As interest rates rise, is it time to look anew at fixed income investments?

November 25, 2021

Interest rates have been so low for so long it is hard to remember the long-ago days when everyone had Canada Savings Bonds and/or guaranteed investment certificates (GICs) in their portfolios.

Save with SPP decided to look around to see what the expected rise in interest rates (and inflation) may do with Canadians’ saving plans.

Writing in the Globe and Mail, columnist Rita Trachur explains that one fear that’s out there right now is that Canadians may risk “aggravating inflation by blowing through their savings” as the pandemic (apparently) winds to a close.

She proposes that Ottawa consider bringing back – temporarily – the old Canada Savings Bond program.

“Many of us who are on the wrong side of 40 fondly remember a time when we could make juicy returns by investing in Canada Savings Bonds. Not only were they easy to purchase and risk-free, those paper certificates were oh so cool. Most importantly, though, they taught generations of Canadians how to save,” she writes.

Back in the 1970s and 1980s, when interest rates reached double-digits, Canadians held $55 billion in savings bonds. But they began to wane in popularity, Trachur writes, due to competing products like “GICs, mutual funds, and low-fee trading accounts.”

But with rising interest rates on the horizon, maybe a modern version of the Canada Savings Bond could be relaunched, writes Trachur.

“The bonds should be tax-free and have short investment terms – perhaps one year and 18 months, as examples – to give consumers real incentives to keep stashing their cash over the near term. That kind of flexibility would also give people the ability to reassess their options once interest rates start to rise,” she writes. This type of product would be a safe investment for regular people, she concludes.

Another reason to look at interest-paying investments may be the link between higher rates and lower stock prices, reports US News & World Report.

“When interest rates are low, companies and consumers can borrower cheaply and tend to spend more money, which can boost corporate profits. When interest rates rise, consumers and companies typically curb their spending, which can result in lower stock prices,” the newspaper explains.

A rise in interest rates is also bad for bond prices, the article adds. “Bonds and interest rates have an inverse relationship, meaning that bond prices fall when interest rates rise,” the article explains. “But don’t liquidate your bond positions yet. Experts say bonds still hold value in an investment portfolio.”

It’s a complicated topic, to be sure. The old rule of thumb used to be that your age was the percentage of your savings that should be in fixed-income (bonds, GICs, etc.), with the rest in equity. So if you are 60, the rule suggests, 60 per cent should be in fixed income – the argument being that this would “safen” your overall holdings from some of the ups and downs the equity markets can provide.

Balance is a good thing in investing. The Saskatchewan Pension Plan’s Balanced Fund currently has this asset mix – 50 per cent Canadian, U.S. and non-North American equity, 26 per cent bonds, 7.5 per cent mortgages, 10 per cent real estate, five per cent infrastructure and 1.5 per cent in short term investments. SPP’s managers can switch up this mix to align with changing market conditions, so that all your eggs are never in just one basket. SPP has been helping Canadians save for retirement for 35 years; 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.


Nov 22: BEST FROM THE BLOGOSPHERE

November 22, 2021

New retirement plan’s goal is to “coast” into retirement

Writing in the Toronto Star, Lesley-Anne Scorgie reveals a new variation on the “financial independence, retire early” or FIRE plan.

This new variant, she tells us, is called the Coast FIRE plan.

But let’s backtrack. What exactly is the basic FIRE plan?

Scorgie writes that the FIRE movement was born in the late 1990s.

“These people were obsessed with early retirement and were willing to sacrifice just about anything to contribute significant sums of money to their nest egg as quickly as possible so that they could quit their jobs generally before age 50 and start to ‘live,’” she explains.

But, she says, for many this FIRE plan meant “going without vacations, eating beans daily and just being a cheapskate.” The idea was that foregoing the “extras” in life would allow one to put away thousands a month until having enough money to retire completely by age 50.

“I have two major issues with the concept,” she writes. “Firstly, the lifestyle of ultra-frugality is not appealing. Secondly, banking many thousands of dollars every month throughout your 20s, 30s and 40s is pretty unattainable for most people living in just about any city in Canada. The cost of living and debt are major preventative barriers.”

She goes on to point out “also, who retires at 50? You could have a whole other life, career and so on at that age!”

