Retirement is a sort of grey area for most of us – a destination that we’d like to arrive at one day, but one we know very little about. But research shows that life after work may have the hidden benefits of extending your life and boosting your health.
A Dutch study, published in the journal Health Economics, found that a group of male retirees who retired at age 55 were 2.6 per cent less likely to die within the next five years than those who didn’t retire early. The study, authored by economists Hans Bloemen, Stefan Hochguertel and Jochem Zweerink, is reviewed in this New York Timesarticle.
Why is retirement seen as good for health?
The Dutch study found that those who were retired had fewer signs of digestive and cardiac trouble – less stress, less “road” eating, and less sitting in traffic.
The Times article also cites US research that concluded retirement is, for health purposes, like finding out you are 20 per cent less likely to develop a serious illness, such as diabetes or a heart condition.
A similar study in Australia found that “retirement was associated significantly with reduced odds of smoking, physical inactivity, excessive sitting and at-risk sleep patterns.” You can have a look at the Australian study, called Retirement: A Transition to a Healthier Lifestyle.
A lot of times we are sort of trapped in our thinking on the topic of retirement. We wonder (and worry) how we will manage to live on less money than we made at work. But the research points to a nice new way to frame our thinking. Retirement may be the time of life when we can really focus on our health and well-being. We’ll be liberated from the stress and strain of the workplace, and able to take the time to look after ourselves.
So as you plan your retirement, SPP can help you with the financial side. What you make of the other side – the opportunity to look after yourself – is up to you.
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
“One particular lesson that has really hit home for me since I early retired is this: FIRE doesn’t change your core personality. You see I had this lovely fantasy in my head that I would be more active and perhaps start exercising regularly when I left work. I would run or do yoga like every other day. Of course, I’ve never made working out a priority earlier in life so this really hasn’t changed that much since I retired.”
That must be why over 12 years since I left my corporate job and a year into semi-retirement my closets could still use a good cleaning and I struggle to make it to the gym three times a week.
That also may explain Why being rich makes people anxious. Kerry Hannon from the New York Times reports in The Toronto Star that multi-millionaire Thomas Gallagher who is retired from his position as vice chairman of Canadian Imperial Bank of Commerce World Markets says, “Emotionally, I don’t come from money; I got very lucky on Wall Street. I have more money than I had ever imagined, but I still worry — do I have enough, if I live longer than I thought?”
And financial anxiety among Canadians is not only surprisingly pervasive and but not limited to the very rich or the very poor. Rob Carrick in the Globe and Mail discusses a survey by Seymour Management Consulting which reveals that One in two Canadians is a bundle of nerves about money. Low-income people are most stressed, but one in three people with incomes of $100,000 or more are on the list of worriers.
So How do you know when it is the right time to retire? Retire Happy’s Jim Yih says retirement readiness is not tangible. He notes that one of the most significant trends is that more and more people want to work in retirement, plan to work in retirement and/or are being pulled into work in retirement.
“There are more opportunities than ever to work in retirement. In fact the new terminology that is not so new anymore is the idea of planning a PHASED RETIREMENT or a TRANSITIONAL RETIREMENT. Personally, I think it’s great and I think a lot of people are finding success with this idea,” he comments.
Retired actuary Anna Rappaport identifies the same trend in an opinion piece Moving To The Next Step: Reboot, Rewire, Or Retire? for Forbes. She suggests that while many people may seek to continue working at traditional jobs into their 70s or 80s, others may wish to leave their career positions to build new career paths. People who held senior roles during their careers often find rewarding a period of professional activity with less responsibility, before totally leaving the labor force. Some seek memberships on corporate and/or nonprofit boards. Other people seek volunteer or not-for-profit roles, working in areas that are meaningful to them.
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.
This week we have a pot pourri of stories from some of our favourite bloggers who have continued to write compelling copy through the now waning, long hot days of summer.
Are you a techno-phobe or an early adopter? Alan Whitton aka Bigcajunman writes about how old financial technology habits die hard on the Canadian Personal Finance Blog. Despite some lingering security paranoia, he now deposits cheques by photographing them with his cell phone.
One of the primary changes personal finance advisors suggest that clients make to save money is to put away their credit cards and start spending cash. On Money We Have, Barry Choi explores what happens if you decide to use cash and debit more. He says that depending on your personal situation, this may affect your credit score, you will forgo travel reward points and you also can lose out on other standard benefits like travel insurance and auto insurance covering car rentals.
Mark Seed on My Own Advisor answers a reader’s question, How would you manage a $1 million portfolio? His bias is to own stocks indirectly via passively managed Exchange Traded Funds for the foreseeable future to get exposure to U.S. and international equity markets. However, he says his selection of investments will likely differ after age 65 and in future he might hire a fee-only financial advisor or use a robo-advisor to manage his portfolio.
