Retirement needs a map, just as travelling needs a GPS: The Art of Retirement

September 21, 2023

For any of us, at any age, who are thinking about retirement, The Art of Retirement by Anthony Gordon is a must-have retirement reference book.

The book begins by helping us reframe our relationship with our finances. Perhaps, the book suggests, quoting noted economist Moshe Milevsky, we need to think of ourselves as a corporation — “You Inc.”

In that role, your goal would be “to maximize your company’s value while minimizing the risks faced by your corporation… to take the long-term view when making financial decisions.”

After a discussion of the “Rule of 72,” the idea that “72 divided by the interest rate approximately determines how long it takes for your money to double,” Gordon notes that the earlier we start saving, the best. “You need to start saving and investing as soon as you get the chance,” he writes. “If you do not, you will not get the full benefit of compound interest and the Rule of 72, so missing a year has a significant impact in the long run.” Think of your early investment “as a small snowball that gradually grows,” so long as you get the ball rolling.

He quotes the great Albert Einstein as once saying “he who understands interest, earns it; he who doesn’t, pays it.”

Gordon advises that as you save for retirement, you want to “keep track of your debt. If you ignore debt, you will not be on track for your retirement even if you have a lot of investments.” Compound interest works against you when it’s being applied to debt, he warns.

Writing about retirement income planning, he advises us all to find out what your “guaranteed income streams” are going to be — this can be Canada Pension Plan (CPP), Old Age Security (OAS), the Guaranteed Income Supplement,” or income from an annuity.

Then you need to think about how much you will need to withdraw from other personal savings — registered retirement savings plans (RRSPs) or Tax Free Savings Accounts (TFSAs). Next, look into ways to minimize taxes — then, you will have a picture of your future retirement income.

If you are running your own investments, be aware that “as humans, our erratic emotions and actions are rooted in psychological forces that drive most of the poor results that investors experience in the market,” Gordon writes. Quoting legendary investor Warren Buffett, he writes that “to invest successfully over a lifetime does not require a stratospheric IQ, unusual business insight or inside information. What is needed is a sound intellectual framework for decisions and the ability to keep emotions from corroding the framework.”

A key tool in developing such a framework, he writes, is having a financial plan.

Such a plan, he continues, should list all assets and liabilities, establish written goals based on “your values and your vision,” and should detail how much you will need “now, five and 10 years from now, as well as in retirement. Plan for inflation and taxes,” he writes.

Use the plan to decrease expenses, and to become fully aware of your monthly cash flow needs. You should look for ways “to reduce or defer income taxes where possible,” and plan your estate, including “wills, powers of attorney, and life insurance.”

Review your plan at least once a year — keep a copy of it handy if you are working with investment or legal professionals, he writes.

Other interesting discussions in this well-written book include a section on how to take advantage of a TFSA when you are retired.

Money invested in a TFSA, and later withdrawn, has no impact on your eligibility for “federal income-tested benefits.” A TFSA passes tax free to your estate, and you can contribute to a TFSA well past age 71 when you are fully retired, he writes. “Overall, the TFSA is a great tool that will allow you to better manage your taxable income so you do not have to withdraw additional funds from your registered retirement income fund (RRIF),” he writes.

In a chapter devoted to minimizing taxation, he talks about CPP splitting and pension income splitting, and some of the tax benefits an annuity can provide.

While noting annuities aren’t for everyone, Gordon writes that they provide a guaranteed payment for life and usually provides “a much higher rate of return than if you had received money from a guaranteed income certificate.” The book concludes with a detailed look at estate planning and the importance of having a will.

Once you are actually retired, you will notice that some fellow retirees are managing better than others. This probably isn’t by fluke. The ones who travel the most, or have cabins or campers, are almost certainly the ones who put some thought into what retirement would look like many years earlier. The rest of the gang have to manage on what they’ve got to live on.

If you don’t have a pension plan through work, don’t worry — the Saskatchewan Pension Plan is open to all Canadians with RRSP room. You can decide how much to contribute, and they’ll look after the heavy lifting of investing. At retirement, SPP offers the option of a lifetime annuity — a monthly payment you’ll get for the rest of your life — to help make your retirement income predictable and secure. Check out SPP today.

