Tag Archives: Exchange Traded Fund

Jun 25: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

1,000 boomers a day are turning 65 and gearing up for retirement
The crowd of people punching the clock at work for the last time is growing, writes Jim Yih, author of the Retire Happy blog. He notes that 7 million Canucks will be retiring in the next decade.

“We hear too many doom and gloom scenarios about what retirement holds from so many sources,” writes Yih. Instead, he offers some key retirement readiness tips from those who are already over the wall.

First, he says your health and fitness should be a priority. “Your health is the basement you build on, so it needs to be as solid as possible,” he advises.

Next, be prepared for retirement, he writes. Know your sources of income, be prepared for relationship and psychological impacts of not working, think about working part time and generally “educate yourself to avoid retirement shock,” Yih advises.

Where possible, Yih states, you should avoid retiring with debt. That’s not easy, he writes, given that about 59 per cent of us are indeed in debt at retirement age. But debt in retirement can be a black hole that can lead to “a downward spiral” in income, he warns.

His last advice is about retirement savings – “start saving earlier, and save more,” he writes.

It’s a great blog to check out.

If you are thinking about retirement savings, another great resource is the Saskatchewan Pension Plan. Visit their site and find out how you too can make retirement savings easy and automatic.

Blog focuses on the ins and outs of investing
One of our Save With SPP readers suggested we take a look at the Stocktrades blog — and we thank our reader for the suggestion.

Investing is not for the faint of heart. The blog helps do-it-yourself investors through the often complicated maze of terms and tactics. There’s a lot of helpful information on this blog and if you are into picking your own stocks, bonds, ETFs and the like, this will be a helpful resource.

It’s certainly worth reading, so we again thank our reader for the tip.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Group vs Individual RESPs: What’s the difference ?

The “holy trinity” of tax-assisted savings plans available to Canadians are TFSAs, RRSPs and RESPs. RESPs (Registered Educational Savings Plans) are primarily designed to help families to save for post-secondary education.

Each year, on every dollar up to $2,500 (to a life time maximum of $50,000) that you contributed to an RESP for a child’s education after high school, a basic amount of the Canada Education Savings Grant of 20% may be provided. Depending on the child’s family income, he/she could also qualify for an additional amount of CESG on the first $500 deposited, which means $100 more if the 2017 net family income was $45,916 or less and up to $50 if the 2017 net family income was between $45,916 and $91,831.

In total, the CESG could add up to $600 on $2,500 saved in a year. However, there is a lifetime CESG limit of $7,200. This includes both the basic and additional CESG. Lower income families may also be eligible for the Canada Learning Bond (CLB) that could amount to an additional $2,000 over the life of the plan.

Contributions to RESPs are not tax deductible, but the money in the account accumulates tax-free. Contributions can be withdrawn without tax consequences and when your child enrolls in a university or college program, educational assistance payments made up of the investment earnings and government grant money in the RESP are taxable in the hands of the student, generally at a very low rate.

When our children were young, we purchased Group RESPs for them and their grandparents also purchased additional units. I was so impressed with the program that I even took a year before transitioning from family law to pension law and sold RESPs.

Each child collected about $8,000 from the plan over four years of university, which helped them to graduate debt free. Fortunately, both my daughter and my son took four straight years of university education so there was no problem collecting the maximum amounts available to them minus administrative fees.

However, I’ve come to realize the potential downside of Group RESPs so we started contributing $200/month to a self-administered plan with CIBC Investor’s Edge for our granddaughter soon after she was born. She is now 5 ½ and as I write this, there is already $22,000 in the account.

Our decision to self-administer Daphne’s RESP was influenced in part by what I learned from other personal finance bloggers about the potential downside of group plans.

Robb Engen notes that group plans tend to have strict contribution and withdrawal schedules, meaning that if your plans change – a big possibility over 18 plus years – you could forfeit your enrollment fee or affect how much money your child can withdraw when he/she needs it for school.

With a Group RESP, contributions, government grants and investment earning for children the same age as yours are pooled and the amount minus fees is divided among the total number of students who are in school that year. Typically the pool is invested in very low risk GICs and bonds.

In contrast, there are no fees in our self-administered plan other than $6.95 when we make a trade. The funds are invested in a balanced portfolio of three low fee ETFs. We can easily monitor online how the portfolio is growing and as Daphne gets closer to university age we can shift to a more cautious approach.

Macleans recently reported that the total annual average cost of post-secondary education in Canada for a student living off-campus at a Canadian university is $19,498.75 and it will be much higher by the time your child or grandchild is ready to go off to college. So learn as much as you can about RESPs, get your child a social insurance number, set up a program and start saving.

However, as Engen suggests before you choose a group or individual RESP provider make sure you read the fine print and ask about:

  • Fees for opening an RESP;
  • Fees for withdrawing money from a RESP;
  • Fees for managing the RESP;
  • Fees for services and commissions;
  • What happens if you can’t make regular payments;
  • What happens if your child doesn’t continue his or her education; and
  • If you have to close the account early, do you have to pay fees and penalties; do you get back the money you contributed; do you lose interest and can you transfer the money to another RESP or different account type.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

2018 New Year’s Resolutions: Expert Promises

Well it’s that time again. We have a bright shiny New Year ahead of us and an opportunity to set goals and resolutions to make it the best possible year ever. Whether you are just starting out in your career, you are close to retirement or you have been retired for some time, it is helpful to think about what you want to accomplish and how you are going to meet these objectives.