I recently helped my son find an apartment in Toronto so I thought Kendra Mangione’s article From a house to a bedroom: What $1,000 a month can rent across Canada was particularly interesting. She says you will pay $950 for a single bedroom with an ensuite bathroom in a Vancouver suburb but $950 will get you a two-bedroom, 864 sq. ft. townhouse close to downtown Regina and the university.
And whether you have children who are new graduates or you are only beginning to help pay for your kids’ post-secondary education, check out Parents Deserve a College Graduation Present, Too in the New York Times. This piece explores a Korean-American tradition for former students to give parents sometimes lavish gifts, once they have their diplomas in hand.
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.
Selecting a career is one of the most important challenges all of us have to deal with, and it doesn’t only happen once when we graduate from high school. I went to law school and embarked on an initial career as a family lawyer. However, nine years later I moved into pension and benefits law, and as a retiree I have a new career as a journalist. My husband has degrees in electrical, biomedical and software engineering, but spent most of his career in software design.
That’s why I think Bridget Eastgaard’s blog The future you are saving for does not exist on Money After Graduation is a “must read” for you and your kids. She says, “One of the most dangerous things you can do for your finances (and your happiness) is to plan your life under the assumption that everything will remain as it is. It won’t. I think we intuitively understand this, but you don’t know what you don’t know, and that makes imagining anything different extremely challenging. But these perspectives and biases can hinder us by limiting our flexibility to adapt to an ever-changing world. ”
So if you or your child are picking college or university courses or even if you are graduating from high school or with an undergraduate degree, how do you know what skills are in demand now and will still be highly sought four or more years from now?
The truth is none of us has a crystal ball. But you can check out Canada’s Best Jobs 2016: The Top 100 for a start. I’ll bet you’d never guess that the top three jobs on the list are: mining or forestry manager; urban planner and pharmacist. And construction managers, police officers and nurse practitioners are also highly ranked.
Heidi Grant Halvorson in the Harvard Business Review writes that The key to choosing the right career is to find a career that fits well with both your skills and values. She characterizes people in two ways. Those who primarily see work and life goals as opportunities for advancement, achievement and rewards have “a promotion focus.” The rest of us are mainly prevention-focused. We see our objectives as avoiding danger, fulfilling responsibility and being someone people can count on. Halverson believes that understanding our dominant focus can help with career selection.
In How to choose a career that you’ll love, New York Times bestselling author and founder of iwillteachyoutoberich.com, Ramit Sethi says, “The smart approach is to explore ALL the careers you’re interested in, test each to see if you’d really enjoy doing them, and move on to other jobs if they’re not a good fit. It’s kind of like window shopping at a mall. A shirt or pair of jeans may catch your attention. You might even try them on, but you wouldn’t just pick any random thing off the rack and say ‘I guess I’ll wear this for the next 10 years,’” he says.
Getting the chance to try different careers and work environments on for size is one reason why co-op co-op programs including one or more paid work terms are so valuable. An interesting blog on myuniversitymoney.com explores the pros and cons of co-op programs. Author Mr. Harvey is a former co-op student and he says the job hunt seemed to be an endless cycle of applying and interviewing for jobs which was a lot of work and stress on top of his studies. However he agrees that co-op students get lots of experience and many students are offered permanent jobs.
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.
Today we are continuing with the 2014 savewithspp.com series of podcast interviews with personal finance bloggers. I’m talking to Cait Flanders, who blogs at Blondeonabudget.ca.
In 2011, Cait had $28,000 worth of debt. To stay accountable throughout her debt repayment journey, she decided to start this blog. She paid off the last dollar just under two years later and today she’s going to tell us how she did it.
Cait lives in the Vancouver area, works full time from home as the managing editor of Ratehub.ca and is a contributor to Gale Vaz-Oxlade’s blog, The Globe & Mail, The Huffington Post Canada and Tangerine Bank’s blog.
Hi Cait, and thanks for joining me today.
Oh, thank you so much for having me.
Q: Cait, before you started this blog you had $28,000 in debt. How did that happen? Was it as a result of accumulated student loans?
A: No, I actually never had a lot of student loan debt. To be perfectly honest a lot of it was consumer debt. For years and years I was just swiping my credit card for anything that I wanted to do or see.
Q: You paid off your debt in just under two years, how did you manage that?
A: I literally had $100 in my bank account and it had to last me for six weeks. So I moved home for six months and from that moment forward just lived what I jokingly called “a very boring life,” saying “no” to everything. The only fun thing I let myself do was go for coffee with a friend which was $4 or $5 instead of $50.
Q: So, you wrote about your journey to solvency on your blog and you still post your monthly budget and goals. How have your family and friends reacted to this high level of disclosure about your financial affairs?
