Looking for ways to beat the pandemic blues

Let’s face it – the spring, summer and fall of 2020 have been quite a downer. We’ve been made to be holed up at home, are restricted in what we can do, where we can go and who we can see, and are continually worried about our jobs, our kids, and the bills.

The pandemic has hammered our mental health, reports Global News. “A survey done in conjunction with the Mental Health Commission of Canada found that a whopping 84 per cent of those surveyed felt their mental health had worsened since the onset of the pandemic,” the network reports.

“Similarly, an Ipsos survey done for Addictions and Mental Health Ontario found 45 per cent of Ontarians reported their mental health had suffered during the pandemic, with 67 per cent saying they expect those effects to be `serious and lasting,’” reports Global.

Save with SPP took a look around to see if there are any ideas out there on how to ward off these feelings of depression and anxiety.

According to Triathlon Magazine Canada, research from the Journal of the American Medical Association has found that “by being physically active, depressive symptoms decreased.” Even five minutes of activity did the trick, the magazine reports.

Other tips – develop, and stick to, a routine, the magazine suggests. Avoid the “western diet” of “processed meat, high-fat dairy products, and refined grains” as it is associated with increased risk of depression, the magazine advises. Their final suggestion is to try, even with the restrictions in place, to stay in touch with friends and family. “While tedious, Zoom calls are good for our mental health, but in person is far better,” say the folks at Triathlon Magazine Canada.

Over at Psychology Today magazine, Dr. Erin Leyba offers some additional tips.

Taking a warm bath at least twice a week “may help relieve symptoms of depression… even more than exercise does,” she writes.

Exercises like “jogging, cycling, walking, gardening and dancing” help increase your blood circulation, which in turn helps shift your brain’s reaction to stress. Doing nice things for friends and family will produce a “helper’s high” that makes our brains feel better, she writes. Examples are calling or face-timing an elderly relative, delivering groceries to someone, thanking front-line workers via cards or buying them lunches, or donating money to help those impacted by COVID-19.

Reading, as well as calling or video-chatting with friends are also positive steps to ward off depression, she writes.

The advice from the federal government is similar. Let your doctor know if you think you are suffering from depression, the feds advise, as depression “is a serious but treatable illness.”

Avoid isolation, the federal website urges.

“One-on-one interactions, such as going to a movie or out for coffee with a friend are also good forms of social contact. Being around others provides support, companionship and has a good effect on your general health,” the site notes, agreeing that physical activity and a healthy diet are also pluses.

These are all good pieces of advice that we all should take note of as we watch the pandemic play out. A colleague of ours once said that every crisis has a beginning, a middle, and an end. It’s nice to imagine the end of this one.

If saving for retirement is one of your worries, a solution may be joining the Saskatchewan Pension Plan. It’s great to have professionals running your investments (rather than trying to figure it out yourself), and the SPP grows your money at a very low fee. When it’s time to turn your savings into retirement income, SPP offers a variety of lifetime pension options via annuities. Check them out today!

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.

Sep 14: BEST FROM THE BLOGOSPHERE

Giving seniors online tools to help them cope with the pandemic

We recall how our dear parents (now departed) were not embracers of technology. When the folks finally broke down and bought a PC in the late ‘90s, dad said he had no interest in mastering “the device.” Mom fared a little better but was frightened off by pop-ups and other net nuisances. So “the device” sat, pristine and beautifully dust-free, in a faraway corner of the basement.

So it is understandable that many older seniors aren’t comfortable with computers.

An Ontario group hopes to help change that.

According to the Niagara Falls Review, the group Cyber-Seniors was designed to get younger people to teach their elders about how to use technology.

“We started Cyber-Seniors as a fun way to get seniors connected on the internet,” states the group’s co-founder Kascha Cassaday in the article. “But when COVID hit … it was more about they need to be on the internet in order to get the basic necessities to survive this pandemic.”

The group was started by Cassaday and her sister, Maccaulee, who just wanted to get their grandparents to use Facebook to stay in touch, the Review reports.

They did so by in-person sessions, attracting hundreds. When the pandemic forced them to move online, they started attracting thousands of people, the article says.

And the effort is producing results.

