March 20, 2023

Expensive housing costs has a growing number of adult kids living with their folks

The current high rate of inflation is driving up borrowing costs, making today’s costly houses even more out of reach for first-time homebuyers.

And that’s leading to a growing number of young people having to live at home with the folks, even into their 30s, reports The Daily Hive.

Writer Sarah Anderson notes that “close to a million households in 2021 were `composed of multiple generations of a family.” That represents seven per cent of Canada’s total population, the article reports.

A significant number of young people live with their parents, the article continues.

Citing Statistics Canada information, the article notes that “the share of young adults aged 20 to 34 living in the same household with at least one of their parents was unchanged from 2016 to 2021,” and is 35 per cent.

What’s different is that the “kids” living at home are getting older, the article reports. “Forty six per cent of young adults who lived with their parents (in 2021) were aged 25 to 34, compared to 38 per cent in 2001,” The Daily Hive reports.

The article lists six programs the feds are offering to try and make it easier for younger folks to get into the housing market, including a new tax-free savings account for prospective home buyers.

The article also mentions a new program that provides up to $7,500 in tax credits for those making their homes “multi-generational,” but makes it clear that this is most likely designed for younger homeowners who want to create a living space for their parents in their home, rather than the other way around.

Daniel Foch of the Canadian Investor Podcast is quoted at the end of the article as saying more needs to be done to get young people into their own homes.

“Canada could ultimately be heading for a low-ownership housing model as more people are marginalized out of ownership. This really signals that we’re starting to see the end of the Canadian dream of homeownership unless something changes,” he tells The Daily Hive.

Saving up for a down payment is a big priority for many young people. But putting aside a little money for retirement as well is never a bad idea. In these days of higher inflation, where groceries and gas seem to cost a small fortune, it may be a little tougher to find those dollars to save. But you can always start small.

The Saskatchewan Pension Plan, open to any Canadian with registered retirement savings plan room, lets you make tax-deductible contributions at any level you choose (up to $7,200 annually), either by setting up SPP as a bill for online banking or by using a credit card. If money’s tight, keep contributions small — you can always ramp them up later! Check out SPP today!

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Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

Why everyone is using watches, apps to count steps

March 16, 2023

We had just finished off a one-hour line dancing class the other day when a friend excitedly pointed out that her watch had counted X thousand steps for the hour.

Golf buddies of ours also seem to have embraced this new trend — their watches not only count strokes, distances, calculate golf handicaps and so on, but now, count steps. So it’s Y thousand steps per round of golf.

Save with SPP, as a known technical luddite, decided to take a closer look at why everyone seems to be into this new trend.

According to the Health Prep blog, step counters “have become increasingly popular over the past decade,” and are “great tools for increasing your overall fitness level and encouraging healthy habits.” The counters are typically either built into your smart watch, or are devices you wear on your wrist or attach to your belt, but they all do the same thing — “they measure the movement of the individual’s body to calculate the number of steps they have taken,” the article explain.

Some of the smart watches also measure “heart rate, calories burned and sleep patterns,” the article notes, adding that the devices can lead one into more exercise and ideally, fitness and weight lost.

Okay, so it counts your steps — how many should you be shooting for?

An article on the Mayo Clinic website says the average American walks 3,000 to 4,000 steps a day, but that a popular step counter target is 10,000 a day.

But, the article advises, rather than shooting for that target right out of the box, you should first get a handle on what your average “step day” looks like. “It’s a good idea to find out how many steps a day you walk now, as your own baseline. Then you can work up toward the goal of 10,000 steps by aiming to add 1,000 extra steps a day every two weeks,” the article notes.

This makes great sense. How can you “improve” your walking if you don’t know how much you were doing before you got the watch?

The article says that increased walking has many health benefits, including reducing the risk for heart disease, obesity, diabetes, high blood pressure and depression.