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Written by Martin Biefer

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


September 18, 2023

We’re living longer, but not healthier — and may face costly care in our latter years

Writing in The Globe and Mail, columnist Rob Carrick reveals that our future cost of care — once we’re all elderly — could average about $3,500 per month.

Retirement savers, he writes, already have to consider “high interest rates and inflation” when predicting future costs. “Now comes one more complication: we’re living longer, but not healthier,” he writes.

So long-term care costs may be something many of us will be dealing with in the latter phases of life, and Carrick says it can be a pretty considerable expense.

“Health issues can be managed so that you have a good quality of life, but the expense is potentially massive. Reckoning with this cost is best done in the retirement planning stage as opposed to your 80s or 90s, when your options are more limited. You need to answer this question before you retire: If I need extensive care in retirement, how will I afford it,” he writes.

The two options, which the article notes are covered off in a new report from the Bank of Nova Scotia, are basically “aging in place,” at home with help, or moving to a long-term care facility if and when the need arises.

Carrick notes that while he now sees “happy 100th birthday cards” in card shops, and that financial planners tell him they are seeing more and more clients in the 90-100 year age range, those extra years of life are not always healthy ones.

“What’s less understood about longer lifespans is that some of our latter years could well be spent in poor health. Life expectancy for the average 65-year-old today is 21 years, with full health for just 15 of them,” he writes.

Three quarters of us aged 65 or older “have at least one major chronic disease, while one-third have multiple conditions,” the article continues. “More than 80 per cent of seniors at age 85 suffer from hypertension, over half from osteoarthritis, and one-quarter from dementia,” he continues.

These conditions can mean you’ll need help “to perform six aspects of daily living — bathing, dressing, eating, toileting, continence and being able to walk or transfer yourself from a bed to a wheelchair,” the article adds. That’s where the costs begin to rise.

“Light home care of five hours per week might be covered by provincial governments, whereas 22 hours per week might cost $3,500 a month. According to the Canadian Medical Association, 22 hours of home care per week is consistent with keeping people at home rather than a long-term care home. For continuous home care, the price could be close to $30,000 per month,” he writes.

We can add from personal experience that long-term care costs were around $5,000 per month when our late mom needed it.

How to fund that sort of cost, which might be needed for five or six years?

“If you don’t have the savings to cover care costs, your options include downsizing your home to pry loose some equity, or borrowing against your home value using a home equity line of credit or a reverse mortgage. Long-term care insurance bought before retirement is another possibility, but this type of coverage has not caught on,” the article notes.

In any case, future long-term care costs should be part and parcel of your overall retirement savings plan, the article concludes.

This is an eye-opening and alarming article. The implication is that maybe your retirement costs will actually increase, and that will happen at post-85, when you have very few options to deal with it. A takeaway from this piece, for us at least, is to never stop saving for the future.

If you don’t have a workplace pension arrangement, and are saving on your own for retirement, you may be interested to learn about the Saskatchewan Pension Plan. SPP has been helping Canadians save for retirement for over 35 years. SPP offers a voluntary defined contribution plan that any Canuck with registered retirement savings plan room can join. You decide what to contribute, and SPP invests it for you in a pooled fund with a great track record and low-cost professional management. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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

Set it and forget it — how to automate your savings

September 14, 2023

For many of us, retirement savings is something that — if we think about it at all — we worry about chiefly right ahead of the registered retirement savings plan deadline in March.

But there’s a school of thought that suggests automating your savings, rather than scraping up a lump sum at the last possible minute, is the way to go. Save with SPP took a look at what others are saying about this important topic.

At the Young and the Invested blog, automated savings is defined as “savings that happen passively — that is, without you having to do something every time you save.”

Through automated saving, the blog continues, “a predetermined sum of money is automatically transferred into a savings account or similar financial vehicle.” This happens on a recurring cycle, the article adds, typically “monthly, or every paycheque.”

So — how to do this? The article suggests that if all of your pay is deposited in your chequing account, you can set up — via online banking or a banking app — a regular transfer of some of that money to your savings account.