“(I was) afraid of breaking the computer because I didn’t know how to use it,” says 92-year-old Beamsville senior Patricia Harvey. Despite that, she joined Cyber-Seniors to try and figure out computers.

“I like to keep busy. I’m not a knitter or crocheter,” she tells the Review.

Now, using the Internet, she can talk to, and see family members who aren’t able to visit due to the pandemic. “You don’t feel quite so alone,” she says.

Recent research cited in the Review article says online tech can definitely battle isolation, but also can keep those over 65 “safe, stay at home longer, and live independently.”

The young volunteers are finding the work very rewarding, the article concludes.

Has COVID-19 changed your retirement plans?

CTV’s Pattie Lovett-Reid recently asked her Instagram followers if the pandemic had changed their retirement plans.

The short answer, she found, was yes. “Some are accelerating their plans, and others want to delay for as long as possible,” she writes. One follower who had retired has found the isolation and lack of travel so frustrating that she is planning to return to work. A small business owner had planned to sell his business and retire to the cottage, but can’t clear his inventory, the article notes.

Some have health issues and want to retire ASAP, while others are worried they’ll lose their jobs due to the pandemic and will have to delay retirement plans.

“Life can change in a heartbeat,” Lovett-Reid advises. It may be time to review your plan and make tweaks if necessary, she concludes.

The Saskatchewan Pension Plan can help you on both fronts. First, most of the plan’s services can be accessed online via MySPP. You can check your account balance, update your personal information, learn about SPP retirement options and much more.

If you’re tweaking your retirement plans, the SPP site is equipped with online calculators so you can figure out your income at different retirement dates. Check it out today!

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.

Canadians stressed about money, financial buffers can help: FP Canada’s Kelley Keehn

FP Canada recently released their annual 2020 Financial Stress Index. Save with SPP reached out to FP Canada’s consumer advocate Kelley Keehn, a noted financial author and educator, by email to find out about the survey’s results.

Q. Research shows money is number one worry, and that people worry about saving for retirement and debt. Is there a relationship between the two – like, if you are paying down debt you can’t save for retirement, and vice-versa? And maybe also did you find out what people think the consequences are of not having enough for retirement (working forever, a less exciting retirement, etc.)

Yes, money still is the #1 worry. FP Canada’s Financial Stress Index found yet again that people worry more about money than health, relationships or work.

The survey didn’t go into your exact questions, but I can anecdotally state that without a clear financial plan, it’s nearly impossible to figure out complex scenarios like paying down your debt vs. saving for an RRSP (or using the tax deduction to pay down on your debt), etc.  And you’re correct, that the consequences for not having saved enough for retirement means either living with less or working longer.  

Consistent with previous years, in 2020 money is the number one cause of stress for Canadians by a large margin. Money (38 per cent) outranks personal health (25 per cent), work (21 per cent) and relationships (16 per cent) as the top source of stress in Canadians’ lives. This is particularly significant given multitude of non-financial stresses related to the COVID-19 global pandemic.

The 2020 Financial Stress Index also reveals that as Canadians age, they feel less stressed about money – with 44 per cent of 18-to-34-year-olds listing money as their leading concern compared to one-in-four (25 per cent) of those aged 65+.

Q. Putting money aside for an emergency fund is a great idea – we would like to hear a bit more about this, if possible. Are people basically realizing they need to create one for the first time? Or are they moving from having a sort of contingency credit line to having actual savings? We guess it’s because of the pandemic that this is being considered more?

Before the crisis, many stats revealed that 50 per cent of Canadians were just $200 away from insolvency.  I don’t know the current numbers, but one could suggest that it’s much worse now.  And, many people don’t realize that the time to get a line of credit is when you don’t need it (i.e. not after you’ve lost your job). 

A recent Canadian Payroll Association survey revealed that it’s not the amount of income that you earn that reduces stress, it’s the financial buffer that you have.  The problem for younger Canadians is that they haven’t been in their career long enough to save (i.e. student loan debt, getting into a home). 

Q. The financial regrets part is fabulous. We wondered whether “having a better job” might refer to having a job with better benefits (or maybe just better money). We retirees sure wish we had had the brains to try and find a job with a good workplace pension earlier (this writer got such a job in his mid-30s). That sort of thing.