An article on the Live Science blog explores the benefits a little further. It’s good for the average person because the step counting data received is “intuitive and understandable to the layperson… easy to measure, objective, motivational and help(s) to facilitate behaviour change.”

U.S. guidelines suggest that 150 to 300 minutes a week of “moderate intensity exercise,” like walking, is the recommended level for adults. If the activity is “vigorous intensity,” (perhaps running, say) the recommended adult level is 75 to 150 minute a week, the article says.

An article on the Inverse blog expands on the idea of knowing what your baseline daily step count is before shooting for the magic 10,000 figure.

The article contends that 10,000 steps is not a scientific target, but the result of a marketing campaign for an early Japanese step counter.

“The gadget was named Manpo-kei because, in Japanese, it translates to “10,000 steps meter,” the article notes. “But the idea of 10,000 steps as an `ideal’ wasn’t exactly based in science. Rather, the Japanese character for “10,000” resembles a person walking — so it’s commonly thought, though hard to prove definitively, that the seeming similarity is the humble origin story of a now much-vaunted fitness target,” the article adds.

The article reiterates what we’ve seen elsewhere, that the typical person only walks 2,700 to 4,400 steps a day, so rather than trying to double or triple their typical day’s walking, they should increase it incrementally.

Save with SPP walked for exercise while working in downtown Toronto. At our least fit level, we could walk perhaps four blocks in an hour. We gradually increased our distance (speed) and by the end of our time there could walk maybe 10 blocks in the same period of time. Start with what you can handle, and gradually increase your goal.

It’s a similar story with retirement saving. Start by putting away an amount you can afford — we started with $25 a month in the mid-1980s. As you earn more, ratchet it up, and by paying yourself first, you won’t even notice that you are putting away hundreds, and eventually thousands, away. A great destination for those hard-earned savings is the Saskatchewan Pension Plan. Check them out today!

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Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


March 13, 2023

South of the border, near-retirees fear changes to government benefits

Our friends south of the border — those of them who are nearing retirement — are worried that their government-backed Social Security system might not be there for them when they need it.

That was one of the findings of the Allspring Global Investments Annual Retirement Survey; a media release from Allspring walks us through the survey results.

The survey found that retirees with guaranteed sources of income — such as their Social Security, a pension plan, bank account or annuity — have a “more positive outlook on retirement” than those with savings vehicles without guarantees, such as investment accounts, tax-free savings accounts (IRAs) or capital accumulation-style retirement savings accounts. Those who have not yet retired, the media release notes, worry about the solvency of the Social Security system.

Another finding that may resonate with Canadians as well was the idea that American retirees are concerned about “drawing down retirement (funds) tax-efficiently.” More than half of those surveyed hired an advisor to help with tricky taxation related to receiving Social Security and Medicare, and 71 per cent say they want to learn more about taxation.

One of the most eye-opening findings was that “you either reach your savings target, or you don’t.”

“The survey found that a retirement savings plan can help keep workers on track, but it represents several assumptions,” Allspring’s media release states. “Retirement expenses vary widely, while many retirees participate in part-time work and others stop working earlier than expected. Many will adjust their spending—by force or by choice.”

In plainer terms, your retirement spending must align with your new (and usually lesser) retirement income. You can’t sustain a system where you spend more than you take in.

The Allspring research draws a rather surprising conclusion from this, noting that “each year of early retirement before 65 significantly increases the chance of running out of money in retirement,” but also that “even working 10 hours a week after 65 significantly decreases the risk of running out of money in retirement.”

Among the conclusions of the research was that “women, African Americans and Hispanics” are experiencing a wealth gap. “The financial services industry needs to do better in serving these groups,” the media release notes, adding that only 69 per cent of women (versus 87 per cent of men) are “confident their savings will last.” As well, the release states, African Americans generally were more impacted by the pandemic and now expect their retirement will be delayed by two years.

