Saving a dime from every dollar is still good advice: The Motley Fool

Our late Uncle Joe sat us down, years ago, to go over the retirement plans we had drawn up for the missus, his niece.

In that long conversation about retirement savings, avoiding debt, and living within one’s means, he told us his main strategy was to put away 10 cents of every dollar he earned. He was still doing this into his late 80s.

Is this a good strategy? The folks at The Motley Fool sure seem to think so.

“Estimating your retirement needs can be complicated, so it’s not surprising that people look for mental shortcuts to make it easier. One of these shortcuts says you should save 10 per cent of your annual income for retirement,” their article begins.

The article says that the average U.S. full-time worker earns about $62,000 US, or just under $90,000 Canadian.

“Saving 10 per cent would look like saving $6,200 annually, or about $517 per month. How much this is worth by your retirement depends on how long you save and your average annual rate of return,” the article explains.

If you were to save that $517 each month at a six per cent interest rate, the article suggests, you’d have $34,973 after five years, $81,774 after 10, $340,379 after 25 and $960,143 after 40 years. That’s about $1.3 million Canadian.

“There’s a lot of variance here. A person able to dedicate $517 per month toward retirement from their earliest days in the workforce who earns a high annual rate of return on their savings could wind up with a substantial sum for retirement. But this isn’t the reality for a lot of people,” the article explains.

Younger people, the article explains, are usually struggling with student debt and living costs while getting their first paycheque, likely at an entry-level job. For those starting late, “we can see that it’s much more difficult to retire on the nest egg they get from saving 10 per cent of their income per year.”

If you are starting late, the article suggests, maybe you should be aiming at saving 15 per cent of your income each year.

“If you can’t find a savings amount that works for you right now, you may have to consider delaying your retirement date. This gives you additional time to save while also reducing the length and cost of your retirement,” the article explains.

“Once you’ve settled on a plan that works for you, do your best to stick to it. Automate your retirement contributions where you can so you don’t forget them and remember to increase your retirement deferrals whenever you get a raise,” the article concludes.

It can seem impossible to get started on a “pay yourself first” strategy. A couple of tricks we learned along the way included the concept of banking your raise. Say you are making so much a year, and you are managing the bills, and then get a three per cent raise. Put the difference between your old paycheque and the new one in the bank and keep going as before.

The missus always has banked any money she gets from dental or vision claims, treating it like it was a small lottery jackpot.

If 10 per cent is too big an amount, try something less. Even one per cent directed to savings will add up over time. Increase that one per cent when you can.

If you are a member of the Saskatchewan Pension Plan and want to forecast what your savings might look like over time, check out SPP’s Wealth Calculator. This handy tool shows what you will get if you keep contributing at the same rate – and you can see what would happen if you bumped things up a bit.

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It’s an age-old question – is it better to focus on paying off your debt, or should you make saving money for the future a higher priority?

Save with SPP took a look around the blogosphere to see how the experts are weighing in on this topic.

At Forbes magazine, writer John Egan calls saving versus paying down debt “a balancing act that many of us face.”

His article suggests that the answer to that question “depends, in part, on whether you’ve already got enough money stashed for emergency savings, and how much high-interest debt you’re carrying.” For some, the answer may be a “balanced approach” where you are doing both things – saving and paying down – at the same time, he continues.

His article quotes Kansas City-based certified financial planner Dan Mathews as saying that you also have to look at the “opportunity cost” in this situation.

Huh?

“If you’re likely to earn six per cent in annual returns from retirement savings, but you’ve amassed credit card debt with an APR (annual percentage rate) of around 18 per cent, your best bet likely will be to first clear out the debt. Why? Because paying 18 per cent credit card interest will more than cancel out the six per cent you’ll earn from your savings,” the article explains.

The article suggests that you set up an emergency fund – enough to pay for six months of living costs – first. Then, when taking on debt, the article recommends that you “first pay attention to high-cost debt without any collateral, such as high-interest credit cards or a high-interest personal loan.”

If any of your debts are overdue, they should have super-priority, the article adds.

For saving, the article suggests that you focus your efforts on tax-efficient savings. Here in Canada, that would be contributing to a registered retirement savings plan or registered pension plan, or a Tax Free Savings Account. The point Forbes makes is that these accounts, in addition to offering you investment returns, will also offer you tax savings.