The survey didn’t dig deeper unfortunately.  But people really should think of their career as their fourth asset class. If you’re in a high-risk career like an entrepreneur, your investments should perhaps be less risky.  On the flip side, a professor with tenure likely takes less risk with their investments, but possibly should. It’s essential that your career is part of your financial plan (do you have a pension or not, benefits, etc.)

Q. The number one takeaway from the research – what results surprised you the most, and why?

That Canadians are still not reaching out for help and thus suffering sleepless nights.  We wouldn’t self-diagnose when it comes to our health, nor would we go on a new road trip without the help of Google maps on our phone.  Why do so many Canadians still not reach out to a financial pro like a Certified Financial Planner (CFP)?

We thank Kelley Keehn for taking the time to answer our questions, and her colleague Emma Ninham for setting things up.

Is the Saskatchewan Pension Plan part of your own financial plan? The SPP could serve as your personal defined contribution pension plan, a workplace pension or can supplement any workplace or government pension plans to which you belong. It’s a plan with a long history of successful investing returns at a very low management cost, and has averaged returns of more than eight per cent since inception. Consider checking out SPP as a way to help take the stress out of retirement saving.

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.

Keeping it simple makes your wealth plan elegant: JL Collins

No question about it, A Simple Plan to Wealth by JL Collins is ideally suited for those of us who “have better things to do with their precious time than think about money.”  This book grew out of a series of blog posts that were designed, in part, to enlighten the author’s kids, we are told. While a lot of the retirement saving messages are aimed at our friends south of the border, there is a lot of solid advice in these pages.

“Spend less than you earn – invest the surplus – avoid debt,” Collins begins. “Do simply this and you’ll wind up rich. Not just in money.” Collins adds that carrying debt “is as appealing as being covered with leeches and has much the same effect.”

Collins says even at age 13, he was a saver. “Watching my money grow was intoxicating.” And while savings first earmarked for a convertible ultimately were needed to pay for his college education, the important aspect of the story is having savings “in this fiscally insecure world.”

“To this day it stuns me to read about some middle-aged guy laid off from his job of 20 years and almost instantly broke. How does anyone let that happen? It is the result of failing to master money,” he writes.

Credit cards draw us in and then live in our pockets, he says. Early on, faced with a chance to put a $300 purchase on a credit card, he found that after paying the minimum he would owe 18 per cent on the balance of $290 that “they were hoping I’d let ride. What? Did these people think I was stupid,” he asks. But credit is not personal. “They think the same of all of us. And unfortunately, all too frequently they’re not wrong.”

Collins is a big proponent of stock investing, and notes that $12,000 invested in the U.S. S&P 500 in 1975 would be worth $1.07 million thirty years later. However, he says, most people lose money in the market because “we think we can time the market,” or “we believe we can pick individual stocks” or “winning mutual fund managers.”

Collins likes exchange-traded-funds (ETFs), specifically citing the Vanguard series. He also is quite aggressive in his personal portfolio mix – 75 per cent stocks, 20 per cent bonds, and five per cent cash, with stock and bond holdings all done via index ETFs. ETFs, he writes, have far lower fees than mutual funds, and there’s an argument for buying the entire index rather than trying to pick those stocks on it that are winners. He notes that Warren Buffett had similar advice for his shareholders – “put 10 per cent of cash in short-term government bonds and 90 per cent in a very low-cost S&P 500 index fund.”

Collins is also a “four per cent rule” skeptic, saying it is safer to draw three per cent per year from your retirement savings in order to live well without running out of money. “Stray much further out than seven per cent and your future will include dining on dog food,” he warns.

The key message throughout this easy-to-digest book is to stick to the plan and live within your means. Nothing, he concludes, “is worth paying interest to own.”

Be sure to earmark retirement savings in your plan. As the book suggests, the longer your savings have to grow, the more they will. The Saskatchewan Pension Plan has averaged growth of more than eight per cent annually since its inception in the 1980s, and the fee charged is currently about one per cent. Get your savings growing for you and consider checking out SPP today.

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.

Aug 31: BEST FROM THE BLOGOSPHERE

How much is the right amount to withdraw from retirement savings?