The article makes the point that those with guaranteed income have a more positive outlook. Here in Canada, the chief retirement benefits (Canada Pension Plan and Old Age Security) are lifetime benefits. But if the rest of your income is being drawn down from a registered retirement income fund (RRIF), or you are living off savings, the risk of running out of money is certainly possible.

A solution available to members of the Saskatchewan Pension Plan is the annuity. SPP offers several different types, but all of them will result in a monthly payment that you’ll receive on the first of every month for life. It’s an option worth considering for some or all of your SPP savings when you reach the “time to collect” stage. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

Making tiny, “atomic” changes can help build good habits: James Clear

March 9, 2023

We often hear about the benefits of breaking big projects into more achievable, tiny steps.

In his book Atomic Habits, James Clear applies that same sort of thinking to the age-old challenge of changing our bad habits for good ones.

“Too often,” he writes, “we convince ourselves that massive success requires massive action. Whether it is losing weight, building a business, writing a book, winning a championship or achieving any other goal, we put pressure on ourselves to make some earth-shattering improvement that everyone will talk about.”

Instead, he writes, we should focus on making small improvements. “Improving by one per cent isn’t particularly notable — sometimes it isn’t even noticeable — but it can be far more meaningful, especially in the long run,” he notes. “The difference a tiny improvement can make over time is astounding.”

But, he says, you have to stick with your one per cent change plan. “In order to make a meaningful difference, habits need to persist long enough to break through” what he calls the Plateau of Latent Potential. Then, the hard work you’ve put in will begin to be noticed by others as an overnight success, he adds.

He also says our focus should be less on goals, but on the system we need to reach them. A good way to do this is to change our thinking. “The goal is not to read a book, the goal is to become a reader,” or a musician, or a runner, Clear notes. “The most effective way to change your habits is to focus not on what you want to achieve, but on who you wish to become,” he explains.

He breaks down what he calls “the habit loop” by noting that every habit consists of a cue, a craving, a response, and a reward. An example would be walking into a dark room and flipping of the light switch, he explains. We aren’t even aware of such habits, and becoming aware is key to changing them, he notes.

The book shows how to develop a Habits Scorecard — an outline of all the things you do each day, your habitual behaviour. Rate all your habits as good, bad, or neutral, and you will have “begun to notice what is going on” with them, he suggests.

To develop a good habit, Clear explains, you need to make it obvious, attractive, easy and satisfying. To lose a bad habit, make it invisible, unattractive, difficult and unsatisfying.

A later chapter talks about “stacking” good habits — “when I see a set of stairs, I will take them instead of using the elevator,” or “when I serve myself a meal, I will always put veggies on my plate first.” Making a habit more obvious can be achieved by placing your guitar in the middle of the living room if you want to play more often, or keeping a stack of stationery on your desk so you remember to send more thank-yous, the book notes.

On the bad habit side, “if you’re watching too much TV, move the TV out of the bedroom,” or to cut back on video games, “unplug the console and put it in a closet after use.”

Reframing hard-to-do habits helps you want to do them more, Clear writes.

“Many people associate exercise with being a challenging task that drains energy and wears you down. You can just as easily view it as a way to develop skills and build you up. Instead of telling yourself `I need to go run in the morning,’ say `it’s time to build endurance and get fast.’”

Later chapters show how to shape your habits in easier stages, taking five specific phases if you want to become an early riser, or a vegan, or to start exercising.

This entertaining book concludes with a recap of the principles for changing habits or setting new goals — “the secret to getting results that last is to never stop making improvements. It’s remarkable what you can build if you just don’t stop…. Small habits don’t add up. They compound. That’s the power of atomic habits. Tiny changes. Remarkable results.”

This is a great read, very inspiring, and highly recommended.