This is where Coast FIRE puts a different spin on the plan.

There is still an emphasis on financial independence, writes Scorgie, but “you steadily build up your nest egg until it reaches a point where it can grow independently through the power of compound interest and reinvested returns to the ultimate nest egg size you want, without you having to save another dime after you get to that initial savings point.”

So rather than having a hard stop to work, this variant of the plan has you basically creating a significant wealth creation nest egg that allows you to bolster your retirement income significantly when it’s time to log off for a final time.

And that’s the significant difference – the frugality and penny-pinching ends when your nest egg has reached its target amount.

“Once you reach the point where you no longer need to add another dollar to your retirement portfolio, you can have loads more freedom to do what you want like — work part-time or at a different job you like better, enjoy more cash flow for vacations and fun because you no longer have to tuck away 20 per cent of your income into your registered retirement savings plan (RRSP) and tax free savings account (TFSA),” she writes.

To figure out this retirement math, you need to have a general idea of when you want to retire (age) and the approximate money you will need for financial independence at that age. Scorgie says there are many Coast FIRE calculators out there to help you figure out your numbers, but key to the calculation is “current age, desired retirement age, a safe withdrawal rate… and an inflation-adjusted growth rate.”

This is a great column, and Scorgie’s views make a lot of sense. Many of us, for instance, only put away enough money in RRSPs to get us a tax refund each year. Not putting away enough when you are young makes it harder to catch up later.

Scorgie concludes by recommending that we all get some financial advice to ensure our savings plan is sound, also a wise suggestion.

If you are looking for a retirement savings vehicle that can generate steady growth and good returns during the time between now and the time to “coast” into retirement, consider the Saskatchewan Pension Plan. While past performance is not an indicator of future growth, the plan has averaged returns of eight per cent since its inception in 1986. That’s helped many of us build our retirement nest eggs. 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.


Exercise that boosts flexibility, corrects posture can slow aging process: Aging Backwards

November 18, 2021

We talk – some might say endlessly – about saving for retirement, the need for income for the latter part of our lives, and so on.

But the book Aging Backwards by Miranda Esmonde-White focuses on the other side of retirement – having a sensible exercise plan that keeps your body from aging prematurely.

Most people, she begins, may see aging “as something they have no control over, just like the passage of time.” However, she says, “you absolutely do have a choice in the age of your bones, your muscles, your internal organs and your skin.” Thirty minutes per day of targeted exercise, she writes, can decide between a “vital, energetic and healthy” life versus “a life of joint and back pain, limited mobility, and a lack of physical strength.”

The exercise program that Esmonde-White prescribes is called the “Essentrics” system, which she writes is “exactly the opposite of the unproductive, dangerous ‘no pain no gain’ philosophy of yore.” She says it is more about “no pain, all pleasure.”

She notes that every minute you exercise lengthens your life by seven minutes… “a guaranteed 1-to-7 return on your investment.”

And for those who argue that genetics controls how you will age, she cites research that shows only 25 per cent of our longevity is determined by our genes – the rest is “due to lifestyle and environmental factors.”

Another crucial stat she cites is that those with a “somewhat sedentary, somewhat active” lifestyle lose seven to eight per cent of their body’s cells each decade. Those who exercise “using the entirety of their musculature lose an average of only two to three per cent of… cells each decade.”

The second half of the book gets into the Essentrics program, which has elements of isotonic, concentric and eccentric exercise. She notes that the movements in the program mimic some of the activities that were common for everyone in the past – such as cleaning the windows, mopping the floors, and moving furniture.

“The unfortunate truth is that many of us rarely do these chores anymore, and if we do them at all we don’t do them long enough to derive any real benefit from them,” Esmonde-White explains.

The last part of the book shows all the workouts, with photos. There are exercises like ceiling reaches and the “open chest swan sequence” to improve your posture. The weight loss exercises include a “pulling weeds sequence” and some plie-type dance movements. There’s a “washing tables” movement, as well as a “washing windows” exercise in the section on exercise to soothe your joints. Calf stretches and “barre footwork” with a simple chair are found in the “increase your energy section.” There are many more exercises and many more sections in this informative how-to book.

