Tag Archives: Healthcare of Ontario Pension Plan

Interview with HOOPP’s Darryl Mabini

Factor high healthcare costs into your retirement savings strategy: HOOPP

One of the biggest problems retirees can face is unexpected, major healthcare costs in retirement – and that possibility should be factored into retirement savings.

So says Darryl Mabini, Senior Director, Growth & Stakeholder Relations for the Healthcare of Ontario Pension Plan (HOOPP). HOOPP is a $77.8-billion public sector defined benefit pension plan serving healthcare workers in Ontario.

HOOPP recently produced a four-paper series called Retirement Security – Is it Attainable? One of the four papers, called Seniors and Poverty – Canada’s Next Crisis found that 12.5 per cent of Canadian seniors – and a startling 28 per cent of senior women – live in poverty.

A factor behind this, the series suggests, is the lack of good workplace pension plans (the defined benefit type, which provides pensions based on a percentage of your earnings, is rare outside the public sector) and inadequate personal retirement savings.

“People saving for retirement don’t factor in the healthcare costs when they get older,” explains Mabini. While Canadians are proud of their universal healthcare system, he notes, they “are not aware of what it doesn’t cover.”  Some long-term care costs are not covered by provincial plans and can cost thousands a month, he notes. Treating chronic diseases and illnesses can also be expensive in retirement, particularly if you don’t have health benefits, says Mabini.

So retirement income – having enough of it – is critical. “We found that about 40 per cent of Canadians are covered by a workplace pension plan. For the other 60 per cent, it is do-it-yourself; they are saving on their own,” Mabini says. But doing it on your own is hard – the savings are voluntary, not mandatory, and no one tells you how much you actually need to save to be able to afford retirement, he explains.

“Our research found that the amount people have saved is heavily impacted around age 85, once long-term care costs are factored in,” he says. Those who are age 85 and older are at risk for having insufficient income, and because of their longevity; it is usually women who come up short on retirement income, Mabini notes.

“The problem is that those without a good workplace pension plan tend not to save on their own,” he says. They think CPP and OAS will be sufficient, he adds. “The most you can get from CPP, and few get it, is about $12,000 a year at age 65. With OAS, it is about $8,000.” While $20,000 a year may sound OK for a retiree, it isn’t enough when facing long-term care costs of thousands a month, Mabini says.

If you don’t have money to cover healthcare costs, you have to depend on government income supplements and other programs which are not always readily available, he notes.

“There needs to be more education about the importance of retirement savings, and the risks of not having a workplace pension,” he says. “Saving on your own can work, but putting away two per cent of what you make is not adequate for some people. People need to realize the risk of senior poverty.” If you are saving on your own, Mabini recommends setting an income replacement target, making savings automatic and ideally mandatory, pooling, and having a way to turn those savings into a lifetime income string.

The full findings from HOOPP’s Retirement Security series can be found here.

We thank Darryl Mabini for speaking to Save with SPP. The Saskatchewan Pension Plan provides an excellent way to save for retirement if you don’t have a workplace plan, and it offers annuities to turn your savings into a lifetime pension. Find out more at www.saskpension.com.

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

New blogger takes over from retiring Sheryl Smolkin

After nearly seven years of writing insightful and highly informative blogs for the SPP, Sheryl Smolkin has decided to retire. We certainly wish her all the best – good health, long life, and many adventures on the road ahead.

Our new blogger is Martin Biefer. Martin has been writing for 35 years, most recently with the Healthcare of Ontario Pension Plan, but before that with community newspapers in Ontario and Alberta, and for the old Southam company, in their business magazine division.

Martin retired from working full time a few years ago and returned to his hometown of Ottawa, where he lives with his wife, his large and crazy Sheltie, and his cat. He’s trying to break 100 now and then at the golf course, occasionally doubling out at the Legion darts on Wednesdays, and taking line dancing lessons at the nearby Richmond Arena.

He and his wife are SPP members. “I was fortunate enough to have a pension from work, but I still had room for RRSP savings. The SPP is so flexible. I’m actually quite excited to see what will happen when the day comes that I turn the savings into income.”

Martin plans to write not only about saving for retirement, but ways to save generally, the ins and outs of retirement, the importance of health and fitness as we age, and much more.

“I can already see the importance of growing your network of friends once you leave the workforce,” he says. “A lot of seniors find themselves isolated, and that’s not good for their mental health. We are social animals and we need lots of interaction to stay energized.”

For Martin, there are obstacles to saving these days that weren’t there in the past. “Homes are 10 times more expensive than they were when my folks bought in the 1960s. So a mortgage is a much bigger deal than it used to be. People are carrying around much more debt than ever before, and that can prevent them from saving.”

The solution, he says, “is to start small. If you can afford only $5 a week, start with that. Put that away before you pay the bills and buy the groceries. And when you can, increase it to $7.50, then $10. You won’t even miss it, and you’ll be on the road to being a saver.”

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