If you haven’t started saving for retirement, starting with a small first step may be a good way to get rolling. The Saskatchewan Pension Plan is open to any Canadian with registered retirement savings plan room, and you can contribute any amount you want up to $7,200 per year. So you could start small, say $25 a month, and then ramp it up over time. This automatic approach will make retirement saving an easy habit to adopt. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


March 6, 2023

Tips and tricks for retirement savers facing scary markets, inflation

Writing for Yahoo! Finance, Ella Vincent notes that these times of up-and-down markets and rising inflation are worrisome for savers.

She offers a variety of tips and tricks, some of which we have “Canadianized” as she is aiming her advice at a U.S. audience.

First, she writes savers nearing retirement should be thinking more about risk than they do about chasing growth.

Ken Moraif of Retirement Planners of America tells Yahoo! Finance that “risk control is incredibly important in our view. We have a philosophy that says you should only take as much risk as is necessary to accomplish your financial goals. Risk control is the number one thing to determine how much risk is appropriate for you and proceed accordingly.”

Diversify your portfolio so you aren’t “all in” on any one investment category, the article advises.

Moraif tells Yahoo! Finance that you should also review your investment philosophy. A “buy and hold” strategy, where workers “buy and hold stocks until they retire,” may not be effective as you move into retirement, where the goal is preserving capital versus growing it.

Buy and holders need to develop a “sell” strategy, Moraif states in the article. Reducing equities is sometimes away to cushion yourself from stock downturns while conserving your principal, he explains.

Next, consider tapping into your retirement account later. Here in Canada, that could mean continuing to work until you are 70 before starting your Canada Pension Plan benefits, with the idea being you’ll receive a greater monthly benefit the later you start.

If you didn’t start saving for retirement while you were young, you can try to catch up in your 1950s by maximizing your contributions to retirement savings programs. Here north of the 49th that means things like filling up registered retirement savings plan room with an eye on maxing out. A Tax Free-Savings Account (TFSA) is also handy in retirement, so if you haven’t got one rolling by your 50s, you will have a lot of room there to use as well.

If you’re in a retirement program at work, be sure you are contributing to the max, the article adds.

Let’s sum this up. Don’t place your bets on one horse when it comes to financial markets; diversify to avoid risk. Your investment philosophy should be more about conserving capital than trying to grow it. Consider starting retirement benefits later so you get more — that usually means working longer too.

Don’t panic if you weren’t a saver in your 20s and 30s — there is still time in your 50s to try and max out your retirement savings vehicles like RRSPs and TFSAs. Be sure to join any retirement savings program through your work and contribute as much as you possibly can.

It’s a lot to take in.

There’s another way to go that’s open to any Canadian with RRSP room, and that’s the Saskatchewan Pension Plan. It’s a voluntary defined benefit pension plan where how much is contributed is defined by you, the member. You can chip in up to $7,200 a year, and can consolidate any other bits and pieces of retirement savings by transferring up to $10,000 a year in from other RRSPs. SPP will grow your savings and at retirement, you have the option of a lifetime annuity — a supply of monthly payments that never runs out! Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

A look Down Under, where the workplace retirement system is an all-DC “super”

March 2, 2023

While here in Canada it’s up to employers to decide whether or not to offer a retirement program, Australian employees are covered by an all-defined contribution (DC), all employer-funded system of superannuation funds, or “supers.”

This Australian superannuation system now has more than $3 trillion (Australian) in retirement assets under management,

Save with SPP reached out to the Association of Superannuation Funds of Australia (ASFA) by email, and ASFA’s CEO, Dr. Martin Fahy, was kind enough to provide answers to our questions on how retirement savings are handled down under.

Q. Does the Australian superannuation system involve mandatory pension plans for all workers, with contributions made exclusively by the employer? And without any contributions from either the government or (required) contributions from individuals? (we are imagining that employees might be allowed to top up the contribution to their supers).

A. Yes, the Australian superannuation system requires employers to make mandatory contributions (known as Superannuation Guarantee contributions) to their employee’s superannuation. Currently, 10.5 per cent of wages are paid by the employer to superannuation. Individuals can make additional contributions (both before and after tax) within limits/caps prescribed by government.