At Sun Life Canada, the authors suggest that if your debts are so bad that you can’t make the payments, a debt consolidation loan may be a first step.

But when tackling debt, the article suggests, there are some strategies to consider.

“It’s best if you pay off debt with the highest interest first,” the article advises. This, the article continues, usually means credit cards, and if you ignore them, “it will end up costing you dearly in interest.”

“Let’s say you make only the minimum payment (3.5 per cent) on a $5,000 credit card debt. You would end up paying $3,992.03 in interest over 187 months, or 15.6 years,” the article warns.

Sun Life also makes the same point about focusing your savings plan on tax-deferred or tax-free vehicles, like RRSPs and TFSAs.

The article gives the example of Chantal Pelletier, who has a mortgage she began four years ago at a rate of four per cent. The article suggests that investments in her RRSP and TFSA are a better choice than focusing on paying off the mortgage.

“Her investment earnings are also tax sheltered. And they would grow through the magic of compound interest, which is interest you earn on interest. In Chantal’s case, she’s better off saving for retirement, using registered investments. That’s a better strategy for her situation than paying off her mortgage faster,” the article concludes.

The folks at Nerdwallet see a hybrid approach as the best bet.

“Paying off debt can feel like it has to be your only priority,” their article begins. “But you should do some saving while you’re paying down debt. Even a small cushion of emergency savings can keep you from going deeper into debt when an unexpected expense pops up. And you don’t want to miss out on free money from an employer match on retirement savings if it’s available.”

That’s a good point – if your employer has a retirement program of some kind, be sure to take part, because you’ll get a tax deduction for contributions and as well, there may be an employer match to increase your savings rate.

The article suggests a “50/30/20” budget approach – this means half of your money goes on “needs, 30 per cent on wants, and 20 per cent on savings and debt paydowns beyond minimums.”

Your savings should operate under a “pay yourself first” method, where money earmarked for savings is “directly deposited… into a savings account.” This is better, the article continues, than hoping you’ll have something left over after the end of the month to put into savings.

The message thread that is clear from reading all these articles is that you need to be on top of both your debts and your savings assets. All three articles recommend a budget that sets out how much you want to save but also how much extra you want to pay on your debts. No matter how you target debt – smallest balance first, or highest interest rate first – the idea is that when one debt is paid off, the money you were paying for it should be applied to the next high-priority category.

Another point that you pick up from reading these articles is that you should always direct something – even a small amount – towards long-term saving. You can, the articles all say, ratchet that amount up when debts begin to clear up.

The Saskatchewan Pension Plan offers you a lot of much-needed flexibility on your savings efforts. Unlike other pension plans, SPP allows you to decide how much you want to contribute. You can increase or decrease your savings rate as you see fit. SPP will do the hard work of investing your savings via a professionally managed, low-cost pooled fund. And at retirement, your options include getting a set monthly annuity payment for life, or the more flexible Variable Benefit, where you decide how much you want to take out (or leave in).

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Is 70 the new 65? Canadians are retiring later: Global News

Regina’s Diane Clark tells Global News that retirement is not working out the way she planned it.

“We don’t travel anymore, we don’t buy as good of food as we used to buy, basically, and we stick at home a lot,” the 75-year-old tells Global News. Her pension investments took a big hit in the 2008 credit crisis, the broadcaster reports, and that plus post-COVID inflation has cramped her retirement income and lifestyle.

Asked what she would advise others to do, her answer was simple – “save, save, save,” Global reports.

Recent research from CIBC shows that more Canadians – perhaps mindful of the fact that a dollar doesn’t goes as far as it once did – are planning to exit the workforce later than planned, Global notes.

“About 66 per cent of Canadians are changing their plans for when they retire,” the Global article notes. “As a result, some retirees are looking to save more, while those already retired told CIBC they’re cutting back on planned travel or leisure activities, reassessing investments and adjusting their budget.”

So what can soon-to-be-retirees learn from this?

Global talked to CIBC’s Jamie Golombek, who suggested people should develop “an actual budget, and part of that budget should include retirement savings and making sure we’re taking advantage of all the different registered plans.”

If savings don’t generate enough income, work becomes less likely to become a thing of the past, the article continues.

The CIBC research found that “70 per cent say they anticipate having to work during their retirement either through a phased or semi-retired approach, with some working well past the retirement age of 65,” Global reports.