An article in Forbes Advisor continues that thinking, and advises that you make sure the savings account you choose offers high interest.

“To maximize your savings, choose one of the best high-interest savings accounts, which offer rates that are 10 times higher than the national average. Consider switching banks if your current account doesn’t pay much interest. Online banks often have the most attractive interest rates,” the article notes.

Another idea in the Forbes piece is the concept of boosting savings when you are cutting expenses. Say what, now?

“If you decide to make some cuts to your monthly spending, it’s important that you actually follow through with putting that extra money in savings. You can do this by increasing automatic transfers to your savings by the amount you plan to cut from your spending,” the article explains.

Now we get it. If you cut back on cable or a streaming app or two, don’t just spend that “saved” money — boost the amount you are transferring each month into savings.

The article also reminds us that when we get a raise, our monthly savings should get a raise too.

The U.S. articles mention the idea of using apps that “round up” spending, directing a portion of what you are buying into savings.

One such app, reports the Money Reverie blog, is called Moka (formerly Mylo).

The Moka app, reports the blog, connects to your savings account, and then does a little rounding up.

“For example, if you buy a cup of coffee for $3.25 with your credit card. The Moka app rounds up your purchase to $4.00 and saves the extra $0.75 in your Moka account. If you order that coffee everyday for one year, that’s $273.75 you have saved up. Your money would be automatically transferred from your chosen funding account to your Moka account,” the article explains.

We’re sure there are many other such “fintech” apps to choose from, but the idea of “rounding up” to save seems to be a good one.

If you’re a member of the Saskatchewan Pension Plan you can automate your savings in one of two ways. You can set up pre-authorized contributions to SPP from your bank account, or you can set up SPP as a “bill” via your online banking app and make automated bill payments to your future you. Automating savings means setting it and forgetting it — you can let SPP invest your savings for your future. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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


September 11, 2023

Handy tool takes some of the guesswork out of retirement planning

There are some tricky obstacles facing us when it’s time to figure out how to live on our retirement savings.

The Daily Hive recently reported on a new calculator put in place by the federal government to help Canadians better understand the multiple streams of money that may make up their future retirement income.

“The Retirement Hub provides a clearer picture of your options and how to plan for them,” the publication reports.

“The hub features a retirement income calculator, which includes the Old Age Security (OAS) pension and Canada Pension Plan (CPP) benefits. The calculator takes you through several steps to determine everything” The Daily Hive tells us.

“First, you must enter your gender, birthday, and annual income from all sources before tax. Then you’ll be asked to set an annual retirement goal income (before tax) in today’s dollars,” the publication advises.

The folks at The Daily Hive tried plugging in numbers for someone who is age 31, and making $60,000.

That person would receive a future retirement income of $27,000 to $46,000 by age 70, the article notes.

The calculated amount factors in things like your personal savings, any workplace pension plan you may belong to, money in a registered retirement savings plan, and so on.

It also blends in your future CPP and OAS benefits (and, if application Quebec Pension Plan benefits) into the overall retirement income picture, the publication adds.

“If you’re not sure if you’re ready for retirement or want extra assistance with planning, there’s also a quiz you can take, which provides a checklist of tips to help you with your plan,” the Daily Hive concludes.

The Saskatchewan Pension Plan also has some built in tools to help you with retirement planning.

The Wealth Calculator provides a nice, fast estimate of where your SPP will be when you are ready to collect. Have a look at your latest balance, via your statement or through MySPP, then estimate how much you plan to add to the plan until you retire. You can estimate how much you think your savings will grow, and then voila — there’s a rough estimate of what you’ll have when it’s time to collect.

MySPP is also a great resource. You can sign up by clicking here. Once you are in, you can easily see your contributions to date and any investment returns applied each month. You can print off your contribution receipts, and upon retirement, your income tax documents, as well as view your statements — and you can keep your contact information up to date.

These tools help you to demystify retirement — if you have a pretty good idea of what you will be receiving as income, that’s half the battle. The other half is figuring out what your future living costs will be.