A: That’s actually a really good question. I grew up in a house where my family talked about money very openly, probably every day, so I think my parents love it in the sense that, it’s cool to see that I’m continuing that now and just taking those conversations online.
No one has ever said anything about me posting the numbers but I’ve recently made the decision that I’m going to stop posting them because I’m finally starting to realize that it could actually be pretty dangerous. It could lead to issues like identity fraud or theft. So I’m going to do budgeting a little bit differently going forward.
Q: Since you’ve paid off this significant debt, how has your life changed?
A: I’d say the biggest change is I’m no longer stressed all the time. Not having debt gives me much more freedom. I probably let my lifestyle get inflated a little bit since then because when I was paying off my debt I was sometimes putting up to 50-55% of my monthly income toward debt repayment. That’s not a sustainable budget. After two years of realizing that I don’t need all kinds of fancy things or outings to make me happy, life changes.
Q: In addition to blogs about reducing your personal debt, what other subjects do you write about?
A: On my own blog I’ve written about everything from moving, living in other cities, some travels, and sobriety. I write for the education section of the Globe and Mail about every eight weeks and more recently I’ve been talking about minimalism on my blog.
Q: How many hits do you get on your blog each month?
A: Right now I’m probably averaging between 80,000 and 110,000 page views a month.
Q: Wow. That’s incredible.
A: Yeah. It’s crazy. Fifty per cent of that is usually from Canada and maybe 35 per cent is from the U.S. The rest is divided between the UK, Australia and I even have readers in South East Asia which I think is really cool.
Q: So what have you done to promote your blog? Why do you think your readership is so high?
A: Personally, nothing that I can think of. I love talking to people on Twitter. I reply to every single comment that goes up on my site. There has also been press along the way like stories that The Globe or The Toronto Star have picked up. That obviously brings in more people. But no, I haven’t personally done anything.
Q: How long have you been writing the blog?
A: Technically, in October, it would be 4 years.
Q: What have some of the spin offs been?
A: Everything has changed in my career. When I first started the blog, I found a New York personal finance site for women looking for an editorial intern, I asked if someone from Canada could apply and they said that they’d love to have me. That taught me everything I needed to know about being an editor of a website.
Then my current boss Alyssa, at Ratehub.ca who is a blonde on a budget reader offered me a job in Toronto with the company. There have also been other freelance jobs and my relationship with Gale Vaz-Oxlade. She’s just the most incredible mentor and I write for her site. But her friendship, has been one of the greatest and most unbelievable spin offs from my blog and other writing.
Q: Do you actually have to go to an office for Ratehub.ca or do you work from home?
A: Originally I moved to Toronto for 8 or 9 months, just to really get to know the team and build up my position in the company. Then I moved back to Vancouver where I work from home.
Q: In early July you announced you’re embarking on a one-year shopping ban. Why?
A: There are a few reasons. One day I had this epiphany. Even though I’ve always felt like I was a minimalist, I had this moment where I was trying to open my can opener drawer and I couldn’t find anything in there. I just had this freak out that I actually have way more stuff than I probably need.
Then I started thinking that I wasn’t getting anywhere with my current savings and financial goals I realized that that was because I was spending a lot of money on things that probably didn’t really matter. Although I’ve been really good with my money for the last few years I do think that there is always room for improvement.
I think the ban is going to be difficult at times but I just want to challenge myself and learn and grow from that exercise.
Q: So tell me what the rules are of the shopping ban. Obviously you have to pay your rent and buy food and go out occasionally.
A: I have to pay the bills and get groceries. I’m keeping my car so I have to get gas and pay insurance, and I’m giving myself a small recreation budget. It’s no clothes, no shoes, no electronics – things that not all girls buy but some do. I was always bad for picking up nail polish. I don’t need any more decor items in my home. It’s just that kind of stuff.
Q: So, if the one year ban is successful, what comes next? Are you thinking about a book or is there a major purchase you’re saving up for?
A: I think a book is something that all writers want to accomplish in their career but that has absolutely nothing to do with the ban. I haven’t really announced this but when it’s over my goal is that I’ll have money saved so I can take an extended trip to the UK.
Q: If you had one piece of advice for someone who is deeply in debt and wants to turn things around, what would it be?
A: I don’t think everyone needs to put 55% of their income toward debt repayment like I did, but I think just facing up to the numbers is key and then making a plan so debt repayment is a priority.
Q: Thank you very much for talking with me today, Cait.
A: Oh, thank you so much for having me.
This is an edited transcript you can listen to by clicking on the link above. You can find the blog Blonde on a Budget here
The 4-hour work week was originally published in 2007 and an expanded and updated edition was released in 2009. But I just heard about this #1 New York Times bestseller recently and became curious enough about the author’s philosophy to order a review copy.