She concludes by writing that if you decide against regular, targeted exercise, “all you are `putting off’ is your chance of having a vital, exciting, energized time well into your twilight years.”

There is a contagious enthusiasm in this well-written book that coaxes you out of the easy chair and into more exercise. It’s definitely a book worth adding to your personal fitness library.

If, as we have read, the payoff from targeted exercise is longevity, one must invariably think about addressing the cost of that extra time on earth. You’ll still need food, shelter and some sort of fuel in the future, and all of these things will cost money. If you’ve got a retirement program at work, you are ahead of the game – be sure to join it.

But if not, you’ll need to carry the retirement savings load on your own shoulders. And if you put that off, you’ll run out of time to catch up later. A handy solution to the problem is the Saskatchewan Pension Plan, a one-stop shop for setting up your very own personal pension.

Be sure to check out SPP – celebrating its 35th year of operations – 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.


Nov 15: BEST FROM THE BLOGOSPHERE

November 15, 2021

Canadian pension system earns a “B” rating

Canada’s pension system stacks up reasonably well against those of other developed countries, reports Wealth Professional.

The magazine cites new research from the Mercer CFA Global Pension Index, research that covered pension systems that served “65 per cent of the world’s population,” and notes that Canada retained its prior “B” rating.

“Ranked for adequacy, sustainability, and integrity, Iceland came top … with an overall score of 84.2, followed by the Netherlands (83.5) and Denmark (82.0),” Wealth Professional reports.

Canada, the magazine reports, came in at 69.8, putting it “ahead of countries including the U.S. (61.4), Germany (67.9) and New Zealand (67.4).”

So while “B” is not bad, there is still work to be done, the magazine article continues. A higher overall savings rate (thanks to COVID) and economic growth help, but there are still issues that need to be addressed, the magazine adds.

“While COVID-19 had a disproportionate impact on the retirement savings of certain groups, such as women, gender gaps in retirement savings have long existed,” Scott Clausen, a Mercer Canada partner, tells Wealth Professional. “Employers are encouraged to review the design of their pension plans, as well as other compensation programs, to ensure that they are not unconsciously disadvantaging women in their workforce,” he states in the article.

The article points out that “most of the Canadian workforce are left to save for their pension themselves rather than through workplace schemes.”

Clausen tells Wealth Professional that this shortfall in coverage represents an opportunity for the country.

“Employers can provide a pension to their employees, while delegating the governance and administration responsibilities to a third party, by joining a collective defined benefit pension plan or by providing an outsourced defined contribution pension plan,” he states in the article.

Making it easier for women to save is something that pension systems in Canada and worldwide need to improve on, says Mercer’s Dr. David Knox. He tells Wealth Professional “the world cannot sit idle as data shows that poverty among older people is more prevalent for women.”

He suggests making it easier for individuals to join pension plans generally, as well as adding some sort of pension credit system that factors in time spent caring “for the young and the old.” Decades ago, it was quite common for most employers to offer some sort of pension plan for their employees. Over the years, the level of coverage has slipped.

The bottom line is this – if there’s any sort of pension arrangement at your place of work, be sure to join and contribute to the maximum. After a while, like any benefit deducted from your paycheque, you won’t notice money being put away for your future.

If there isn’t a plan to join at work, the responsibility for retirement saving has been shifted onto your shoulders. If you’re not sure how to go about the job of saving, the Saskatchewan Pension Plan may be an answer. SPP will invest the money you contribute – professionally, and at a low rate – and then can convert your nest egg to retirement income down the road. This do-it-yourself pension plan has been getting it done for an impressive 35 years. 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.


Nov 8: BEST FROM THE BLOGOSPHERE

November 8, 2021

More than three quarters of older Canadians fretting about retirement finances: NIA

Is retirement a concern for Canadians – especially those aged 55 to 69 who are approaching or have begun their “golden years?”

New research from the National Institute on Ageing at Toronto’s Ryerson University, reported on by CTV News, suggests that a significant majority of older folks are indeed quite worried.

According to the CTV report, the research found that “77 per cent of Canadians within the 55-69 age demographic are worried about their financial health.” As well, CTV notes, “79 per cent of respondents aged 55 and older revealed that their retirement income – through RRSPs, pension plans and Old Age Security – will not be enough for a comfortable retirement.”