OK, so you’ve managed to squirrel away a nice chunk of money in your retirement fund. Now you’re ready to start taking the money out and you know, living off it.

But is there a sensible rule of thumb to employ so that you don’t run out of savings before you run out of life?

According to the Daily Mail in the U.K., there is a new idea making the rounds.

Investment company Vanguard says there’s a way to help make sure your money will last the 35 years or so that you may need it to last, the Daily Mail reports.

“The firm suggest savers determine their income by multiplying their portfolio by five per cent, then comparing it with the previous year and adjusting how much they remove accordingly,” the article says.

“If the fund is higher than the previous year, retirees should withdraw up to five per cent while if the portfolio has depreciated in value, income should be decreased by roughly two per cent.”

Simply put, don’t take out the same amount every year. Take out up to five per cent if your savings have gone up in value, and take out less, say three per cent, if it has not.

The conventional withdrawal rule that has been bandied about for years in the industry is that you can safely withdraw four per cent from your savings annually.

The new Vanguard formula flies in the face of that wisdom, and the four per cent rule was recently questioned by financial author Jason Heath in a MoneySense article.

“Over the half decade I’ve written this column and attempted to practice what it preaches, a central pillar has been the so-called 4 Per Cent Rule,” he writes.

“Problem is, with `lower for longer’ interest rates and the spectre of negative interest rates, is it still realistic for retirees to count on this guideline? Personally, I find it useful, even though I mentally take it down to three per cent to adjust for my own pessimism about rates and optimism that I will live a long, healthy life,” he writes.

He goes on to cite other experts who say four per cent “is a reasonable rule of thumb” for non-registered savings, but once RRSPs are converted into RRIFs, higher withdrawal amounts are mandated by the government anyway, making the withdrawal formula “moot.”

Let’s digest all this. You’ve got savings, you want to live on those savings. But up until now you have never had to live on a lump sum amount that gets smaller every year – you are used to getting a paycheque. Whether you take out two, three, or four percent (or some other mandatory percentage) of your savings every year, there will likely be less money in the piggy bank each year you get older, particularly at a time when interest rates are so low.

Do we want to be pre-occupied with withdrawal rates and decumulation strategies while we are trying to hit golf balls onto the fairway? Surely not.

But wait – if you’re a member of the Saskatchewan Pension Plan there’s a solution to this problem. SPP offers a variety of annuities for its members. When you come to retirement, you can convert any or all of your SPP savings into a monthly income payment – a lot like your old paycheque – that comes to you in the same amount for the rest of your life. You can never run out of money, no matter how long you live or what markets and interest rates do. Security is guaranteed. Check out SPP today.

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.

Urbanites flee to suburbs, country in light of the pandemic

In this peculiar era of social/physical distancing and avoiding crowds, it should probably come as no surprise that many city-dwellers are thinking of chucking city life for either the suburbs or the country.

According to the Toronto Sun, “nearly three in five people say living in a rural area is more appealing to them now than before the pandemic,” and the same percentage “say the same thing about living in the suburbs.”

“I think it’s too early to predict if it’s going to be a long-term trend or not…but we have all been locked up in our houses during COVID-19 and have had a lot of time to sit around and evaluate what’s important to us and we’re starting to see that shift outside of the major urban centres,” states Sean Morrison, president of the Ontario Real Estate Association, in the Sun article.

The article goes on to point out that it’s not just about avoiding crowded cities – the “work from home” aspect of the pandemic has also made getting a larger yard and perhaps a bigger house more attractive.

Commenting on the similar trend south of the border, Zillow’s Chief Economist Joshua Clark says the pandemic is at play in other ways.

Speaking to Realty Biz News, Clark notes “it may be tempting to conclude that urban renters who have been cooped up without outdoor space and unable to visit their favorite local bar are ready to commit to suburban life, and that is likely true for many. But that narrative ignores the job loss that has hit renters, who are disproportionately employed in the industries most affected, and has likely played a bigger role in recent moves.”

So those who were renting in the city may now only be able to afford to rent somewhere farther from the downtown core, he explains.

The Simple Dollar blog looks at the core question of whether or not it is truly cheaper to live outside of a city in a suburb or rural setting.  Buying a house, the blog reports, “can cost twice as much in the city versus the suburbs.” However, cities offer the best public transit, and groceries tend also to be cheaper downtown, the blog adds.