Check out SPP today — if you don’t have a pension plan through work, or don’t want to invest on your own for retirement, SPP offers the expertise you need. We’ll grow your savings into future income via a low-cost, professionally managed pooled fund, and your income options will include the possibility of guaranteed monthly income through SPP’s line of annuities.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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

Retirees want steady income, fear running out of savings: CPPLC

September 7, 2023

New research commissioned by the Canadian Pension Plan Leadership Council (CPPLC) finds that Canadians want steady retirement income — and worry about running out of money in retirement.

We reached out to Alison McKay, who is the Co-Chair of the CPPLC, to ask a few questions about the findings.

The research suggests Canadians prefer plans that offered inflation-protected guaranteed income, and that fear of running out of money is a primary stress driver. While defined benefit (DB) style plans offer this sort of income you can’t run out of, defined contribution (DC) plans and registered retirement savings plans (RRSPs) don’t automatically do this. Should there be more awareness of the value of annuities in capital accumulation plans?

The stress many people feel planning for retirement underscores the need to enhance financial literacy among Canadians and raise awareness about their retirement planning options. Increasing costs of living and how to draw down on savings are two major challenges that retirees can better overcome with the right plan and planning. The research shows that promoting education, awareness, and incentives that highlight the value of retirement income options can improve retirement readiness, including options that offer a solution to safeguard against longevity risks if their workplace plan does not include such features.

It was encouraging to see the stat that a quarter of respondents rate retirement planning as an 8/10 factor when choosing careers. Does this mean that people are (finally) starting to focus on workplace retirement benefits as being as important as salary?

The research indicates that Canadians are considering their personal well-being in addition to traditional career-related factors, like salary, when making their career decisions and choosing employers. Given the potential impact of retirement planning stress on personal health, Canadians may view workplace pension plans as a benefit that serves their financial savings and well-being goals. It is notable that in both surveys, Canadians highly rated plans that provide predictable and monthly income, that is guaranteed to be paid for life, and that has inflation protection.

Is the fear of running out of money in retirement (hence the desire by so many for the lifetime, inflation protected monthly pensions) driven by the lack of independence this might create – such as having to downsize or rent unexpectedly, or depend on friends and family for financial help?

Canadians consistently rated “running out of money once retired” (47 per cent) as their biggest retirement savings stress. The next top concerns were consistently “being dependent on family once retired” (38 per cent) and “being dependent on social programs once retired” (34 per cent). This aligns with your suggestion that a lack of independence may drive some Canadians’ retirement planning stress.

We also see that Canadians express a strong desire for predictable, lifetime guaranteed income that is inflation-adjusted, while also placing priority on maintaining of their standard of living during retirement. However, the report highlights a significant gap in retirement income coverage, with only 29 per cent of Canadians feeling confident about retiring at their desired age and maintaining their desired standard of living.

Making a significant change like unexpectedly needing to move or depend on family can be a stressful situation at any point in a person’s life; it’s more stressful when you’re not earning a wage or salary, as in the case of retirees. The report emphasizes the importance of expanding retirement income coverage in Canada to address the concerns of Canadians and enhance overall retirement preparedness to achieve retirement goals and secure financial well-being during retirement.

The study’s results suggest that people are dipping into their retirement savings due to factors like higher prices, and as well, taking on more debt than usual. Are these the chief reasons that those without workplace pensions aren’t able to save for retirement?

Canadians have lost confidence in retiring on-time and debt-free. While we have seen significant economic volatility in recent years, the low confidence is specifically affecting Canadians without access to a workplace pension. Only one-in-five feel confident in their ability to retire when they want and maintain their standard of living, compared to the one-in-three with access to a workplace pension who lack confidence about reaching the same goals.

The lack of confidence in managing their own retirement savings plans further highlights the need for workplace pension plans that help Canadians save efficiently and automatically. The study also found that Canadians consistently report they are not well informed about sources of retirement income. Expanding retirement income coverage in Canada and investing in financial literacy programs can contribute to improving retirement readiness for Canadians.

What finding surprised you the most from this research?

The survey presented a valuable opportunity to gauge Canadians’ sentiments regarding their finances and retirement plans. While the results are somewhat expected given the economic climate in 2022, a surprising finding is the effects of retirement-related stress on individuals and families.