The NIA research found that people were worried about the cost of long-term care in the latter part of their retired life.

While 44 per cent say the plan is to “age at home,” the data suggests that many don’t realize how expensive long-term care at a facility would be.

“Nearly half of respondents aged 45 and older believe that in-home care for themselves or a loved one would cost about $1,100 per month, while 37 per cent think it would cost about $2,000 per month,” CTV reports.

“In reality, it actually costs about $3,000 per month to provide in-home care comparable to a long-term care facility, according to Ontario’s Ministry of Health,” the broadcaster explains.

It’s essential that Canadians know the true costs of long-term care as they plan for the future, says Dr. Bonnie-Jeanne MacDonald of the NIA.

“Canadians retiring today are likely going to face longer and more expensive retirements than their parents – solving this disconnect will need better planning by people and innovation from industry and government,” she tells CTV.

Dr. MacDonald suggests one step we can take early in retirement to help us fund unexpected care costs later is deferring our Canada Pension Plan or Quebec Pension Plan payments until age 70.

Dr. MacDonald spoke to Save with SPP on this topic in detail earlier this year.

“Someone receiving $1,000 per month at age 60 would receive $2,218.75 per month if they wait until age 70 to begin collecting,” the article notes. Another source of income for long-term care costs could be the equity in your home, the article concludes.

Save with SPP has gone through this, with both our parents having had to receive the help of a long-term care facility to battle health issues in their latter years. Fortunately our parents had always been savers, and their retirement income was sufficient to handle these unexpected costs. Will yours?

If there’s a retirement savings program available at your workplace, consider joining it and contributing at the maximum possible level. If your employer doesn’t offer a program, refer the boss to the Saskatchewan Pension Plan. They can help set up a retirement program at businesses large and small. Check out SPP, marking 35 years of delivering retirement security, 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.


Pandemic created a wave of migration to smaller towns and other provinces – will it continue?

November 4, 2021

Many people young and old made a big change in their living arrangements during the pandemic.

Younger people – liberated from having to go to the office each day – sought more affordable housing in other cities or provinces. City dwellers generally, including retirees, wondered if it would be safer during times of COVID to move to places with lower infection rates.

Save with SPP took a look around the Interweb to see how this is playing out now that the pandemic is (hopefully) starting to turn the final corner towards “over.”

Better Dwelling magazine reports on how people have left Ontario to live in Atlantic Canada. In the second quarter of 2021, Nova Scotia and New Brunswick attracted 4,678 and 2,145 interprovincial newcomers. Ontario saw an outflow of 11,857 people in the same quarter, the magazine reports.

What’s the attraction?

“Lower COVID spread in the Maritimes probably amplified the region’s appeal. But relatively affordable housing was likely an even bigger draw, especially as home prices skyrocketed in already-expensive parts of the country and more Canadians were able to work remotely,” states RBC economist Carrie Freestone in the article. 

“With housing affordability worsening in major urban markets in Central Canada, this may mark the beginning of a trend: young talent moving east for an improved quality of life,” she tells Better Dwelling.

But it’s not just Ontario that is seeing people move. Closer to home, Alberta is also seeing people pack up to start over elsewhere, reports the CBC via Yahoo! News.

Why are they leaving?

The article says high COVID case counts may be one reason, but quotes Mount Royal Professor David Finch as saying “”Young people are leaving the province for a variety of reasons — some tied to employment, some tied to economics or education.”

A recent study, the 2020 Calgary Attitudes and Outlook Survey, found that a startling 27 per cent of Calgarians aged 18 to 24 planned to leave the city in the next five years, the CBC reports.

“In Alberta, there is a perception that there is a lack of diverse career pathways, leading people to look at other parts of Canada or beyond for opportunities in education or employment that may be closer aligned to their career objectives and social values,” Finch states in the article.

Retirees thinking of relocating to cheaper places need to think the idea through carefully, suggests the Boomer & Echo blog.

Most seniors making such moves do so for better weather, as well as “proximity to family, affordable housing costs, the availability of healthcare facilities, and things to do,” the blog notes.