If you live far away from where you work, beware the perils of commuting, the blog warns.

“This means that if you are returning to your place of work from your home in the suburbs or a small town, you could be back to spending a great deal of time, money and stress sitting in traffic, which can take a toll on your health; Scientific American recently noted that long-distance commuters could suffer from physical maladies, including headaches and backaches, along with mental issues, ranging from sleep disturbance and fatigue to concentration issues,” the blog reports.

As one who has lived in the downtown of a major city, the suburbs, and in small towns in Ontario and Alberta, this writer can attest to the importance of the last point raised by Simple Dollar. A long commute to work – sometimes it can be hours each way – really takes it out of you. While most of us are working from home, that may not be the case forever – so think long-term if you are planning to move farther away from your place of work. If there’s a way to get to work without driving, that makes the suburban or rural property much more attractive.

You don’t have to travel to Kindersley, Sask. to open up a Saskatchewan Pension Plan account. Whether you’re downtown, flipping burgers in the ‘burbs or surveying your pasture, you can connect with SPP online to see if this plan is an option for you.  Once you’re a member, you can use MySPP to track the balances of your retirement accounts – all from the comfort of home.

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.

Aug 24: BEST FROM THE BLOGOSPHERE

Pandemic is causing 8 million Canucks to rethink retirement

There’s no question that 2020 has been a year like no other. Its effects on the economy and our finances have been profound.

A new study by Edward Jones and research company Age Wave, reported on by Global News, shows what impacts the pandemic has had on retirement savings in particular.

The report says a whopping eight million Canadians “are rethinking their retirement timing” due to the pandemic. While one of every 10 Canucks still plans to retire early, “one third believe they will retire later,” citing financial concerns, the Global article notes.

“If many working adults were not adequately prepared for retirement, COVID-19 has thrown them even farther off course,” the article notes.

The study found that two million Canadians “have stopped making regular savings to their retirement savings.” Before the pandemic, the research shows, 54 per cent of adults were confident about retirement. Now, that confidence indicator is down to 39 per cent, Global reports.

“Those who think they’ll have to postpone retirement cited needing more income, shrunken savings, investment losses and increased uncertainty about how much they’ll need in retirement,” the article says. “The few who are considering anticipating retirement amid the pandemic, on the other hand, said they `realized that they were looking forward to retirement, or they want to spend time doing other things that are more important to them than work,’” the article states.

The article quotes financial author Alexandra Macqueen as noting that those with workplace pension plans, notably defined benefit plans, aren’t as impacted by the pandemic and can still choose to retire early.

(Save with SPP interviewed Alexandra Macqueen recently, here’s a link to the interview)

“What I’m … thinking more and more is that the difference between people with pensions and without is getting so much more stark,” she says in the Global article.

The article notes that older Canadians (boomers and the cohort that is older than them, the “Silent Generation”) are generally doing fairly well during the pandemic, while younger generations (millennials, Gen Z, and Gen X) are struggling.

The older are helping the younger financially, the article concludes, while the younger generations are making sure their elders are staying health, a “silver lining” of intergenerational cooperation amidst the pandemic.

The article underlies the disparity between those who have a workplace pension and those who don’t. When you’re in a plan at work, pension contributions are deducted from your pay – the savings is automatic, a “set it and forget it” way to pay yourself first.

The pandemic will eventually end, but if you lack a workplace pension plan, you still can set up an automatic retirement saving system of your own.

The Saskatchewan Pension Plan lets you automate your retirement savings through pre-authorized transfers from your bank account. You can start small – an affordable contribution – and ramp it up when you’re making more in the future. If there’s a trick to retirement saving, it’s to start doing it and then keep on with it. Starting and stopping won’t get you there. Pay your future self first. The money you set aside today may be missed in the short term, but in the long run you’ll have more security for the future, post-work years.

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.

About one-third of Canadians lack an emergency fund – here are some tips to get you started

According to a recent article in MoneySense nearly two-thirds of Canadians have built an emergency fund. That’s great, but means that one-third of us have not.