Something that differentiates the survey from many others is that we specifically asked about stress related to retirement planning, not general financial stress. The study points out that stress, specifically about retirement, permeates various aspects of Canadians’ lives. Notably, the research reveals an increase in retirement-related stress from 2016 to 2022, impacting both Canadians’ personal health and career decisions.

Almost half of those surveyed (47 per cent ) reported that the stress of planning for retirement affects their health, at least moderately. Of that group, 28 per cent said that stress about retirement highly effects their personal health. As 60 per cent of Canadians do not have a workplace pension plan, these findings underscore the significance of addressing retirement planning concerns and the importance of expanding retirement income coverage in Canada.

We thank Alison McKay and CPPLC for taking the time to answer our questions!

If you don’t have a workplace savings program, and are relying on your own investment skills to save for retirement, you may want to take a look at the Saskatchewan Pension Plan. Open to any Canadian with RRSP room, SPP is a voluntary defined contribution plan featuring pooled investing at a low cost. You decide how much to contribute, and SPP looks after growing your savings until it’s time to turn them into income. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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


September 4, 2023

Annuities, buoyed by higher interest rates, regain their lustre

Thanks to today’s higher interest rates, an old staple of the retirement industry — the annuity — is making a big comeback.

Writing in The Globe and Mail, noted financial columnist Rob Carrick says annuities can be added to the “list of safe investments that have been revitalized by high interest rates.”

His article quotes insurance adviser Rino Racanelli as saying annuity sales “are 50 per cent higher than they were 18 months ago,” before the climb in rates. And, the Globe story continues, “financial planner Rona Birenbaum says she’s placing more money in annuities now than in the past, and she’s recommending annuities more often.”

Today’s higher interest rates have been good news for such savings tools as “savings accounts, guaranteed investment certificates, treasury bills, as well as annuities,” but the latter category has “a few other things going for them as well,” he writes.

“If you’re part of the wave of retiring baby boomers, they offer maintenance-free income that won’t demand your attention as you age. Annuities also offer refuge from the never-ending drama of stocks, bonds and everything else financial. Another benefit is the recent upgrade in the protection offered in case an insurance company selling annuities fails,” he writes.

For those who aren’t familiar with an annuity, Carrick offers up this explanation.

“Annuities are insurance contracts where the buyer exchanges a lump sum of money – as little as $25,000 or $50,000 – for a preset, guaranteed, lifelong stream of monthly income. According to Mr. Racanelli, a 65-year-old woman who bought a $100,000 non-registered annuity could receive as much as $6,386 per year, up 5.9 per cent from $6,032 12 months ago,” he writes.

Payouts today are about 20 per cent higher than they were only a few years ago, back in 2019, Carrick continues.

In the article, Naunidh Singh Hunjan of Hunjan Financial Group states that “this is really a special time when it comes to annuity rates,” and that he is seeing the best payouts from annuities that he has seen in years.

The article concludes by recommending that those converting savings into retirement income consider annuities for only some of their savings.

“Annuities should be considered only for a portion of your retirement savings,” writes Carrick. He notes that “Mr. Racanelli said his 65-year-old clients are typically putting 25 to 30 per cent of their savings in annuities, with older clients going as high as 50 per cent. Investments that are complementary to annuities include dividend growth stocks, which offset inflation with rising cash payouts to shareholders.”

Members of the Saskatchewan Pension Plan have the option of converting some or all of their savings into annuity income at retirement.

SPP’s Pension Guide explains the three annuity options in detail.

All three forms of annuity pay you income every month for as long as you live. With the life only option, payments stop upon your death, and there is nothing paid to your beneficiaries. With the refund life option, you get less monthly income, but a calculated death benefit is guaranteed to be paid to your beneficiaries. With the joint and last survivor annuity, your monthly annuity payments carry on (you can choose for your survivor to get 60, 80 or 100 per cent of what you were getting) for their lifetime.

Be sure to check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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

Money not the number one thing people link with retirement: fuse research

August 31, 2023

A new research paper from fuse strategy takes a fresh look at how Canadians react to retirement — and the findings are an eye-opener.