My resolutions are to make more time to appreciate and enjoy every day as I ease into retirement. I also want to take more risks and develop new interests. Two of the retirement projects I have already embarked on are joining a community choir and serving on the board; and, taking courses in the Life Institute at Ryerson University. After all, as one of my good friends recently reminded me, most people do not run out of money, but they do run out of time!

Here in alphabetical order, are resolutions shared with me by eight blogger/writers who have either been interviewed for savewithspp.com or featured in our weekly Best from the Blogosphere plus two Saskatchewan Pension Plan team members.

  1. Doris Belland has a blog on her website Your Financial Launchpad . She is also the author of Protect Your Purse which includes lessons for women about how to avoid financial messes, stop emotional bankruptcies and take charge of their money. Belland has two resolutions for 2018. She explains:
  • I’m a voracious reader of finance books, but because of the sheer number that interest me, I go through them quickly. In 2018, I plan to slow down and implement more of the good ideas.
  • I will also reinforce good habits: monthly date nights with my husband to review our finances (with wine!), and weekly time-outs to review goals/results and pivot as needed. Habits are critical to success.
  1. Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances and blogs at Money We Have. He says, “My goal is to work less in 2018. I know this doesn’t sound like a resolution but over the last few years I’ve been working some insane hours and it’s time to cut back. The money has been great, but spending time with my family is more important.”
  1. Chris Enns who blogs at From Rags to Reasonable describes himself as an “opera-singing-financial-planning-farmboy.” In 2017 he struggled with balance. “Splitting my time (and money) between a growing financial planning practice and an opera career (not to mention all the other life stuff) can prove a little tricky,” he says. In 2018 he is hoping to really focus on efficiency. “How do I do what I do but better? How do I use my time and money in best possible way to maximize impact, enjoyment and sanity?”
  1. Lorne Marr is Director of Business Development at LSM Insurance. Marr has both financial and personal fitness goals. “I plan to max out my TFSAs, RRSPs and RESPs and review my investment mix every few days in the New Year,” he notes. “I also intend to get more sleep, workout 20 times in a month with a workout intensity of 8.5 out of 10 or higher and take two family vacations.”
  1. Avery Mrack is an Administrative Assistant at SPP. She and her husband both work full time and their boys are very busy in sports which means they often eat “on the run” or end up making something quick and eating on the couch.  “One of our resolutions for next year is to make at least one really good homemade dinner a week and ensure that every one must turn off their electronic devices and sit down to eat at the table together,” says Mrack.
  1. Stephen Neiszner is a Network Technician at SPP and he writes the monthly members’ bulletin. He is also a member of the executive board of Special Olympics (Kindersley and district). Neiszner’s New Year’s financial goals are to stop spending so much on nothing, to grow his savings account, and to help out more community charities and service groups by donating or volunteering. He would also like to put some extra money away for household expenses such as renovations and repairs.
  1. Kyle Prevost teaches high school business classes and blogs at Young and Thrifty. Prevost is not a big believer in making resolutions on January 1. He prefers to continuously adapt his goals throughout the year to live a healthier life, embrace professional development and save more. “If I had to pick a singular focus for 2018, I think my side business really stands out as an area for potential growth. The online world is full of opportunities and I need to find the right ones,” he says.
  1. Janine Rogan is a financial educator, CPA and blogger. Her two financial New Year’s resolutions are to rebalance her portfolio and digitize more of it. “My life is so hectic that I’m feeling that automating as much as I can will be helpful,” she says. “In addition, I’d like to increase the amount I’m giving back monetarily. I donate a lot of my time so I feel like it’s time to increase my charitable giving.”
  1. Ed Rempel is a CFP professional and a financial blogger at Unconventional Wisdom. He says on a personal finance level, his resolution are boring as he has been following a plan for years and is on track for all of his goals. His only goal is to invest the amount required by the plan. Professionally, he says, “I want 2018 be the year I hire a financial planner with the potential to be a future partner for my planning practice. I have hired a couple over the years, but not yet found the right person with the right fit and long-term vision.”
  1. Actuary Promod Sharma’s resolutions cover off five areas. He says:
  • For health, I’ll continue using the 7 Minute Workout app from Simple Design.
  • For wealth, I’ll start using a robo advisor (WealthBar). I’m not ready for ETFs.
  • For learning, I’ll get my Family Enterprise Advisor (FEA) designation to collaborate better in teams.
  • For sharing, I’ll make more videos.
  • For giving, I’ll continue volunteering.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

May 15: Best from the blogosphere

By Sheryl Smolkin

This week we present an eclectic mix of posts from Canadian money bloggers, some of whom have been posting for years but have not previously been cited in this space.