Other options, Golombek tells Global, include part-time or “gig economy” jobs.

Many older Canadians worry about having to depend on their adult kids in their later years.

“They’re absolutely terrified about outliving their savings and becoming a burden on their family,” Rudy Buttingol, president of the Canadian Association of Retired Persons (CARP), tells Global News.

CARP, the article says, wants to see the current registered retirement savings plan/registered retirement income fund rules become more flexible. The current rules, the article explains, “force some seniors who are still working to receive income that would better benefit them later in life.”

Bonnie-Jeanne MacDonald of the National Institute on Ageing is quoted in the article as noting that those who wait until 70 to collect their Canada Pension Plan and Old Age Security benefits will get a higher monthly amount.

“If you wait from age 60 to age 70, you’ll more than double this pension, which is guaranteed for life, it’s inflation indexed and it’s … a great deal when you do the math. It’s almost like an arbitrage opportunity because the incentives are so good,” she tells Global.

Members of the Saskatchewan Pension Plan have an option of interest to those who don’t want to draw down their retirement savings until later in life. With the Variable Benefit, you get “control over how much retirement income you wish to withdraw throughout the year,” with the rest of your funds continuing to be invested in either SPP’s Balanced Fund or Diversified Income Fund.

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Whether it’s money problems, weirdness at work, relationships going wonky or what have you, other people can bring you down.

In her book Let Them, author Mel Robbins provides a seemingly simple way to turn the situation around.

She begins by discussing the “5 second rule,” a coping strategy she developed during tough times with employment and money. “I was paralyzed by my own thoughts, and the last thing I wanted to do was get up and face another day,” she writes. But, she thought, why not try a NASA-style countdown – 5, 4, 3, 2, 1 – and then “launch myself out of bed.”

This little trigger helps you “take action before hesitation kicks in.”

And while the “5 second rule” helps trigger you to take action, Robbins searched for a way to address things like fear of failing, being “nervous about taking a risk… why do I have a hard time asking for what I need? What exactly is in my way?”

Her research found that for most of us, “struggling to change your life, achieve your goals, or feel happier… the problem isn’t you. The problem is the power you unknowingly give other people.”

“You make the mistake of thinking that if you say the right thing, everyone will be satisfied. If you bend over backward, maybe your partner won’t be disappointed. If you keep the peace, maybe your family will stop judging your choices,” she rights.

The solution, she says, to “driving yourself crazy trying to manage or please other people,” is “Let Them.”

“Let Them be grumpy. It’s not your problem,” she writes, Let Them “have their opinions… they don’t change who you are.”

“The more you let other people live their lives, the better your life gets,” she explains.

The book is filled with anecdotes to illustrate how simple idea works, and how liberating it is. “Let my family be late to absolutely everything we go to,” she writes. “Let Them leave dishes in the sink. Let my mother-in-law disagree with my parenting.” The list is exhaustive.

But “Let Them” is just half of the toolkit, she writes. “There is a second, critical part to the theory – Let Me.”

“That’s why the theory only works if you say both parts. When you say Let Them, you make a conscious decision not to allow other people’s behaviour to bother you. When you say Let Me, you take responsibility for what YOU do next,” she explains.

“Let Me immediately shows you what you can control…. your attitude, your behaviour… your values, your needs, your desires, and what YOU want to do in response to what just happened,” she writes.

In a chapter on stress, the book explains how the Let Them/Let Me tool can help you overcome it. “Stress causes you to doubt yourself, procrastinate, burn out, doom scroll, and struggle with comparison,” she warns.

In a chapter on dealing with difficult people – those who have negative opinions about you or your work, for example – the Let Them tool reasserts the idea that “adults are allowed to think whatever they want,” so fearing that sort of criticism “is a complete waste of time.”

“Let Them go silent. Let Them erupt. Let Them play the victim. Let Them sulk. Let Them deny that it happened. Let Them make it all about them,” she writes.

“Then, Let Me…. be the mature, wise, and loving adult in this situation. Let Me decide if I want to address them directly or not at all,” she advises.

It can help with “comparison” issues, where we feel inferior in appearance, wealth, or athleticism.

“There are two different types of comparison that people engage in – torture or teacher,” she explains. “Torture… is when you find yourself obsessed over, caught up in, or beating yourself up over something that you will never be able to change.”