The paper begins by observing that while most of us are aware of the need to save for the future, we are not as sure about how to go about it. “This seemingly simple task is challenged by our human biases for clarity, certainty, and immediacy: how should we prepare? What will we need? How long will the future last,” the authors ask.

After researching the topic, fuse found that for most people, retirement is “invisible… not something we normally talk about.” It’s also seen as “boring and depressing… a time when we will be old and possibly unwell.” Retirement planning is seen as “complicated and confusing,” making it easier to “do nothing,” and retirement is finally seen as “less important than our current needs.”

The fuse study then asked 16 Canadians to shed more light on the meaning of retirement.

They described it, the report notes, as not so much an individualist thing, but “a collective achievement and experience,” to be shared with family and friends. It’s a time of “freedom and simplicity,” free of pressure from things like work, the report continues. It’s a time when “travel and self-determination are valued,” and is an aspirational period of time with respect to nature and the environment.

Somewhat surprisingly, retirement was not seen as being connected to financial assets.

“Retirement should not be seen as synonymous with the products designed to enable it, including pensions. None of our participants mentioned money in articulating the meaning of retirement, which is particularly notable given the clear framing of our study. When defining what matters to them about retirement, our participants simply did not think about the financial dimension of the experience,” the report notes.

Those who had positive views on retirement saw it as attainable and achievable, the report notes. Many of them reported they had a workplace pension plan.

For those who were negative about retirement, it was seen as something “that happens to them when they were compelled to stop working by health or circumstance.” This group had trouble with the idea of retirement involving a “conscious choice” to stop working.

The negative group had not had any experiences dealing with “knowledgeable financial guidance,” and “examples of retirement tended to be absent or negative for participants,” the report states. “Many participants considered retirement planning to be an impolite topic,” the report adds.

While workplace pension plans were generally seen as positive by those who were positive about retirement, the report states that more work needs to be done on this file.

“The role a workplace pension plan can play in providing confidence in retirement outcomes absolutely depends on how those retirement outcomes are defined – or, put another way, understanding what retirement really means to Canadians is critical to supporting it. There is a clear need to develop a more nuanced view of the meaning of retirement – and a clear opportunity to use this insight to strengthen and improve the value and impact of the workplace pension plan,” states the report.

Interestingly, participants were found to value pensions more when they were on the receiving end. “Pensions… were more fully appreciated in hindsight, and often understood as `free money’ from the employer,” the report notes. Younger participants stated they wanted to have “values-oriented outcomes” from the investment activity within their pension plans, ranging from responsible investing to clearly expressed organizational values, the report adds.

This interesting paper concludes by advising pension plans to do more to engage with their members and prospective members, through modernization, advocacy, and action.

If you lack a pension plan at work, don’t worry — you still have options for building retirement income. A great place to start is the Saskatchewan Pension Plan. Joining SPP means your savings are managed, along with those of more than 31,000 other members, in a pool investment fund value at more than $588 million as of Dec. 31, 2022; the annuity fund totalled a further $108.2 million. Costs are kept low, but experts guide the investing. At the end of the day, your savings will have grown — and the future, retired you will have options to pick from for turning savings into income, including the chance for a lifetime monthly annuity payment. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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


August 28, 2023

Private investing, common for institutions, is a mystery to individuals: IPSOS

A whopping 60 per cent of Canadians say they don’t know anything about private investments — common amongst institutional investors. And one in four surveyed think “they are missing out” on such investments.

A media release from B.C.-based Harbourfront Wealth Management shares the results of a poll it commissioned, which was carried out by IPSOS.

The private investments category, the release begins, accounts for “market capitalization double in size compared to the public market in various countries.” But despite “Canada’s large institutional involvement” with private investing, “and a track record of success in the space,” a “stark majority” of us have no knowledge of it whatsoever, the release continues.

Private investments “may include private lending, private equity, such as investing capital into companies that are not publicly traded, and private real estate, such as student housing, seniors living facilities, and infrastructure.”

Since this type of investing basically involves big institutional funds directly owning things, it hasn’t generally been something for individual investors to be able to take part it, the release says. But they do want in.