For those of us is in that bottom third, an emergency fund is designed to cover “unexpected expenses, such as urgent major repairs (not renovations) to your home or car, unexpected medical expenses not covered by universal healthcare or insurance, or lack of income due to job loss,” MoneySense explains.

As many of us are finding out during this bizarre year 2020, without an emergency fund, these unexpected expenses are being covered “with a credit card… payday loans, or heavily using your unsecured line of credit,” the article continues. All of these are high-interest options, and the interest piles up if you can’t pay the money back in full.

Some folks also raid their retirement savings to pay the bills, a strategy that can backfire at tax time or in the distant future when you’re trying to leave the workforce – more about that later.

MoneySense recommends we all set aside enough money to cover “three to six months’ worth of fixed expenses.” OK, so we know the what and the why – let’s turn to the how.

An emergency fund, the article suggests, should not be set up like a retirement savings account. “Saving for an emergency isn’t about long-term goals, increasing your wealth, or planning for retirement, it’s about having immediate access to cash,” the site advises.

MoneySense recommends that you first create a budget to see how much you can set aside each month. That amount should be invested in either a TFSA or a high-interest savings account, the article notes. “Disconnect the account from your debit card so you won’t spend it,” the article advises. Automate payments so you don’t “forget” to make them, MoneySense says. “Pay yourself first.”

At Manulife’s website, the advice is similar. An additional idea on how to build the emergency fund is to cut back on costs – “think about how much you spend on coffee, lunches out, and other impulse purchases. Give up one or two things and week and stash that money into your savings,” the site suggests.

They also reiterate the idea of making savings automatic – treat your emergency fund “like a bill… the sooner it’s saved, the less time you will have to spend it.” Manulife also warns against the dangers of analysis paralysis – start small, say $10 a week or so, and ratchet things up as you go along.

Sun Life covers much of the same ground, but warns against using debt as an emergency fund or tapping into retirement savings.

“All withdrawals from RRSPs (except for education and home purchases, under the Lifelong Learning Plan and the Home Buyers’ Plan, respectively) are subject to income tax and will result in the permanent loss of contribution room – that is, once you’ve taken it out, you can’t put it back in. Any withdrawals from your RRSP are immediately subject to withholding tax,” Sun Life explains.

“If you withdraw up to $5,000, the withholding tax rate is 10 per cent. If you withdraw between $5,001 and $15,000, the withholding tax rate is 20 per cent, and more than $15,000, the rate is 30 per cent. These tax rates apply in all provinces except Quebec, where provincial tax rates apply on top of the federal withholding tax,” the Sun Life article warns.

So to recap – create a savings account that isn’t hooked up to any of your cards, and automatically transfer money into it regularly. Keep the money in some sort of high-interest savings account so that it remains liquid, and ready to spend when an emergency arrives. You don’t want to risk losses here.

Think of it as an obligation, like a bill, that you have to pay each month. Then set it and forget it, until the next emergency comes along.

And if you’re busily automating your emergency fund savings, think about doing the same thing for your Saskatchewan Pension Plan retirement account. Have a pre-set amount earmarked for retirement automatically withdrawn from your bank account every payday. That way, just as is the case for a well-designed emergency fund, you’re paying your future self first.

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.

Aug 17: BEST FROM THE BLOGOSPHERE

Are Canadians getting sidetracked in their retirement savings efforts?

What’s something that you begin to think about for the first time in your 20s and 30s, and begin to worry about once you’re in your 60s?

No, it’s not growing old. According to new research from Franklin Templeton, reported upon in Wealth Professional, that multi-decade preoccupation is saving for retirement.

Franklin Templeton’s Retirement Income Strategies & Expectations (RISE) research found that 79 per cent of Canadians “believe someone should start saving for retirement by the time they’re 30 years old,” the magazine reports. But only about half of those surveyed – 41 per cent – said they did start saving at that age, Wealth Professional reports.

“Looking at the top three financial priorities reported by each participating age group, the survey showed that retirement saving is a top objective among those in their 30s, and it remains as a primary consideration for people up to their 60s,” the magazine explains.

So what’s getting in the way of retirement saving?

According to the survey, “one-third said they fell short because they had to prioritize debt repayment, and one-fourth blamed their shortfall on an unexpected life event or expense.”