Not all workers are covered by the system. For example, self-employed individuals and some contractors (dependant on the nature of the work arrangement) do not receive Superannuation Guarantee contributions.

Q. Thinking of things like the pooling of investments and the lower management fees large funds can charge, what are the chief advantages of the DC model? Can people move from job to job without transferring their supers or are transfers simple to make?

A. Individuals can choose to keep their super in the same fund when they move roles – it is not tied to their employer.

Access to professional investment management at wholesale rates, and the ability to participate in investment opportunities that would otherwise be unavailable to individuals, is one of the chief advantages that a scaleable DC model provides. Australia’s DC system is characterized by strong governance, regulation and prudential oversight. Retirement outcomes are dependent on the level of contributions (which are mandatory and the rate of which is increasing) and investment performance over time (with funds required to meet annual performance benchmarks to continue operating). Workers are not exposed to more extreme problems that have arisen in some defined benefit (DB) systems, such as reductions (or in the worst cases eradication) of workers’ entitlements due to failures in assets/liability matching or fiscal tightening.

Recent changes to the Australian system “staple” a worker to their superannuation fund, so that they maintain a single fund unless they choose otherwise (either to switch to a new fund or maintain multiple funds). This alongside other reforms and higher levels of consumer awareness has reduced account proliferation and the incidence of unintended multiple accounts being held by individuals. This will lead to reductions in fees paid by individuals and improve long-term retirement outcomes.

Q. This system appears to have succeeded on many fronts, but the percentages of Australians with pension coverage must be close to 100 per cent. If this is true (probably the best coverage in the world), what are the other great things about the Australian super model?

The Australian retirement income system is a “three pillar” system:

  • Pillar 1 Government funded Age Pension
  • Pillar 2 Compulsory superannuation
  • Pillar 3 Voluntary savings (both inside and outside of superannuation)

As the superannuation system matures (that is, as more individuals have had the benefit of superannuation at higher contribution rates for their entire working life) the role of compulsory superannuation in providing retirement income is becoming primary. Most retired Australians today still receive some form of means tested government-funded Age Pension (a safety net payment set around the poverty line), however this is increasingly a part-pension due to higher levels of superannuation savings. One of the most remarkable (current and projected) achievements of the Australian superannuation system is its role in maintaining Age Pension payments around 2.5% of GDP over coming decades, well below what is being spent by international counterparts.

Q. Here in Canada, funds in a registered DC plan must, by the time the plan member is 71, either be converted to a life annuity or transferred to what is called a registered retirement income fund, a fund that mandates annual withdrawals (minimums). Taxes are deferred until the withdrawal stage. How does Australia handle decumulations? Are there rules similar to that?

A. There is no compulsion to convert to an annuity or allocated pension. However, there are incentives in place within the system to encourage this (for example, a zero-tax rate on investment earnings in pension phase, vs a 15 per cent rate in accumulation phase). The previous government legislated a Retirement Income Covenant that requires superannuation fund trustees to consider their retirement phase offerings and make them appropriate for their members. Last year funds submitted their initial strategies to the prudential regulator on this front and are now in the process of updating products and services in line with this.

Once in pension phase there are minimum withdrawal requirements. This is one mechanism to ensure that accrued savings are utilised for their intended purpose – retirement income that enables individuals to live a comfortable retirement.

Our thanks to Dr. Fahy and ASFA for their time and help. Here’s a link for more information on Australia’s superannuation system.

If you don’t have an employer-sponsored retirement program, or want to augment what you have, the Saskatchewan Pension Plan may be a program worth investigating. As an open DC plan that is not sponsored by your employer, SPP shares some similarities with the Australian system — it’s a large, pooled fund, which keeps investment management costs down, and as in Australia, portability is built in when you change jobs — you won’t have to transfer your benefits from one employer-sponsored plan to another. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


February 27, 2023

High interest rates, falling real estate prices create a nation of savers

Remember the pandemic-era prediction that once things were “back to normal,” we’d all be madly spending through our stash of cash — built on years of being locked down with nothing to spend on?