On HowToSaveMoney.ca, Heather Clarke offers 7 Ways To Declutter Without Spending A Fortune, Instead of buying costly clear lucite boxes, monogrammed fabric bins, or classic wooden divided trays, she says that using a little creativity and a few basic craft supplies you can make attractive, low cost storage solutions. But I’m not very crafty, so I think the two year rule is the best way to minimize clutter — if I haven’t used an item in 24 months, it’s time to get rid of it.

Recently governments in British Columbia and Ontario have enacted new laws to try and cap runaway house prices in some markets. Firecracker and her husband Wanderer who blog on Millenial Revolution are typically in favour of a laissez faire approach. But as reported in Your Thoughts on Government Intervention, the majority of their readers disagree. Of 356 readers who responded to a survey they conducted, 198 believe the government should intervene. And about one-third believe a tax on speculators is the most effective strategy.

Does your financial advisor really ‘deserve’ to be paid? Doris Belland tackles this thorny issue in a recent post on Your Financial Launchpad. She notes that the financial advice industry is undergoing a profound shift in which several economists plus some of the worlds’ most successful investors and Nobel Laureates argue persuasively that the higher fees associated with traditional investment products have a negative effect on investors’ results.

Ed Rempel explains Why he will never own an ETF or index fund. He says that the average fund manager can’t beat the market, but superior fund managers clearly can. Based on his research and investment returns, he believes he has selected All Star Fund Managers who have consistently exceeded the relevant indices. “Performance fee models with a very low base fee give you the low fee advantage of an ETF or index fund – plus a good chance of above index returns,” Rempel concludes.

And finally, on Financial Uproar, Nelson introduces The Too Much House Equation. “We constantly rag on people who buy too many video games or finance vacations, but we cheer people who make a similar mistake with their houses,” he writes. “The fact is the easiest way for the average person with only a small net worth to save more is to cut their fixed expenses, starting with housing.”


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Nov 23: Best from the blogosphere

By Sheryl Smolkin

This week we are back to everyone’s favourite topic – how to get ready for retirement. If you haven’t already maxed out your 2015 Saskatchewan Pension Plan, RRSP and TFSA contributions, now is the time to make sure you are “on plan” before you start spending more than you can afford in the run up to the holiday season.

If you are not a Globe & Mail regular reader, check out the new Globe Retirement series. I particularly like Boomer retirement planning: A nine-step guide to ease your mind by our perennial favourite Rob Carrick. The publication’s online fee disclosure tool will show you how the advisory fees you pay compare with other investors.

Michael James on Money writes about Retirement Spending Stages. While there is evidence that older seniors spend less, he says spending too much in the early years of retirement could mean in your later years all you have left to live on is government benefits and any pension streams you may have.

In Save like this, retire like that – My story about early retirement in style Mark Seed interviews “RBull” from Canadian Money Forum who retired in 2014 in his 50s. He estimates that his savings rate averaged a little over 20% for about 20+ years. Approximately two years before retiring he sold almost all his stock positions to purchase broad market ETFs to simplify the portfolio, increase diversity and keep fees low.

Dan Wesley who blogs at Our Big Fat Wallet is in an enviable position. His TFSA and RRSP are Maxed Out and he is trying to decide where where to put his additional savings. Options include paying down the mortgage, opening a TFSA for his wife and opening a taxable investment account.

In MoneySense, Jon Chevreau discusses Saving mistakes you’re probably making. The single biggest mistake of course is NOT saving at all, says Adrian Mastracci, president of Vancouver-based KCM Wealth Management Inc. The easiest thing in the world is to spend 100% of what you earn or even worse, fall into debt. Chevreau says at the root of the failing-to-save mistake is the failing-to-live-within-your-means error.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Oct 6: Best from the blogosphere

By Sheryl Smolkin

It’s October already! How time flies. Here are some interesting posts from some of our favourite, always prolific personal finance bloggers.

On Balance Junkie, Tom Drake discusses options for Banking on Your Mobile Phone. There are smartphone apps to run your business, create a budget, check your bank account and set up mobile payments.

How Behavioural Biases Kept Me From Becoming An Indexer is a confession from Boomer & Echo’s Robb Engen that it’s tough to sell a portfolio of high performing winning dividend stocks – his “babies” that he has nurtured through a five-year bull market. Nevertheless the more he reads about, writes about, and teaches others about investing, the more he is convinced that convinced that passive investing (indexing) is the right approach.

4 Questions to Ask Before Buying a Mutual Fund by Our Big Fat Wallet’s Dan Wesley include how the fund has performed as compared to other funds and the costs of ownership. Like Engen, he concludes that if an actively managed fund can’t beat the index, you’re likely better off with a low-cost index Exchange Traded Fund (ETF).

Whether you are a snowbird planning winter away from Canada’s cold climate or dreaming of a one week all inclusive getaway, take a look at Frequently Never Asked Questions for your Travel Medical Insurance on Bank Nerd. Did you know that in general, an emergency due to a pre-existing condition is not covered?

And finally, on Retire happy, Sarah Milton addresses the question Should New Canadians join a Group RRSP? She agrees that RRSP accounts are intended as a vehicle for retirement savings but says that doesn’t mean they only have value if you plan to retire in Canada.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.