Instead, “use comparison to your advantage” and learn from what others have done right. “Let it fuel your own journey. Other people’s success is evidence that you can do it too…. And build the extraordinary life you deserve.”

Closing chapters of the book use the techniques for such topics as restoring old friendships, creating new ones, embracing change, and helping others heal from downturns in life.

Robbins concludes by noting “you’ve always been in charge. You’ve always had the power. Now, it’s time to take it back.”

This is a well-written, well-researched book that is fun to read and even a little empowering. A good addition to your personal library, as we all go through periods of self-doubt and need to re-ignite our energy.

The Saskatchewan Pension Plan is a great savings partner in your dream of building up a retirement nest egg. If you aren’t sure how to invest in today’s turbulent markets, let them do the heavy lifting for you. SPP’s investments are professionally managed in a low-cost, pooled fund – and at retirement, you’ll choose among options such as a lifetime monthly annuity cheque, or the more flexible Variable Benefit.

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In the U.S., these millionaires see no need to retire

We all imagine the dream of suddenly having millions in the bank — and being able to instantly leave the workforce for a life of travel, leisure and fun.

But according to Business Insider, there are more than a few folks south of the border who – despite already having made those millions – plan to keep working into their 80s and beyond.

What? Let’s hear out their thinking.

“Many older Americans continue working into their retirement years, even though they’re millionaires,” the Business Insider article begins. And while many keep working “for financial reasons,” others just “want to keep their minds fresh and social lives full,” the article continues.

Jack Bishop, an Air Force vet and five-decade veteran of the restaurant industry, says he could have retired early, but chose not to. “My plan was to be retired at 55, but I felt like I was in my prime, and we were doing great,” Bishop tells Business Insider. “I wanted to keep my mind alive.”

Lawyer and real estate investor Michael Mosher, 74, is still hard at work running his 300-acre ranch in Texas, the article notes.

“You need to do something productive that engages your mind and body,” Mosher tells Business Insider. “As long as my brain holds up and my back and knees don’t go away, I’ll be a lawyer or rancher. I have the ability now to control my docket with the lawyer part so that I can run the ranch and not vegetate.”

Florida’s Anne Sallee tried retirement, but re-entered the workforce in her 60s, the article tells us.

“I consulted for free and volunteered in my community, but I can vividly remember the first time the doctor’s office asked me if I was retired, and I said yes. It was a painful moment,” Sallee tells Business Insider. She returned to the workforce after a two-year hiatus and now works as her city’s economic development coordinator.

“I had to be up and dressed at a desk at 8 every morning, which was a shock to my system,” Sallee states in the article. “I was used to a little more flexibility in my day, but I’ve been here now two years, and I absolutely love it.”

Deb Whitman, the American Association of Retired People’s chief public policy officer, tells Business Insider that “the number of people 55 and older who work or seek work is twice as high as in the 1990s, with Americans overall working longer.”

“One thing you’re seeing about people working longer is this fear of holding onto the job that they have because they might have lost one before or fear that they’ll be pushed out any day,” Whitman tells the publication.

We would estimate that about half of our old high school classmates, now in their mid-60s, are still on the job. The rest are either fully or semi-retired, doing other things. Building a retirement savings nest egg is certainly a factor in figuring out, one day, whether you can ease out of full time work into a part-time or consultant-type role – or to volunteer, or learn something new.

A great savings partner to know about is the Saskatchewan Pension Plan. With SPP, you decide how much to save, and how to get the savings to us – it can be preauthorized contributions from your bank account, it can be by cheque, it can be by a lump sum transfer and it can even be via credit card. We’ll take care of your money’s future by investing it in a low-cost, professionally managed pooled fund. When it’s time to ease out of your role, you’ll have income options that include a lifetime monthly annuity payment, or the more flexible Variable Benefit.

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First, it was one class a week. Then two. Then three. Some of our friends are doing four and even five.

We are talking about time in line dance classes throughout the week, including time we are instructors. And the classes are bursting out of the door. What’s the draw for happy seniors to be doing all this dancing?

Save with SPP took a look around to see what folks are saying about the benefits of dancing.

According to Yahoo Life UK, a new study from Northeastern University in Boston has found “that just 20 minutes of dance each day could help you hit your recommended exercise target.”

That’s any kind of dance, the article notes – the point is that you are being active.

And there are other measurable health benefits, the article continues.