Well, not so fast, reports the Sarnia Observer. We’re no longer facing COVID lockdowns and travel restrictions, perhaps, but the saving trend started a few years ago is continuing.

Canadians (particularly the top 40 per cent of earners) have now amassed $350 billion in savings as of the third quarter of 2022, compared to “$300 billion at the outset of the pandemic,” the Observer reports.

That’s a 28 per cent jump in the savings rate for the group, the newspaper adds.

And the trend towards saving is likely to continue, the Observer notes, because “consumer confidence has been shaken… (that) typically leads to more saving, not less.”

What’s got people gun shy, the newspaper explains, is the fact that “more than $1 trillion in assets were wiped out over the second and third quarters of last year as financial markets and housing retrenched.” Rising interest rates “pushed the average home price down by 12 per cent,” the Observer reports, and the S&P/TSX Composite Index was down by 8.7 per cent in 2022.

In plainer terms, both housing prices and stock markets took a bit of a haircut at around the same time.

Paradoxically, the newspaper adds, the top 40 per cent of earners now have more money — many are putting their dollars in safe, high-interest savings accounts and term deposits — but are feeling less wealthy, as the value of their real estate and financial holdings falls.

The news is not all bad, the Observer continues.

Even though savings increased, there was a bit of an uptick in discretionary spending when COVID restrictions wound down, the article notes. That led to the creation of 381,000 new jobs in 2022, and wages are up by about 5.1 per cent, the Observer reports. The article concludes by warning of a continued decline in spending growth if cash keeps getting hoarded.

It’s not surprising to see a return to Canada being a “nation of savers,” as it once was years ago when interest rates were even higher than they are now. Let’s not forget that after double-digit inflation and mortgage rates at the end of the ‘80s and into the ‘90s, we had decades of very low interest rates. Low rates are bad for savers, and great for borrowers. Now the teeter-totter has tipped the other way.

If you’re in saving mode, don’t forget about the need to put aside some cash today for your future self to spend in retirement. If you don’t have a retirement program at work, and are worried about retirement investing, the Saskatchewan Pension Plan (SPP) may offer the solution. SPP invests your contribution, at a very low cost, in a pooled fund managed by experts who are focused on the long-term. SPP will grow your savings into future retirement income — check them out today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

Living your values, learning, and social contacts are all keys to a happy retirement: Mike Drak

February 23, 2023

In Longevity Lifestyle by Design, author Mike Drak and a team of co-authors make the case that there’s much more to retirement than simply saving cash.

Few people, notes the preface, prepare for “the crucial part” of retirement — “how they’ll spend their days, how they’ll find meaning and purpose, how they’ll avoid feeling isolated or lonely, and whether they’ll either work part-time or volunteer, or do both.”

“If you think that by retiring all your problems will magically go away, I hate to tell you — they won’t,” writes Drak. He notes that there can be “a big difference between being retired and having a great life,” citing the example of star quarterback Tom Brady, who “unretired” after just 40 days.

He shows, via a graph, that there are three types of retirees — the “Financial Independence Retire Early (FIRE)” and comfort-oriented crowd at one extreme, and the “work till you drop” gang at the other end. Most of us are in the middle — navigating an “unfulfilled life of leisure” or “work(ing) to make ends meet.”

Unlike the super-motivated FIRE and “till you drop” groups the middle group may tend to be “unaware of what drives them, and unsure of what they want.”

The book then sets out to help those without clear goals, purposes or defined values to acquire them. We all have values, he writes, but are our daily actions in retirement aligned with them? Have you added retirement activities that “give your life meaning,” or that you “love to do,” or are a passion for you? If not, writes Drak, you may experience “retirement stress,” a life that is out of whack with what truly motivates you.