A lower housing budget will give you more money for travel (when travelling is more common), the blog adds. The blog advises that you try visiting your intended destination for a long stay before committing to the move, and go in both summer and winter. Check differences in provincial tax rates, and find out about transferring your provincial healthcare.

The grass may appear greener down the highway, but you may expect some higher costs and fewer services if you move from a city to a smaller centre, warns the Globe and Mail.

The article cites the example of Ian Cable and Amy Stewart, who decided to move from Toronto to Owen Sound, a small city on the shores of Lake Huron. They found that the cost of a house in Owen Sound “was a fraction (of the cost) of a similar property in Toronto.”

But in Toronto, with a vast public transit system, they only needed one vehicle; in Owen Sound they have two. Isaiah Chan of the Credit Counselling Society tells the Globe that smaller town residents usually have to drive more often, and farther – instead of a half hour drive for your kids’ hockey you might now be looking at two to three hours, Chan says.

The article flags other possible problems – are you on a water and sewer system, or septic tanks and wells? If you need to return to the office from the country, can you afford the commute, the article asks.

The article concludes by suggesting anyone moving to a smaller place to save money must do thorough research on what the full costs of living there will be.

The key takeaways here seem to be that you need to get as much intel as possible about the place you are thinking of moving to before you make the jump. Save with SPP once travelled two hours by car – each way – to work from about 10 years. The cost of keeping the car going tended to wipe out any advantage from the lower cost of living.

In a way, retirement is like a destination – a place where you are going to go one day. The intel you need to know now is whether or not you have sufficient retirement income. If you are in a retirement plan at work, great; if not, consider joining it. If there isn’t a plan, the Saskatchewan Pension Plan has everything you need to set up your own individual or employer-based one. Wherever you end up in retirement, things will go more smoothly if you can unpack some retirement income when you get there, so check out SPP – celebrating 35 years of building retirement futures – 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.


Nov 1: BEST FROM THE BLOGOSPHERE

November 1, 2021

U.K. research shows a lack of pension awareness, confusion on how plans work

While it’s great to be encouraging people to join pension plans if they can, and to save for retirement on their own if they can’t, new research from the U.K. suggests we may need to educate people a little better first.

According to Employee Benefits, a recent survey carried out by U.K. HR and payroll services firm MHR found that one in four Britons didn’t have a pension at work – and that “58 per cent of respondents admitted they find it hard to understand how their schemes operate and how to contribute to a pension plan.”

The research prompted MHR’s CFO, Mark Jenkins, to tell Employee Benefits that this figure shows “the stark reality of how unprepared today’s workforces are for their future.”

The article, citing research by Canada Life, suggests there is a gender divide in the U.K. on the issue of retirement confidence, with “two-thirds of men feeling confident they will retire at the age they intend to, compared to around half of women.”

As well, the Canada Life research showed fewer women than men “did not feel they would have any financial worries in retirement, at 45 per cent and 58 per cent respectively,” Employee Benefits reports. “This suggests that targeted pensions communications may be needed to address this gender imbalance,” the article adds.

Finally, the article – citing a third batch of research from Nudge Global – notes that “only 32 per cent of (U.K.) respondents receive” personal finance education (known on this side of the pond as financial literacy). All this research leads the Employee Benefits editor, Kavitha Sivasubramaniam, to conclude that despite the fact that Brits have “auto-enrolment” in workplace pension plans (they are automatically signed up for any pension program, with the right to opt out) “it hasn’t necessarily increased engagement with, or understanding of, pensions among employees.”

She goes on to write that “studies are constantly reaching the same conclusion, highlighting that raising pensions awareness is still most definitely a work in progress.”

One could easily write a book about pension awareness/literacy. So let’s not do that here. Let’s just say this – if you’re not sure whether or not your workplace offers a retirement plan, find out from a co-worker, the boss, your internal website, the HR folks. And if you can, consider signing up to whatever type of plan is being offered.

A pension, and your retirement, is never top of mind until you get within a few years of the actual last day at work/golden watch/retirement party. From that point forward, any workplace-related pension benefit will make life much easier for the future, retired you. It’s easy, especially when you are young, with many other things on your plate, to put off thinking about retirement.