A UK study found “moderate intensity dancing is linked to a lower risk of cardiovascular disease.” Mental health, the article continues, also benefits.

“Not only can dancing help you keep fit, it has a wide range of mental health benefits. If done in a social setting, dance can help improve connections and reduce feelings of loneliness and isolation,” the article notes.

Dance also helps your brain, the article adds.

“In addition to its mood-boosting effects, dancing can also promote learning, memory and navigational skills. One study suggested that a 30-minute salsa class boosted spatial working memory by 18 per cent after just one session,” the article reports.

“Dancing has even been linked to a lower risk of dementia, with a 2003 research paper published in the New England Journal of Medicine finding that regular dancing reduced the risk of dementia by 76 per cent,” the article concludes.

The Everyday Health blog lists a few more benefits.

“Dancing can be many things: An expression of art, a fun hobby, a representation of culture, and a great form of exercise,” writes Leah Groth.

Dancing, which the article refers to as “the ultimate workout” helps build core strength.

“Dance requires balance and helps build core strength, which helps promote good posture and prevent muscle injuries and back pain, according to the Mayo Clinic,” the article reports. Ballet, the article continues, is particularly ideal for core strength.

Another dance benefit, the article notes, is flexibility. “Many forms of dance stretch the limbs of the body, which improves flexibility,” the article adds. Again, ballet does this the best, the blog notes.

If you are looking to drop a few pounds, dance can get it done for you, the blog tells us.

“Depending on the style of dance and your bodyweight, 30 minutes of dancing can burn between 90 and 252 calories, according to the Harvard Medical School. This type of high-intensity calorie burning can help support weight loss if you’re trying to shed pounds,” the article explains.

The Myacare blog suggests that there are many overall benefits from dance.

“Aside from improving both mood and cognition, dance is known to enhance several other aspects of one’s mental-emotional health. Life satisfaction increases through practicing dance, as does one’s confidence, connection to self and ability to socialize. Genetic studies reveal that dancers have elevated levels of active genes that regulate serotonin and vasopressin expression, both of which make them far more social,” the article notes.

It also, the article states, is a way to age gracefully.

“In a meta-analysis that aimed to assess the benefits of dance for the elderly, it was shown that dance of any style is able to improve metabolism and balance in aged individuals, with or without chronic illnesses. Most data included interventions that spanned a length of 60 minutes, three times a week for a minimum of 12 weeks.”

When we talk to our fellow line dancers about why they like it, they hit most of these points. One dancer says she has no problem jumping in the car to drive to dance class – but it is more of an effort to make the trip to the gym. We are all making new friends and going to new places through dance, she says.

Retirement is a great time to take up new hobbies, like dancing. So it’s important for those of us who are not yet retired to build up some savings to fund the fun of our future selves.

If you have a workplace retirement program, be sure to sign up and contribute as much as you can. If you don’t, not to worry – the Saskatchewan Pension Plan has everything you need. You provide the savings, and SPP will invest them in a low-cost, professionally managed pooled fund. You can transfer in funds from your RRSPs to boost your SPP balance. And like an RRSP, contributions you make to SPP are tax deductible. Check out this made in Saskatchewan retirement savings solution all Canadians can enjoy.

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Canadians saving less, sharp drop in RRSP contributions: Edward Jones

Only 39 per cent of Canadians planned to contribute to their registered retirement savings plans (RRSPs) for the 2024 tax year, a sharp drop of 10 per cent from the previous year.

“Canadians’ ability to save for retirement is taking a significant hit,” begins a media release from Edward Jones Canada, discussing their most recent polling numbers.

The release suggests that “high living costs and debt burdens” are what’s preventing Canadians from saving.

The research, the release continues, found that just 15 per cent of Canadians planned to max out their RRSP contributions for 2024, “a drop of six points from the previous year.” And, the release adds, while 60 per cent of younger Canadians (aged 18 to 34) planned to contribute for the 2023 tax year, only 41 per cent planned to make contributions for 2024.

Worse still, Edward Jones Canada reports, “one in 10 Canadians indicate they cannot afford to invest in their RRSP at all.”

So what’s behind this retreat from saving?

“When it comes to the single biggest barrier Canadians face in saving for retirement, more than one-third (39 per cent) point to financial challenges caused by insufficient income, high cost of living and debt repayment,” the release points out.

