Jul 15: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

Women have to plan for a longer retirement

What works for a man may not work for a woman, and that sentiment is true when it comes to retirement planning.

According to the Young and Thrifty blog, women need “to know how to save more than men.”

They need to save more than the conventional 10 per cent of salary, the post notes, or else they could risk not having enough money in retirement. “Advice given to women about how much to save for retirement may be so far off base that, according to the Broadbent Institute, 28 per cent of senior women are currently living in poverty in Canada,” the article notes.

The article notes that as a starting point, women earn less than men, about 87 cents for every dollar earned by a man. That means less to save for retirement, the blog notes.

Secondly, women “tend to invest more conservatively than men,” the article advises. Women, the article notes, tend to shy away from riskier market investments in favour of GICs and high-interest savings accounts. “While these can be great short-term strategies, these investments offer a lower return, stunting the growth of the money over the long term,” the blog reports.

So the problem is that women “are earning less, saving less, and generally choosing investment strategies that yield less,” the article notes. “But because women generally live longer than men, they need to squirrel away more money in their nest egg.”

The article notes that women tend to live four years longer than men, meaning a more expensive retirement. “Four years longer doesn’t seem that long, but if you assume a retirement age of 65, that’s 28 per cent more years spent in retirement,” the article warns.

A final factor – women tend to leave the workforce to raise children, meaning they don’t have as long a career or as many opportunities to save, the article says.

What to do?

The article advises women to consider sharing some of their parental leave time with their spouses, so that they aren’t off work as much. If you are off on a leave, a spouse can open a spousal RRSP to ensure that retirement savings continues while you are caring for a child. The article urges “more aggressive investments” by women, including the use of exchange-traded funds or ETFs, so that you are getting more benefit from the stock market.

And finally, the article says the savings target for women should be 18 per cent of income, as opposed to 10 per cent for men.

Interestingly, the Saskatchewan Pension Plan was invented with women in mind. The SPP started out as a way for busy women and moms to have their own way to save. The SPP offers professional investing at a very low cost, is scaleable (you can put more in when you make more, and less in when you make less) and very importantly, offers a simple way to turn those savings into reliable monthly lifetime income when you leave the workforce.

It’s an ideal tool for women who want to upgrade their retirement savings – 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, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22

New Canadian Leadership Congress helps pension leaders with “the challenge of change”

There’s a new organization out there aiming to help bring pension leaders up to speed on some emerging issues – societal, economic, and environmental – that are having new impacts on the way retirement savings programs are run.

Save with SPP spoke with Caroline Cakebread, founder of the new Canadian Leadership Congress, about what the new group hopes to achieve.

Cakebread, a veteran financial journalist who edited Canadian Investment Review for more than 15 years, says the Congress is designed to fill an information gap here in Canada. “We wanted to do something different, some things that haven’t been done much in Canada,” she explains. The group, she adds, will bring pension CEOs and CIOs together for “intimate conversations” about emerging issues, like geopolitical risks, the pros and cons of emerging markets, and environmental impacts on investing. The Congress’ focus is strategic, she explains.

Other key issues the Congress will be looking at with leaders include the growing role of technology, diversity and leadership, and the overall “very uncertain investment environment.”

The Congress held its first major session in Montreal early in June. The format, she says, features speakers, panels, “congressional huddles” and lots of opportunity for networking. A goal, she says, is to connect the pension leaders with experts in a format that encourages free and open discussion, and lots of talk around the table. A number of comments from participants and speakers were made available on Twitter, notes Cakebread. 

The educational outreach the Congress provides is a new approach, Cakebread says, and one that many pension leaders had privately told her is not currently available in Canada. As well, rather than targeting one type of pension organization, the Congress is “more available” to a wider range of plan types. While all of the plans represented are fairly large, some are defined benefit, some are defined contribution, some offer both types, and so on.

While there is a lot out there for pension leaders in terms of educational conferences, there is less for executives who are at a “deal maker” level when it comes to decision making, she says. She’s hoping that the new Congress will meet that need.

Cakebread says that during her time in the pension industry, the public’s interest has really begun to grow. “When I started out, as editor of a pension publication years ago, in the early 2000s, pensions were considered a dull topic,” she says. But now, as the boomer population ages and people begin to grasp the significance of pension income and retirement security, “pensions are cool,” she says with a smile.

If you’re interested in finding out what the Congress is up to, be sure to follow them on Twitter, the handle is @CLCongress. We thank Caroline Cakebread for taking the time to speak with us.

It’s true that pensions were a pretty dull topic in the early 2000s, but the growing retiree population in the intervening years has indeed make retirement security “cool.” The general decline in the number of workplaces offering plans means many of us will need to save on our own. If you’re in that number, a great resource is the Saskatchewan Pension Plan. 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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Jul 8: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

Caring for parents hits retirement savings bottom line

New research has found that 14 per cent of Canadians with a living parent “are expecting the impact of helping their parents financially will mean delaying their own retirement,” reports Wealth Professional.