So if there’s a workplace pension that you may be able to join, consider doing so. You really don’t want to regret not joining it 30 or 40 years from now.

And if you don’t have a plan at work, fear not. The Saskatchewan Pension Plan has all the pension infrastructure you need to build your own, do-it-yourself program. They’ve been helping people save for retirement for 35 years – 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.


Much more to financial knowledge than just understanding the lingo: Kevin Maynard of CFEE

October 28, 2021

While financial literacy is important, the real goal of financial education is to help Canadians leverage that knowledge to help boost their capability for career, financial and “enterprise” development.

So says Kevin Maynard, Vice President and Chief Operating Officer of the Canadian Foundation for Economic Education (CFEE). He spoke recently to Save with SPP via telephone.

CFEE, he explains, is “a national not-for-profit organization that operates in every province and territory.” CFEE programs are also offered in the U.S. and worldwide, he adds.

The organization was established back in 1974 with roots at the University of Toronto’s Ontario Institute for Studies in Education (OISE). CFEE has grown to be a leader in education as and independent non-profit organization.

“Our focus is our (educational) resources, programs and supports to Canadians,” explains Maynard, with the emphasis on helping build “confidence and competence.”

Financial literacy is a component of CFEE’s “pillars,” he explains.

“It’s not just about knowledge,” he explains. CFEE programs are designed to help Canadians leverage knowledge to make decisions, and boost their capabilities. CFEE’s four pillars, which are key to the design of its educational programs, include:

  • Career Development Capability
  • Financial Capability
  • Economic Capability
  • Enterprising Capability

The first pillar is to boost people’s abilities to find opportunities for work. The second looks at financial literacy, the third is about applying that financial knowledge to boost individual economic potential. The last pillar is about entrepreneurial education as a source of “income generation,” he explains.

COVID-19 has moved many of CFEE’s programs online. “Since January 2021 we have (presented) virtual workshops for more than 10,000 Canadians,” notes Maynard.

“It’s all about understanding supply and demand,” he says. As an example, when thinking of a career choice, are you aware of skill sets that are in demand, he asks. Are you looking for a job that offers security? He says CFEE education programs focus on separating individual “wants and needs” from clear choices around decision making.

Thanks to the support of partners in the financial sector, CFEE is offering programs for free across the country. Programs are delivered through a “network of stakeholders,” he says, which includes parents, teachers, community-based organizations, newcomer groups, senior groups, and many more.

As an example, CFEE senior workshops are held across Canada at senior centres, recreation centres and now, “virtually” due to the pandemic.

The programs make sure seniors are ready for “the life events that they may face in their golden years.” It’s more, he says, than just knowing the numbers about the Canada Pension Plan and Old Age Security. “It’s knowing what you want to achieve, and how to go about doing that,” he says. Seniors, he adds, may find themselves “transitioning into another form of accommodation” during their latter years, a move that can have “cognitive, spiritual and emotional aspects.”

A local group that has participated in CFEE programs is the Saskatchewan Council on Aging (SCOA) Hub Club.

And seniors need to pay attention to their physical health as they age. Will changing physical health become “important to you in terms of where you live… will you have to make changes in one to three years, or five years out, due to (declining) physical and cognitive abilities?”

So a senior’s budget needs to take those potential changes into account, since unexpected changes can bring an unpleasant financial surprise.

Financial education needs to be targeted to the needs of those receiving it, Maynard explains. “It’s very much a point in time thing. There’s no real use in teaching a 12-year-old about RRSPs,” he says. “The focus has to be on life events that are relevant for the target group.”

Sixteen targeted programs can be found on the CFEE website, as well as links to print, video and web-based resources. The “News” section covers such topics as helping to control “in-app” purchases by kids, fintech for younger people, financial literacy research and news about math skills and how they relate to job searches.

With targeting in mind, CFEE is working on new resources targeted for seniors, including an online seniors’ education program with modules focused on challenges faced by seniors. Another new program targeted at seniors aims to equip them with tools to begin discussions with their adult children about end of life planning. Other resources include Money and Youth – a student’s guide was developed in the mid 90s which has since evolved with a teacher’s resource component and a parent’s guide – to help people educate their kids.