“Canadians need a broader toolkit, that includes private investments, to plan for their futures,” states Harbourfront’s Christine Tessier in the release. “The IPSOS study clearly demonstrates that among Canadians, a quarter feel their financial institution doesn’t give them access to all types of investment products. New technologies, combined with increased oversight, are changing the face of this industry,” she states.

The study found that 24 per cent of Canadians don’t feel they are getting full access to all investment products, and a further 27 per cent feel “they do not have access to every type of investment product they want.” Forty-two per cent, the release continues, say they would be willing to change financial institutions for such access, and 43 per cent would be willing to change advisors to do so.

The release cites the fact that the Ontario Teachers’ Pension Plan achieved a four per cent rate of return in 2022 in its private investments portfolio; the Canada Pension Plan Investment Board and Public Sector Pension (PSP) Investments are said to be investors in this space.

Harbourfront offers a range of pension-fund-like, “retail friendly” private investment products for individuals, the release concludes.

This is an interesting piece, because the fact that big pension funds and other institutions directly own things like office towers, airports, shopping malls, warehouses and the like is not well known. Private equity — where an institutional investors directly owns all or part of a non-trade private company — has also been around for years in the pension plan world. The Saskatchewan Pension Plan is also involved in private investments. As of Dec. 31, 2022, 18 per cent of SPP’s Balanced Fund was invested in infrastructure, 11 per cent in real estate, and 10 per cent in private debt. That means those of us who are members of SPP already have private investing at our fingertips! Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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

Learn from these retirement savings mistakes

August 24, 2023

While it’s never great to make a mistake, they have the interesting side effect of teaching you what not to do.

Save with SPP decided to hunt around for some tips on what not to do when it comes to saving for retirement.

According to the Espresso blog on MSN, there are a couple of retirement plans that can backfire on you.

Many who haven’t saved much for retirement plan to continue working past age 65. But, the article warns, your body may have other ideas. A StatsCan finding from 2002 was that 30 per cent of those who took early retirement did so “because of their health.”

If you are saving via an investment product that charges high fees, you may find those charges “can eat up huge amounts of your savings over time,” the article reports. Be careful and look for lower-fee options, the article advises.

A key tip is to get saving, even if you start late. “According to BNN Bloomberg, 32 per cent of Canadians approaching retirement don’t have any savings,” the article notes. “Anyone hoping to rely only on the Canada Pension Plan and Old Age Security will find it difficult to maintain a comfortable lifestyle in retirement, which is why middle-aged and older Canadians should start saving as early as possible,” the article concludes.

The Motley Fool blog offers up a few more ideas.

Be aware of your registered retirement savings plan (RRSP) limits, the blog warns — there can be penalties if you over-contribute.

If you are running your own money and wanting to think outside the box, don’t use your RRSP as the test bed, The Motley Fool warns. “You should test out your investment strategies in a non-registered account before investing in RRSPs. Apply your successful investment strategies in RRSPs because losses cannot be written off,” the blog suggests.

Other advice includes diversification — don’t go fixed-income only in an RRSP, because you’ll get more growth from equities, the blog advises.

Over on LinkedIn, Brent Misener, a certified financial planner, provides a few more ideas.

Don’t procrastinate on retirement saving, he notes. “The power of compounding is a significant advantage when it comes to saving and investing. Starting early allows your money to grow and work for you over an extended period. Take action now and harness the power of time to maximize your retirement nest egg,” he writes.

Have a handle on what your expenses will be after you retire, Misener writes. “Medical costs, housing, leisure activities, and unforeseen events can quickly deplete your savings if not accounted for,” he warns.

In a similar vein, he says you must not ignore the possible impacts of inflation. “Consider inflation as you plan for the future and ensure that your investments and savings can keep pace with rising prices. Consider how much everyday items like groceries and utilities have increased dramatically in the last two years,” he adds.

If you are among the fortunate few who have a workplace pension plan, don’t stop saving outside that plan, Misener states. “Whether it’s a defined benefit or defined contribution, it’s important to remember that your pension may not cover all of your spending needs. Most retirees plan on spending more in retirement and often work pensions may only cover basic expenses,” he concludes.

