our new place is three minutes from the beach and three minutes from Main Street,” says Ms. Gerweck, who now works as a real estate agent in Cobourg. “And we have good friends in the area.”

Even better, they paid less than half what a similar property would have cost them in Toronto, enabling them to pay off debt and pocket some cash. “We wanted to downsize and take some of the equity out of our city home that we’d been in for 20 years,” Ms. Gerweck says. “We were up for the change, and we needed more savings for retirement and some flexibility in our expenses. That was the big driver.”

Debt levels among seniors are rising. Fewer Canadians have a workplace pension plan, so an increasing number are funding their own retirement. A 2013 Ipsos Reid survey of 12,000 Canadians found seniors were entering retirement more indebted than ever – debt levels rose by 15 per cent year over year.

With low returns on investments in recent years and parents increasingly providing financial help to adult children, it’s not surprising that a Conference Board of Canada study found that a high percentage of older Canadians – including those “arguably on the cusp of retirement” at 55 to 64 – felt that they had not saved enough.

But those who own a home in one of the country’s big cities have an ace in their hand.

Ms. Gerweck is not the only baby boomer contemplating cashing in on the big-city real estate boom and moving to the country. Statistics Canada’s research shows that many smallish communities – particularly those fairly close to large cities – are attracting more than their share of seniors.

The Vancouver Island town of Parksville, B.C., for example, had the highest percentage of seniors at 38.6 per cent, followed by Elliot Lake, Ont., at 35.1 per cent. Cobourg rounded out the top three on the list at 26.5 per cent.

“Particularly if you live in Toronto or Vancouver, you might be able to put a million dollars in your pocket by selling your home and moving out of the city,” says Adrian Mastracci, a fee-only portfolio manager and financial adviser with KCM Wealth Management Inc. in Vancouver.

There are benefits to such a move: a slower pace of life, proximity to healthy hobbies such as golf, biking and cross-country skiing and more financial freedom. Still, Mr. Mastracci points out that if you are comparing costs, make sure you look at all of the expenses – including differing property tax rates, renovations to the new house, possibly an extra vehicle, travel expenses to visit friends and family in the city and costs to maintain a property – particularly a large one in the country.

And it should not be just about the money. “Take a step back and look at what you do,” Mr. Mastracci says. “What’s your daily routine? Do you like nothing more than a walk in the country, or do you prefer to view the ‘wildlife’ from a coffee shop? Is it important to you to have opera and theatre nearby or are you more concerned about having a beach?

“You want to make sure the place you choose fits your lifestyle. If anything, that is probably more important in retirement,” he says.

If possible, before you make the final decision to move, do a trial run, Mr. Mastracci says. “Then you can say, ‘I was there in the wintertime for a couple of months and it’s not so bad.’ Once you sell your home and buy elsewhere, … well, that’s a major step.”

Wendy Buckner and Jim Hale, of Toronto, spent two years living in Collingwood, an Ontario town known mostly for its ski hills – an experience that cured them of any illusions that they would be happy living in a small town. The couple owned a chalet there and had toyed with the idea of moving there for good. So in September of 2011, when their children, Lauren and Cam, became increasingly involved in ski racing, they decided to rent out their home in the city and try it out.

“I hated it from the word go,” Ms. Buckner says. “It’s beautiful up there during the 10 weeks of ski season. It’s lively and friends come up for the weekend to ski. What people forget is that being there all year-round is not the same thing at all.”

Ms. Buckner and Mr. Hale, who had lived in downtown Toronto until then, found themselves hopping in their cars to do everything, from ferrying the children to school to going for coffee or grocery shopping. And they felt caught between the “townies” and the “citiots” (which is how locals referred to weekend visitors from the city). “Don’t get me wrong, there are some very nice people up there, but I didn’t sort of fit in with any group,” Ms. Buckner says.

The good news was they had not sold their place in the city. In 2013, when Cam finished high school, they enrolled Lauren in boarding school for two years and moved back to Toronto. They sold the chalet a year later and have not looked back.

As for Ms. Gerweck and her husband, their experience has been positive so far. After four months, they are fully immersed in small-town life. He enjoys long rambles along the beach and works on his projects. Apart from her work, she sings in a choir and volunteers.

They still make the trip to Toronto regularly to visit their daughter, or go to dinner parties and other events. “It’s a bit of a trade-off,” Ms. Gerweck says, “but the financial pressure is much less, and that makes all the difference.”

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