As November is financial education month, Maynard notes the importance of older adults “to have conversations with their older children about subjects like powers of attorney and why they are important, wills, executors, funerals and burials.”

We thank Kevin Maynard and CFEE for taking the time to talk with us.

He’s certainly right about the need for seniors to have flexible budgets. Having had both parents find themselves living out their last years in long-term care, we understand how the cost of living can suddenly change radically.

Having a good retirement plan in place will add to your flexibility in coping with the ups and downs of your golden years. If you have a pension plan or retirement savings arrangement through work, be sure you are taking full advantage of it. If you don’t, and are wondering how to save for retirement on your own, the Saskatchewan Pension Plan, celebrating 35 years of operation, has all the tools you need for a do-it-yourself retirement system. 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.


Oct 25: BEST FROM THE BLOGOSPHERE

October 25, 2021

Will pandemic debts impact Canadians’ retirement plans?

New research from the Canadian Institute of Actuaries (CIA, and no, not that CIA) suggests that many Canadians worry that debt taken on during the pandemic will delay – or indefinitely postpone – their plans for retirement.

The research, carried out by Ipsos Public Affairs, is covered in a recent story in the Toronto Sun.

The research found that “with Canadians earning less” during the pandemic, “increases in debt followed suit,” the newspaper reports, quoting another media outlet, Blacklock’s Reporter.

“The report reveals 25 per cent of respondents took on additional debt due to the pandemic with higher percentages seen among students and self-employed Canadians, both at 33 per cent. Also exposed were those who rent, 34 per cent,” the article notes.

How much did incomes drop during the pandemic?

According to the Sun story, citing the research, one third of the 1,529 people questioned by Ipsos reported a pandemic-related income drop. A further 69 per cent say “COVID has changed their retirement timelines.”

While the average retirement age, according to Statistics Canada, is 65, the research found that 40 per cent of those surveyed “do not know when they will retire, and a further 14 per cent state they do not expect to ever retire,” the Sun reports. Four per cent of those surveyed said they expect they will have to work beyond age 71, the article adds.

The article points out that the large percentage of “don’t know” answers to when retirement will occur “reflects the fact some Canadians are not engaged in work outside the home.” The largest segment of those polled saying they didn’t know when they would retire are “students (65 per cent), homemakers (69 per cent) and those who are disabled (62 per cent),” the article notes.

The article concludes by indicating that CIA estimates the average Canadian needs $900,000 worth of savings to retire by age 65.

These conclusions are interesting, particularly since other research has found that some Canadians have been saving like crazy during the pandemic, due to having less things they can spend their money on.

The Globe and Mail reports that “Canada’s stockpile of savings earlier this year was $280 billion bigger than before the pandemic,” citing research from RBC Economics.

It’s not known, the article adds, what Canadians plan to do with this cash stockpile. Retirement savings is not mentioned specifically as a destination for this cash, at least in this article.

So, some of us are having to borrow to make ends meet, while others are sitting on a pile of cash.

Those with extra cash should take note of the struggles of those without it. The folks that are pushing retirement into the future are doing so because (we can assume) they are carrying too much debt and thus not putting as much away for retirement as they would like. These folks will have to get back into retirement saving when they can, but understandably they can’t do much at this point.

If you are sitting on cash, consider putting at least some of it away for retirement. This is especially important if you don’t have a retirement savings plan at your place of work. Folks in this situation have to rely on themselves to fund their future retirement income.

Don’t have a plan at work? Consider the Saskatchewan Pension Plan, a “made in Saskatchewan success story” that has been helping people save for retirement for 35 years. SPP can take your hard-earned savings and invest them for you in a low-cast, professional way. Better, when it’s time to finally exit the stressful world of work, SPP can turn your invested savings into a stream of income. 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.


Retirement Heaven or Hell focuses on sense rather than dollars

October 21, 2021

One of the nagging questions we had during the countdown to retirement seven years ago was this – what is retirement going to be like?  And while retired friends and neighbours smiled and said cryptic things like “you’ll never know how you found the time for work,” we wondered – still – how the transition from full time work to freelancing would go.