Right up there with retirement saving as chief concerns – in all age groups – were “paying off unsecured debt” and “having sufficient savings to cover unexpected expenses,” the survey data shows.

So if Canadians generally aren’t able to save much for retirement, how do they think the golden years will work out?

Even though three-quarters of those surveyed were “confident” about retirement, 73 per cent expressed concern “about potentially outliving their savings,” and 48 per cent admit they have yet to develop a retirement plan.

Without plans or savings, it’s not surprising to learn that Canadians – 42 per cent – expect to have a “later than expected” retirement, Wealth Professional notes. What the magazine did find surprising was that retirees polled expressed “regret at not having saved more” (56 per cent) and noted their expenses had actually gone up in retirement (61 per cent).

The Cole’s Notes version of this is quite simple. We all think we should start saving regularly while we’re young, but then find we can’t or don’t. And when we’re older, we regret that decision. So why not make saving the new “not saving?”

Like any big project, saving for retirement can sound intimidating. Who can suddenly put some high percentage of take-home income away in a retirement savings account? A trick that works is to start small. Can you afford to save $5 a week? Start there. Down the road, when you can, increase it, maybe to $10. Be sure that your savings are automatically withdrawn from your bank account so you don’t accidentally crack into the money. Make it automatic, keep increasing the contributions, and over time, savings will start to pile up. You can use an automated approach with the Saskatchewan Pension Plan.

You can also set up your SPP account in the “bill payments” area of your bank account, and then transfer any cash left over following bill payments to your plan. SPP will quietly and efficiently grow your money over time, and when it’s time to hit the parachute and escape from work, your SPP pension will be ready to provide you income for life via a choice of annuity options. Be sure to check them out today!

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.

Aug 10: BEST FROM THE BLOGOSPHERE

Some tips to get your retirement plan back on track

While markets have gradually recovered from a brutal spring, some folks who were on track to retire may be thinking about staying on the job – or going back.

The Motley Fool blog offers some tips on how to get your retirement back on track, without necessarily having to go back to your old job.

“Rejoining the workforce is one option, but it doesn’t appeal to everyone,” the blog explains. “Those at a higher risk for COVID-19 may not feel comfortable exposing themselves to others who may have the illness, and even retirees who want to work may not be able to find a job with so many businesses shuttered or closed for good,” the Motley Fool adds.

If you’re retired, and your savings have been negatively impacted, try to cut back on spending, the blog advises.

“Limit the amount you spend on dining out, entertainment, and travel. Ask yourself before every purchase whether you actually need to buy that item or if you just want it,” the blog advises. Other money-saving tips include using reward points and cash-back options, taking advantage of sales, and making use of senior discounts, the blog notes.

An additional tip is to “rethink your plans for retirement.”

“Consider shortening or skipping planned vacations and avoid big-ticket purchases unless they’re absolutely necessary. Retirement will be less expensive without these costly purchases in your budget, and you can use the money you were planning to spend on trips to cover your basic expenses,” the Motley Fool suggests.

If you don’t (or can’t) go back to your old job, consider a “side hustle that doesn’t require a lot of work,” the blog states.

Rent out a spare room, or a parking spot. See if you can walk neighbour’s dogs for a few bucks. Become a house-sitter. “Think about what skills you possess or what jobs you might like to do and how to market yourself. Word of mouth and social media can be a good starting point,” the blog notes.

The last tranche of advice is aimed at American readers, but basically, the idea is to see if you qualify for any retirement benefits from the government. A drop in your income from your retirement savings might mean an increase in benefits like Old Age Security (OAS), which can be “clawed back” for higher-income earners.

“When you’re living on a fixed income, every dollar matters. These strategies may not all appeal to you, but try the ones that do to see what difference they can make,” the blog concludes.

One of the great features of the Saskatchewan Pension Plan is the fact that you can receive a lifetime pension via an annuity. The plan has several annuity options you can choose from. While many Canadian retirees worry about living on income from fluctuating investments, an annuity means you’ll get the same payment every month for as long as you live, regardless of whether the markets go up or down. And you can choose an annuity that provides security for your beneficiaries as well. It’s just another way SPP builds security into your retirement.

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.