A further 12 per cent say caring for parents will prevent them from paying off debt, the magazine notes, citing research carried out by Leger for FP Canada and Chartwell Retirement Residences.

Other fears connected with parental care include having to take time off work to look after parents (a concern for 13 per cent of respondents), or having to quit work entirely to provide care (a fear for five per cent of those surveyed), the magazine reports.

For sure, having a parent who develops a serious illness and can’t live on their own anymore can throw a wrench in any plan. Is there much that can be done about it?

According to Sharon Henderson, VP of Marketing & Communications for Chartwell, an important thing to do is to talk with the parents about the possibility of a future health downturn.

“One of the biggest concerns we see in retirement living is the avoidance of financial conversations between adult children and their senior parents. This can create uncertainty and prevent proactive planning for support later in life,” she states in the article.

It’s important to go over the potential costs of long-term care, and to be aware of what measures the parents have put in place to help pay for it, the article advises. As well, there are tax credits available if you are acting as a caregiver, the article notes.

As Kelley Keehn of FP Canada notes in the article, “the senior years can be financially challenging, and as a result, many older Canadians turn to family members for support. That can cause a significant financial strain, and as Canadians live longer, that strain will only grow.”

Some great things about retirement

While it’s a safe bet that no one’s retirement will be completely smooth sailing, there are good things about it that we must not lose sight of, reports US News and World Report.

For starters, “a weight is lifted from your shoulders when you quit the rat race,” the article notes. There’s more time for movies and TV. You can try new things, join new clubs, and meet new people. And if you miss the routine of working, you can still do it part-time, the article suggests. There’s loads more time for family and friends, and to “give back” via volunteering, the article notes.

Other ideas include travel, enjoying the “time to do nothing,” and generally doing what you want instead of what others want you to do, the article concludes.

Whether it’s caring for a relative or doing your own thing, retirement is a time of life where you’ll appreciate having money. Sure the government provides some, but if you don’t have a workplace pension, or you want to supplement what it provides, consider saving on your own via the Saskatchewan Pension Plan. You can start small, you can ramp up your contributions as your income increases, and when it’s time to collect your savings you can receive it as a lifetime monthly pension. 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, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22

Book offers inspiring tune-up for mind and attitude re retirement

Many books about retirement focus on finances, others on health, wellness, and attitude. But Eric Thurman’s Thrive in Retirement provides a holistic owner’s manual to help get your mind, your soul and your attitude on the right path.

“Retirement,” he writes, “is no longer a short pause between work and the grave. It is now a long, major stage of life, because never before in human history have so many people lived decades beyond their working years.”

He looks at the five vital parts of life, which are “mind, body, relationships, soul, and finances.” The book uses these five things as a sort of lens through which to view your retirement activities and progress.

He also notes that the “three secrets of happiness” are “purpose, pleasure, and peace.” These ideas should also guide you, Thurman recommends.

Having a purpose in life, he notes, citing research from the English Longitudinal Study of Aging, “is associated with increased survival.” The study found that 29.3 per cent of people “in the lowest wellbeing quartile” died within 8.5 years (of retirement);” that compares to just 9.3 per cent in the highest wellbeing quartile. Thurman calls this “compellingly good news,” noting that “you can be happier and live longer if you wake up each morning enthused about the importance of how you will spend your day.”

He expands on this idea. “Recall the five parts of your life: mind, body, relationship, soul and finances. Don’t settle for any of them being deficient or, worse yet, sources of pain. Pursue emotional freedom.”

Your mind will thrive if you “free it from emotional pain” by letting go of minor things that bother you; you then need to keep it active through learning, through hobbies and activities, and even through part-time work, the book notes.

For one’s body, consider where you are on this scale – at the topic is “physically elite,” followed by “physically fit, physically independent, physically frail and physically dependent.” You need to try and be as high up on that scale as you can. He quotes the Quebec marathon runner Jacqueline Gareau as saying strategy must be employed in fitness – “it is not age, it is not diet. It is the will to succeed.”

In the chapter “Make Peace with Money,” Thurman advises us to “clarify our dreams” about money and importantly, to “control your money or it will control you.” He writes that we should “always view money as something you should put to good use and treat with respect. Never love the money and possessions you have. Never love money you don’t have. Never let money own you.”

Debt, he notes, should be treated “like a disease.” Avoid catching it, but if you do, “work to get over it as quickly as possible.” Overspending, he writes, “is always harmful” and credit card debt “ruinous.”

This well-written and motivational book ends with this bit of advice. “Think about how you want the story of your life to close. It won’t be a great ending if you drift passively, letting the river push you wherever it wishes. Instead, choose to steer towards happiness; do some paddling and raise your sail.”

It’s true that debt is the slayer of retirement dreams. One reason may be that paying off debt prevents people from saving for retirement, which in turn leads to less retirement income or a later retirement date. You can fight back by saving on your own for life after work; the earlier you start, the better it will be. And a great tool to use in that effort is the Saskatchewan Pension Plan.

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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22