“Amid economic uncertainty, it’s clear that Canadians are prioritizing their current expenses and putting retirement planning on the back burner” states Julie Petrera, Senior Strategist, Client Needs at Edward Jones, in the release. “And despite the crucial role a well-defined plan plays in overcoming financial barriers, many Canadians admit to not having a specific retirement savings strategy, underscoring a need for comprehensive financial guidance that balances short- and long-term financial priorities.”

No money to save, and no plan – that’s a problem. Let’s read on.

Just 26 per cent of those surveyed said they faced no savings “barriers,” the release continues, and “are on track to saving for their ideal retirement.”

There was, Edward Jones found, variations on this theme by age band.

Just 15 per cent of Millennials and 10 per cent of Gen Z respondents agree they have no barriers and are on track, the release notes. For younger Canadians barriers to saving also include “not knowing where to start without trusted financial advice (14 per cent of Millennials, 15 per cent of Gen Z), or that retirement feels too distant to plan for now (15 per cent of Millennials, 21 per cent of Gen Z),” the media release notes.

The release also notes that Canadians “recognize the importance of being financially resilient in retirement,” and that:

• 84 per cent say they will account for inflation while retired
• 84 per cent “want to be able to maintain their current lifestyle” in retirement
• 83 per cent agree healthcare in retirement “is an important priority”

“When it comes to determining how much to save for retirement, an alarming one-fifth (20 per cent) of Canadians report not having a specific strategy. Approximately half (51 per cent) say they rely on their income and budget to dictate their contribution, while 22 per cent rely on advice from financial advisors. Looking at age cohorts, Gen Z shows a distinct reliance on family or friends for guidance (28 per cent),” the release notes.

Final word to Julie Petrera, who states “at Edward Jones, we recognize that money is a thing, but it’s not everything. That’s why we work with clients to understand all of their unique priorities—both immediate and long-term—and then help them establish a plan to address all their goals.”

If there’s an overall takeaway from this research, it would seem that making saving a priority despite all the hurdles the economy can put in your way is a strategy worth considering. Many experts say you should make your savings automatic, so that the dough is in the piggy bank before you have a chance to spend it.

That sort of automated savings is easily available through the Saskatchewan Pension Plan. SPP members can set up automatic, pre-authorized contributions to SPP from their bank accounts; many make these coincide with pay day. You’re then paying your future self first and leaving SPP to do the heavy lifting of growing your savings through low-cost professional investing in a pooled fund.

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Building an emergency fund essential, experts say

These days, with so much uncertainty swirling around the economy, inflation, and trade, experts suggest that socking away money in an emergency fund may be a wise move.

Save with SPP took a look at what the experts are saying about emergency funds.

The Winnipeg Free Press calls emergency funds “an absolutely crucial part of any financial plan, regardless of the life stage or situation.”

“For people who already have high-interest-rate debt, having an emergency fund can help guard against resorting to additional high-cost financing in a pinch. It also helps you defray unexpected expenses without needing to raid your retirement accounts,” the newspaper reports.

“Finally, the big reason to have an emergency fund is to cover your basic costs in case of job loss,” the Free Press adds.

The paper suggests that your minimum target savings amount for an emergency fund should be three times your basic living expenses – that’s “housing costs, utilities, food expenses, servicing debt, insurance and taxes.”

You can subtract any savings you already have from that minimum target and then begin adding savings to make up the gap, the Free Press notes.

The folks at MoneySense set out some of the advantages of having an emergency fund.

A fund, the publication reports, can be put into use when you face:

• “Urgent major repairs (not renovations) to your home or car.”
• “Unexpected medical expenses not covered by universal health care or insurance.”
• “Lack of income due to job loss.”

“Just like the name implies, an emergency fund is meant for emergencies. Unexpected events happen in life: the car breaks down, the fridge stops working or you get laid off during a recession. Without an emergency fund to help cover your expenses, you could end up paying bills with a credit card, relying on payday loans or heavily using your secured or unsecured line of credit,” reports MoneySense.

Having to go that route means your emergency is costing you an additional 19.99 per cent (if paid via credit card) or an eye-popping 442 per cent if paid via payday loan, the publication warns.

Forbes magazine notes that your savings target will be larger if there are more people in your household than just you. Base your monthly expense number not only on your expenses, but all the expenses you cover for everyone under your roof, the magazine suggests.