This is the sort of territory covered in Mike Drak’s terrific new book, Retirement Heaven or Hell.

He starts by recalling that, as a child, he really couldn’t answer the question “what do you want to do with the rest of your life.” Retirement provides a second chance to give that response, he writes.

“It’s hard to enjoy retirement when you are not doing what you like to do,” he continues. Living someone else’s retirement dream is your ticket to what Drak calls “Retirement Hell.”

So what does Retirement Heaven look like?  There are “comfort-oriented retirees” who “like to have a safe, ordinary retirement,” he explains. They are content with a “full-stop” retirement, they don’t want to work, and some have accumulated “a great deal of money.”  Then there are “growth-oriented retirees” who Drak sees as “retirement rebels – the people who have a strong inner voice constantly telling them to never be satisfied; to keep stretching, exploring, learning and experiencing.”  Either stream works “as long as you are happy and doing things that are meaningful and fulfilling to you,” Drak explains.

Drak writes about the danger of “the Big Retirement Dip” that can happen after you have enjoyed “the Honeymoon Stage” of retirement, and have travelled, golfed more, visited the grandkids, and ticked off all the boxes of your to-do list.  Retirees “often find that they need to find something else to do, and this is where the trouble starts. Without a bigger plan or a purpose, they start to slide down to Retirement Hell, the lowest point in the Big Retirement Dip,” Drak writes.

This is particularly true of growth-oriented retirees; some comfort-oriented retirees “will be able to remain happily in the Honeymoon Stage for their entire retirement,” despite possibly having less meaning to their lives than the growth-oriented folks, Drak notes.

Drak adds that “significant change is an inevitable fact of retirement. How you choose to prepare for it and respond to it will determine if you will be happy or not.”  He encourages retirees to take up “new routines” such as regular meditation, and journaling, which he sees as the creation of a book “by you, about you” that will help you chart your progress towards your goals.  A daily log helps you determine if your day “was productive… or not,” helps you stay “on track with your goals,” and gives tips on how to improve things “going forward.”

The meat of the book is Drak’s list of “Nine Principles for an Exceptional Retirement.” These include:

  1. Nurture Strong Relationships
  2. Foster Good Health
  3. Achieve Financial Independence
  4. Reignite Your Sense of Adventure
  5. Tap into Your Spirituality
  6. Find Your Tribes
  7. Make the Most of Your Time
  8. Adopt the Right Attitude
  9. Discover Your Purpose

Drak covers each of these ideas in great detail, with “self reflection” questions on each topic as well as “simple truths,” a sort of Coles notes summary of the section.  He warns us, when talking about nurturing strong relationships, that loneliness “is an emotional problem with a physical consequence that could lead to an early death.”  Regarding health, he notes that “exercising and eating right are key anti-aging strategies,” the “magic pill” we look for.

On Financial Independence, he observes that “working longer reduces the risk of market declines and of not having enough money.” Thinking about our sense of adventure, Drak writes that “life is either a daring adventure or boring… playing it safe is a gamble too.”  Spirituality “helps you deal with the ups and downs of everyday life,” and having a “tribe” of like-minded people permits you to be on a “shared mission with people you respect and care about.” He covers all nine principles with similar aplomb.

Near the end of the book, Drak challenges us to “watch the movie of your own life…(to) take you back on your journey since childhood. This will remind you about what made you happy, which in turn will help you to discover your purpose(s) and passions, and ultimately, the person you were meant to be.”

And this is a core message of the book – no one can tell you what your retirement should be except for you, and this decision depends on your values. “Values are who you are even when no one is watching,” Drak explains. “Putting your values first influences your decisions; and how you choose to act and behave will ultimately determine your sense of happiness and fulfilment in life.”

This is a great book, almost a retirement philosophy text, and is well worth a read, whether you are planning your retirement or – even more importantly – if you have reached the end of the honeymoon stage and can’t think of what to do next. The book gives you the tools you need to get there.

The non-philosophical side of the retirement equation – income – plays the important role of helping to fund the retirement you want. If, lacking a workplace retirement program, you are saving on your own for those future challenges and adventures, why not put the Saskatchewan Pension Plan to work for you? They’ve been delivering retirement security since their inception 35 years ago.

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.