He cites research by Dan Buettner that found that “happiness/longevity = relationships, plus health + financial security + spirituality + positive attitude + purpose.”

In a section that links work to “the fountain of youth,” Drak writes that continuing to work — perhaps at something more aligned to your values and passions — should not be ruled out in retirement. Work, he writes, “keeps you young,” as well as mentally sharp. It gets you “off the couch and helps you interact with others, he adds. It also helps you avoid running out of money in retirement, he notes.

The last section of the book outlines some wise words from a variety of authors. Susan Williams writes that women need to boost their financial literacy about such things as retirement income. Citing CNN research she notes that “nearly 60 per cent of widows and divorcees wish they had been more involved in financial planning decisions” and “56 per cent discovered hidden debt, inadequate savings… or (investment choices) that affected their lifestyle and retirement savings goals.”

Drak concludes by noting that while retirement isn’t only about money, you do need “sufficient” money in retirement. People are living much longer, so don’t think of yourself as being “old” at 65, he continues. Have something good to do in retirement, work on improving relationships with spouse and family, and remember that “happy, positive, optimistic retirees are heathier and live longer.”

This is a well-written, fun-to-read and exceptionally helpful book. To paraphrase Aerosmith, retirement is a journey rather than a destination. Drak’s thoughtful work here will help you ensure that your future self doesn’t spend retirement on the couch, watching the news.

As the book suggests, while saving money is only one part of a long and happy retirement, it’s still an important one. If you don’t have any retirement savings program at work, or are self-employed, the Saskatchewan Pension Plan may be just what you’ve been looking for. SPP will invest your contributions in a pooled fund at a low management cost, and grow them into future retirement income. Check out how SPP can work for you.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


February 20, 2023

“Greyer” workforce retirements rise, creating skills gap: TD

If you think you’ve noticed more grey heads around the office of late, you’re not wrong — but things may be about to change.

According to a new report by TD Economics, cited in an article in Wealth Professional, while more older workers than usual are currently employed, their pending mass retirement “is a risk to the economy if it is not addressed.”

James Orlando of TD tells Wealth Professional that the problem is that “many Canadians who would have been eying retirement have chosen (or perhaps been forced) to work longer than expected. But older workers will not stay in the labour market en masse for ever.”

It’s a bit of a good news, bad news situation, the magazine reports. Older workers who have delayed retirement have “provided an important buffer for those businesses that would otherwise be struggling to fill skills gaps,” the article points out.

In fact, the article continues, this “greying effect” on the workforce, where workers aged 55 and over stay in their jobs, has been happening since 2020.

Had older workers been retiring at the same rate they did 20 years ago, Wealth Professional reports, there would be an eye-popping one million fewer older people in today’s workforce.

It’s felt, the article tells us, that “lower asset values and rising housing and energy costs” are reasons the older gang is still at their desks — concerns about inadequate “pension pots” is another, the article adds.

Now for the bad news.

Figures show a “17 per cent increase in the number of retirements in 2022 compared to the prior two years, with 266,000 people retiring through the end of last year,” the article reports.

This trend, the article continues, is expected to continue “and with a projected one million over-65s by 2025, this could mean 900,000 retiring based on current participation rates.”

Put another way, that’s a 50 per cent jump in the retirement rate.

Orlando tells Wealth Professional that “businesses cannot ignore the likelihood of losing both the headcount and the knowledge that is in those heads.” He states that there is a need to address the skills gap through greater training of young people and through finding room for people with “foreign credentials and experience.”

“The aging of Canada’s existing population is opening the door to make the structural changes necessary to bring in, integrate, and support all current and future Canadians. Therein lies a huge opportunity for Canada,” Orlando tells Wealth Professional.

