One spring six years ago, Peggy Dent, 72, and her partner Annette Dusa, 63, said goodbye to the home they had lived in for 12 years.
Their two-storey, neo-colonial house in Oregon was too big for the two of them, they realized.
It was also, Dent says, constantly draining their finances and energy.
"We felt like slaves to the bank," she says, "we were paying them to live in it."
So, they closed a deal on the property for US$550,000, pocketed what was left from the sale and drove to Winter Garden, Florida, in search of a new home.
But instead of going to an open house, Peggy and Annette wound up at an RV dealership, making a life-changing decision. They became full-time residents of a brand new 38-foot Newmar motorhome.
Ever since, the semi-retired couple and their two Australian Shepherds have been on the road, exploring beautiful sights from the Maritimes to British Columbia.
"The weight of taking care of the house became overwhelming compared to the desire to just leave it behind and do something else," Peggy says. "We were in a place in our lives where things weren't holding us down anymore. So, we thought, 'let's get on the road and see the parts of the country we haven't seen yet.'"
They're not alone.
More retirees are considering radical lifestyle changes as inflation and mortgage costs erode retirement savings. Some are selling their homes and relocating to more affordable cities, others are moving in with their children. And a growing number of retirees are embracing "van life", a simpler way of living and travelling that is typically associated with adventurous 20-year-olds from Vancouver.
"We're really seeing a boom," especially from retirees looking for new experiences, says Shane Devenish, president of the Canadian RV Association, a non-profit organization that works closely with industry stakeholders to develop standards and codes for recreational vehicles.
"I hear people talking about doing it for a year or two and then selling the unit," he says "And others love the lifestyle — they stay in it."
In 2021, global market research firm Ipsos reported that out of full-time RV users in the U.S., 35% were over 55, and nearly half were retired.
In Canada, Ipsos found that 17% of RV users in 2023 (full time or seasonal) were 55 or older. Meanwhile, the number of overall users has been growing: first-time RV purchases doubled over the last two years, from 6% in 2021 to 12% in 2023.
While some might romanticize the frugality of "van life", which values experiences and not things, more retirees will be forced to make sacrifices like downsizing to afford retirement.
A study by Deloitte of 4,000 retirees and near-retirees (between the ages of 55 and 64) showed that 55% of Canadians heading into retirement will have to make significant lifestyle compromises to avoid outliving their savings.
"A lot of retirees are actually going to at least be able to meet that bare minimum lifestyle, or low income, by relying on government programs," says Hwan Kim, partner at Deloitte Canada and co-author of the study. "But that's a pretty low bar."
It's middle-class Canadians who are not going to be able to meet their expectations for retirement and might even be pushed into the low-income group, Hwan says.
"This is a population that will certainly live in anxiety about unexpected costs because they don't have the buffer," he adds.
Part of the reason is that Canadians are living longer than anticipated. Retirees are also increasingly dependant on their homes for wealth, according to the report.
Relying on real estate is risky because it is less liquid (harder to turn into cash), and the market is volatile.
Home equity comprised 46% of Canadians' net assets in 2019 compared with 38% in 1999, the report said. Meanwhile, housing prices increased by more than 318% from 2000 to 2020.
The authors suggest current near-retirees need to have saved at least $340,000, including pension savings, to be able to afford a modest lifestyle until the average Canadian life expectancy of 82.
Sara McCullough, an Ontario-based certified financial planner, says retirees shouldn't count on the value of their homes when planning for retirement. Aside from the uncertainty of moving somewhere unknown, it can be hard to emotionally let go of a place full of memories.
"What I've noticed is, when clients are in a place where they're not comfortable, they start spending more money," she says, "It's stress spending."
Downsizing to a rental unit can also be expensive, as tenants are increasingly subjected to "renovictions" and skyrocketing rents, she said.
Peggy and Annette know a thing or two about the challenges of navigating new spaces and leaving precious belongings behind.
It can be frustrating having to go to new grocery stores on the road that don't have the things you like, Peggy says.
One of the hardest parts of their move was deciding whether to sell furniture that was handmade by Peggy’s father. In the end, they kept it in a storage unit, which costs them a couple of hundred dollars a month.
Sometimes, moving doesn't give us what we want financially, Sara says.
Those who are forced to make radical lifestyle changes can consider finding creative ways to keep those memories alive, she adds.
"You can do some amazing things with digital art," says Sara, suggesting perhaps Peggy could take pictures of her father's beloved gift and create a "wall of furniture".
This article was written by Ana Pereira from The Toronto Star and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