These are all good tips to be aware of.

If you don’t have a workplace pension plan, or you want to supplement the savings you are getting from one, have a look at the Saskatchewan Pension Plan. SPP is an open, voluntary defined contribution plan that will invest your money at a very low fee. Your savings will grow within SPP’s pooled investment fund, and when it’s time to retire, you have the option of a lifetime monthly annuity payment, so that you will never run out of money. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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


August 21, 2023

Financially independent seniors require less government help: Frazer Stark

Writing in the Financial Post, Frazer Stark notes that the “looming crisis” of baby boomer retirements — with those boomers living longer lives than their forbears — can be solved with a little more focus on self-reliance.

“Retirees,” he writes, “face uncertainty on multiple fronts: market returns, cost inflation and their own physical health. Yet it’s the unknown length of an individual’s ultimate lifespan that creates a labyrinthine financial planning challenge.”

“Consider that a 65-year-old woman entering retirement can expect to live on average to age 87,” he explains. “This average hides variability: she still has a 10-per-cent chance of living past 100, a one-per-cent chance of living past 105 and a tiny chance of reaching 110 or even beyond that (the oldest Canadian on record passed away at 117 years and 230 days). This variability makes determining how much to safely spend from her nest egg rather tricky,” he writes.

This danger of outliving one’s savings, he explains, can be handled several ways. You can “play it safe” and avoid drawing down your savings, he writes. But that carries the cost of “not fully enjoying these special retirement years while we can.”

You could also simply ignore the problem of living into your 90s and beyond by spending “freely as you set into retirement.” This can backfire, Stark adds, and your future you may suffer as a result of early heavy spending.

Defined benefit (DB) pension plans, Stark continues, offer a form of insurance against longevity, as such pensions are paid for life. Yet, he says, we “continue to steadily transition away from the DB pension structures that offered comfortable, confident retirements to previous generations.” Less than nine per cent of private-sector workers have DB plans today, compared to 50 per cent in the late 1970s, he notes.

Because such plans are so scarce in the private sector (they are more common in the public sector), Stark writes that “some… are giving up, viewing retirement as an unattainable goal.” Recent research has found that many have “curtailed saving,” rather than cutting back on today’s expenses to save for tomorrow, he continues.

As an example, he writes that the average price of a new car in 2022 hit more than $61,000, while in the same year, “59 per cent of Canadians said they were saving nothing for retirement, or little at all.”

Only a small percentage of Canadians insure themselves against running out of money in retirement via the use of lifetime annuities, he writes.

There has been progress in rolling out low-fee retirement savings programs (Stark mentions Wealthsimple), but “a similar evolution is now essential for the decumulation phase,” when saved retirement dollars are turned into income.

“Last year, the Organization for Economic Co-operation and Development (OECD) updated its pension-program guidelines, recommending that member countries provide their retired populations access to income-for-life options, including `by non-guaranteed arrangements where longevity risk is pooled among participants,’” Stark writes.

While work is being started by government and the financial sector on programs that address longevity risk for retirees, the path to this future “remains largely untrodden, and much work remains,” he continues.

Stark sees a solution in boosting “baseline education” about finances, and developing for Canadians “a set of tools to solve the decumulation problem for themselves.” This won’t be easy, will require a lot of innovation, but will be worth it, he predicts.

“Every Canadian who can comfortably navigate their own retirement finances is one less person requiring expensive subsidized care from the public purse, which must come from either increased taxes, additional borrowing or reduced spending elsewhere. The fourth option would be to simply not provide aid, creating tremendous suffering among our vulnerable elderly population and a stain on our national conscience,” he concludes.

This is a very well-written and detailed look at an insidious problem that tends to bite you in the backside when you are too old to deal with it — running out, or running low, on retirement income.

There is a way out of this for members of the Saskatchewan Pension Plan. SPP has you covered on the savings side — your contributed dollars are invested in a low-cost, expertly managed pooled fund. But SPP also has you covered at the drawdown stage. You can choose from a variety of SPP annuity options when you retire. All of them will provide you with an income supply that never runs out — a payment nestled in your bank account at the beginning of every month.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

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