Finding money to divert to your emergency fund may be as simple as trimming the “non-essentials” you spend money on, such as “clothing, entertainment, and dining out.”

“Go through the list of things you normally spend money on that aren’t actual needs and consider what you can reduce or eliminate,” the magazine suggests. If that doesn’t work, you may need to aim for a higher income.

“Consider ways you can make more money each month. This may include taking on extra hours at work, getting a part-time job or starting a side hustle. Even selling things around the house you no longer need can help. The more money you can bring in, the more you can add to your emergency savings,” Forbes advises.

Forbes concludes by suggesting four steps to help build your emergency savings:

• Make savings automatic – make an automatic deposit to your savings account every pay day.
• Save “windfalls,” like tax returns, rebates and “other unexpected financial windfalls.”
• Use “cash back” apps or cards and direct the money to savings.
• If you are getting tax refunds every year, considering reducing the tax withheld from your pay and adding the difference to your emergency fund.

Writing for GoBankingRates, Caitlyn Moorhead suggests a few more saving ideas for boosting the balance in your emergency fund.

Find a chequing account that also pays interest, and move the interest received to your emergency fund, she writes. Cut back on your cable package and bank the savings, she continues. Be a stickler about sticking to your grocery list, she advises, and develop a meal plan that is based on weekly grocery sales. Bank the extra money.

In fact, you consider your emergency fund to be a bill, she writes. Huh?

“When it comes to financial planning, it’s a lot easier to part with the money you put in savings when you take on the mindset that it’s just another bill. Instead of looking at saving as an optional move, think of it as a mandatory expense like paying rent or your phone bill. That way when unexpected expenses arise, you already have it covered,” she concludes.

We’ll add a few we used when building up our savings. Lottery ticket winnings can be banked. When you roll up your change, you can deposit it in your account. And when you get a payout from your dental or vision insurance, you can pop that into savings.

The same tactics listed in these articles can be used – perhaps once you have built up that emergency fund – to save for retirement. And a great vehicle to speed along that savings journey is the Saskatchewan Pension Plan. You provide the savings, SPP provides the investment expertise, and will grow your hard-earned loonies in their low-cost, professionally managed pooled fund. When it’s time to retire your choices include a lifetime monthly annuity payment or the more flexible Variable Benefit.

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Canadians think they’ll need $1.5 million to retire: BMO survey

Inflation is carving away at Canadians’ retirement nest eggs, a new BMO survey has found – making it harder to reach the $1.54 million savings target they think they’ll need.

A Yahoo! Finance article by Alicja Siekierska breaks down this and the other results of BMO’s research.

“According to BMO’s annual retirement survey of 1,500 Canadians, 76 per cent of respondents are worried they won’t have enough money in retirement due to rising prices. Another 63 per cent of Canadians say rising prices over the last year have hampered their ability to save for retirement,” she writes.

What are savers doing to offset inflation?

They have, the article notes, begun “cutting other spending,” or saving less for retirement. Other strategies include planning to work longer – or to “put off retirement savings completely,” Yahoo! Finance reports.

“Inflation is a major concern for Canadians, and the spike in prices as the economy emerged from the pandemic is a stark reminder rising prices can affect spending, investment and savings plans,” states Robert Kavcic, senior economist at BMO, in the article. 

“Inflation should always be a major consideration when saving and investing for retirement and if investors have concerns about how rising prices may impact their retirement savings, it might help to seek guidance from a financial professional,” he tells Yahoo! Finance.

The $1.54 million Canadians think they need to save is down from last year’s survey, where Canadians estimated they would need $1.7 million, the article notes.

And, despite inflationary pressures, the article points out that average registered retirement savings plan (RRSP) contributions have gone up, “rising 14 per cent over last year to $7,447. That’s also above the average contribution record of $6,822 set in 2021, when the COVID-19 pandemic saw savings rates go up.”

What can we do to offset the impacts of inflation, so we can keep saving for retirement?

According to an article from The Punch, there are a number of possible strategies.

Focus, the article suggests, on “priority” expenses and see if you can cut non-priority spending. Stick to a budget, the writers suggest. Save on transport costs by using public transport, The Punch continues, and consider additional streams of income such as “freelance work, taking up part-time jobs, monetizing skills, or venturing into a small-scale business.”

Be efficient with the energy you use, the article concludes, reduce dining out, and “haggle” for lower prices.