Ferriss coins the term “New Rich (NR)” which means people who abandon the “deferred life” plan and create luxury lifestyles in the present, using time and mobility – the currency of the NR. He also says his journey from a grossly overworked and severely underpaid worker to a member of the NR is at once stranger than fiction and simple to duplicate.
His methodology is structured as a 4-step DEAL:
Step 1: D is for definition
To join the NR movement Ferriss says you need to learn a new lexicon and challenge the status quo. For example:
Negotiate a remote work schedule based on productivity that allows you to achieve 90% of the results in 10% of the time, thus freeing up time for sports and family travel.
As a business owner, eliminate the least profitable clients and projects, outsource as many functions as possible and travel the world while working remotely.
Set up a website business to sell a product with virtually no overhead that takes about two hours a week of your time to maintain.
These arrangements seem far-fetched for the average individual, particularly if you work in a lab, construction site or on a farm where you have to be physically present to do your job. Nevertheless there are lots of interesting anecdotes and examples of how many people have successfully applied these principles.
Step 2: E is for elimination
Ferris advocates getting rid of needless busy work to become more effective and more efficient. Adapting the Pareto 60/20 proposition, he says look at your job and your life through the lens of two questions:
What 20% of your sources are causing 80% of your problems and unhappiness?
What 20% of your sources are resulting in 80% of your desired outcomes and happiness?
For example, he advises freeing up time by “cultivating selective ignorance,” i.e. don’t watch the news and eliminate reading newspapers. I must confess he lost me on this one because I’m a journalist and a news junkie.
But I do buy into his chapter on avoiding interruptions and the art of refusal. Since I’ve retired from the corporate world I’ve managed to almost totally eliminate useless meetings. And checking email only twice a day coupled with a suitable email auto response to “train” your co-workers and clients seems like a laudable (if unattainable in my case) objective.
Step 3: A is for automation
This fascinating (but politically sensitive) chapter explains how not only large companies can outsource and offshore business processes and mundane personal tasks. AJ Jacobs, an editor-at-large at Esquire magazine explains how he outsourced many necessary but non-productive tasks.
He hired the company Brickwork in Bangalore, India that offers “remote executive assistants” to research articles. He also retained Your Man in India to pay his bills, make vacation reservations, renegotiate his cell phone plan and make online purchases.
I’m not sure I can justify the cost of outsourcing as many tasks as Jacobs does but every month when I have to enter data and balance my company bank account, the concept is really tempting.
However, I do outsource transcribing digital interviews by uploading them to the website transcribeteam.com. Less than 24 hours later the transcripts appear in my mailbox at a charge of U.S. $1/minute.
Step 4: L is for Liberation
Once you have eliminated needless busy work and automated or outsourced as many of your job functions as possible, this chapter explains how you can negotiate a remote working arrangement that will allow you to travel and work from anywhere in the world.
Again, the primary premise is that your current job (or any future business) truly doesn’t require you to be physically on the job. Ferriss says:
First of all, ensure you are a valued employee by performing well and taking advantage of as much in-house training as possible.
Next, call in sick for a couple of days but work from home to show how productive you can be.
Finally, make the business case for working at home at least a few days a week.
Then he says you can propose a revocable trial period and eventually ask to increase your remote working arrangement to the full week.
Will this work? Maybe in some cases, but face-to-face interactions with team members can create valuable synergy. And many employees don’t want to be away from the action and opportunities for promotion.
According to Ferriss, the top 13 mistakes the NR make are:
Losing sight of dreams and falling into work for work’s sake.
Micromanaging and emailing to fill time.
Handling problems outsourcers or co-workers can handle.
Helping outsourcers with the same problem more than once or with non-crisis problems.
Chasing more customers, particularly poor prospects when you already have a good customer base.
Not having a dedicated work space for sleeping, living or relaxing.
Answering email that won’t enhance their business and can be handled by an auto-reply message.
Not performing an 80/20 analysis every two to four weeks for their business and personal life.
Striving for perfection rather than great or good enough.
Blowing minutia and small problems out of proportion as an excuse to work
Making issues that are not time sensitive urgent to justify work.
Viewing one product, job or project as the be-all or end all of their existence.
Ignoring the social rewards of life.
It’s easy to dismiss this book as a fantasy because most of us don’t have the vision, or the nerve or the self-discipline to try and apply the principles Ferris espouses. We can only dream of crafting an entrepreneurial lifestyle working four hours a week where big cheques still routinely appear in our bank accounts.
But there are lots of interesting anecdotes and great ideas in this book that anyone can put to good use. I plan to read it again carefully on my own time and make a “To Do” list of strategies I can implement.
My goal? Work less and earn more until I am really ready for full retirement!
You can buy both used and new copies of The Four Hour Work Week on Amazon. The hard cover edition is $16.89.