We’ve seen similar stories that talk about mass retirements in certain key sectors, such as healthcare and in skilled trades. If there is a positive side to this story, it’s that a once-in-a-generation time of opportunity is presenting itself to younger workers willing to up their skill sets.

Changing jobs often means changes to your workplace pension and benefits. But a job change is no biggie if you’re a member of the Saskatchewan Pension Plan (SPP). Because your SPP isn’t tied to your employer but to you, you can continue contributing at your new job, even if it’s in a different province or territory. This level of portability makes SPP a pension benefit that travels well!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

Retirement investors need to think about balancing growth and income

February 16, 2023
Photo by on Unsplash

Saving for retirement sounds like building wealth, but there’s a twist. After the saving is done, you’ll be wanting to convert that piggy bank into income for your golden years.

Do you bet it all on black, or is there a more sensible approach to investing for retirement? Save with SPP scouted the Interweb for some thoughts on the principles behind retirement investing.

Forbes magazine suggests retirement investors should take advantage of “tax advantaged accounts” available to them. In Canada, this would be things like a registered retirement savings plan (RRSP) or tax free savings account (TFSA).

The article suggests an “asset allocation” approach makes sense for retirement investing, with a portion of your investments targeting growth, through exposure to equities (stocks), and the rest to income, via fixed income investments, such as bonds.

You can either buy stocks and bonds directly, or via exchange-traded funds (ETFs) or mutual funds, the article adds.

Forbes believes that your age should help dictate the portion of your holdings that is in equities versus that in fixed income. In your 20s, the article notes, you should invest “90 to 100 per cent” in equities. By your 50s, you should be around 65 per cent equities and 35 per cent bonds, and once over 70, “30 to 50 per cent in stocks, 40 to 60 per cent bonds,” with the rest in cash.

At The Motley Fool Canada, dividend stocks are seen as one of the best investments in a retirement portfolio.

“You pay lower income taxes on dividend income from dividend stocks than your job’s income, interest income, and foreign income. Therefore, it is one of the best incomes to build up and grow as soon as you can. This low-taxed income will benefit you through retirement,” writes The Motley Fool’s Kay Ng.

She also notes that even if you have paid off your mortgage when you retire, you are still going to need income “to pay for home insurance, property taxes, and potentially utilities, condo, or home repair fees during retirement.”

Her article suggests real estate income trusts (REITs) are an investment well suited for your retirement portfolio. Owning REITs, she explains, is like owning shares in a property that is being rented out — you’ll get regular monthly income (like rent) and the value of the properties held by the REIT tend to go up over the long term.

The folks at MoneySense note the RRSP, now more than six decades old, is still a “go-to” for Canadian retirement investors.

The article begins by noting that the RRSP allows investments to grow on a “tax deferred basis,” meaning no taxes are owed until you take the money out in retirement. The Saskatchewan Pension Plan (SPP) operates very similarly, for tax purposes.

MoneySense agrees with the idea that Canadian dividend stocks make sense in your retirement investment portfolio, as they are taxed at a lower rate than foreign stocks in a non-registered account and aren’t taxed in a registered account.

Since the end game of retirement investing is converting savings to income, MoneySense notes the annuity — “which pays a fixed income for life” — is a good idea for some or all of your savings once you have retired.

So, let’s recap. You want to build your retirement portfolio with a mixture of dividend-producing stocks, and interest-producing (and lower risk) fixed-income investments. Real estate income is seen as beneficial both before and after retirement. When retirement begins, these sources will provide regular income, and if you want to guarantee the level of income, you can convert some or all of your holdings to an annuity.

If you’re hesitant about wading into this somewhat complex topic, another way to go is to join the SPP. SPP’s Balanced Fund is invested in Canadian, U.S. and international equities, but also bonds, mortgages, real estate, infrastructure and money market funds. The savings of SPP members are invested, at a very low cost, in a large pooled fund. And when it’s time to collect your SPP benefit, you can choose from a variety of annuity options for some or all of your account. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.