If you can keep a stream of retirement savings dollars going into your nest egg, your future you will thank you profusely. And if you are saving on your own for retirement, consider partnering-up with the Saskatchewan Pension Plan. SPP offers professional money management at a low cost – your savings dollars will be invested in a diversified, pooled fund. When it’s time to give back your ID badge, your SPP retirement income options include a lifetime monthly annuity payment, or the more flexible Variable Benefit.

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We frequently write, in this space, about good ideas to help boost your long-term retirement savings.

But what about the opposite – bad retirement decisions that can hurt or hinder your efforts? Using the theory that we often learn the most from making mistakes, Save with SPP scoured the Interweb to drum up some bad retirement ideas to avoid.

Let’s start with the Money.ca website, where Michelle Robertson discusses a half-dozen common retirement planning mistakes Canadians too frequently make.

The first, she explains, is “not having a plan.”

“Driving to retirement with no plan is like a trip to a mystery location with no map. You have no idea where you will end up,” she warns. “A plan shows if you’re investing enough to be ready at your desired retirement age. The more time and clarity you have, the easier it is to reach your goals,” she continues.

And for those who think their house will provide the retirement income they need, she suggests that “you can’t eat your house in retirement.”

“People see their house as an investment. They expect to use its equity in retirement. But, you can’t access your home’s equity if you live in it without borrowing your equity from the bank (for the second time),” she writes.

A third, classic mistake Robertson warns us about is to “take too much debt into retirement.”

“Debt is debilitating at any stage of life, but especially in retirement. It will quickly erode your retirement income,” she explains.

In an article published by GoBankingRates, Yaël Bizouati-Kennedy provides a few more bad ideas to watch out for.

First mistake, the article notes, is “starting your savings journey late.” The article quotes money and financial coach Adeola Monofi as saying “by starting early, you can leverage the power of compounding interest and allow your investments to grow significantly over time. Make it a priority to start saving for retirement as soon as possible, even if it means making small contributions initially.”

Another red flag is underestimating retirement expenses, the article continues. Healthcare costs can rise when you’re older, the article notes, as can the cost of housing, travel, hobbies and other leisure activities.

A third mistake is thinking that Canada Pension Plan (CPP) and Old Age Security (OAS) benefits will be enough to fund your retirement, the article notes.

“While programs like the CPP and OAS provide valuable income, they may not cover all your retirement needs,” Monofi is quoted as stating in the article. She tells GoBankingRates that these government benefits should be augmented by personal savings in “registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs), real estate, permanent life insurance and other investment vehicles suitable for your circumstances.”

Last word goes to Canadian Essence, who list, in an article by Ash Kaushik, some of the worst advice people can be given about retirement.

“Invest in only safe options, like bonds,” is one such piece of advice, the article reports.

“Bonds are risk-free, but if you’re obsessed with them – it’s counterproductive. Retiree funds have to keep up with inflation and a well-diversified portfolio comprising stocks can deliver higher long-term returns. Don’t play it too safe and you’ll fall short on your financial expectations,” the article warns.

Another bad bit of advice, the article continues, is that idea that if you haven’t saved enough, “you can always work longer if you’re not ready.”

“You shouldn’t rely on working longer to save money. Unexpected illness, unemployment or a caregiver need can lead to you retiring before you have any choice,” the article cautions.

“Retirement will be just like your vacation,” is our final bit of bad advice presented in the article.

“Retirement sounds simple enough, like a one-week vacation but it’s often not. Even all the free time feels a little unenjoyable if you don’t plan how to remain active, productive and be on track. So, don’t be surprised if you’re expecting a vacation-like lifestyle, but haven’t considered how you’ll spend your time or how you’ll cope with changes in your daily routine,” the article tells us.

Having left full-time work more than 10 years ago, this writer can attest to the truth of the “retirement is like a vacation” comment. It’s more like it is always the weekend, which is still good but a little different than being on a trip.

If you haven’t got going on your retirement savings yet, and don’t belong to any sort of retirement savings plan through your work, there’s an option out there for you that is worth considering – the Saskatchewan Pension Plan. SPP is an open, voluntary defined contribution pension plan that any Canadian can join.

You decide how much you want to save, and SPP does the rest, investing your savings dollars in a low-cost, professionally managed pooled fund. At retirement, among your options are a lifetime monthly annuity payment or the more flexible Variable Benefit.

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