Annuities can give your retirement income a strong, solid core

September 30, 2021

Financial planner Jonathan Kestle of the Ian C. Moyer Insurance Agency in Ingersoll, Ont. sees annuities as a great way to strengthen the core of your retirement income strategy.

Talking to Save with SPP by phone, Kestle says he sees annuities as “one of our core planning philosophies.” He notes that while the Canada Pension Plan (CPP) and Old Age Security (OAS) may provide a “foundation for retirement,” people should look at their fixed expenses in retirement.

If CPP and OAS don’t cover off those month-to-month expenses like housing, heat, telephone, and utilities, then a good strategy would be to annuitize some of your personal savings to top that up.  CPP, OAS and an annuity will offer a “cash for life” core income amount that will cover off your basic expenses, he explains. Your other savings provide you with liquidity for “non-core” expenses.

Asked if an annuity offers any tax advantages over withdrawing money from a registered retirement income fund (RRIF), Kestle said not really, since both will have tax withheld at source. On the other hand, a non-registered annuity (an annuity purchased with non-registered funds) can offer significant tax advantages, since tax is set at a fixed rate over many years, he says.

The advantages of an annuity include the fact that “longevity risk,” or the fear of outliving your savings in retirement, is covered off, since an annuity is a “cash for life” product.

Put in perspective, Kestle explains that with a RRIF, you can arrange to have a set amount of money withdrawn each month, like an annuity. The difference is that with the RRIF, if investment returns don’t support the rate of withdrawal over time, you can run out of money while you are still alive. With an annuity, you can’t outlive your savings, he explains.

It’s important to realize, he says, that once you purchase an annuity, you lose control over that money in exchange for receiving guaranteed monthly payments. If you die at an early age, and don’t select an annuity that offers a survivor benefit, your “foregone” payments are used to help provide payments to other annuitants by the insurer via a “pooled risk” approach, he says.

This fear of dying early keeps some people on the sidelines with annuities, but statistically it is quite a rare thing, with most people living into their 80s and beyond, he says.

But if you are concerned about leaving benefits to your survivors, Kestle says, annuities offer a lot of options. You can choose one that offers a joint and survivor pension to your spouse, some will offer a guaranteed payment for a number of years, others will offer a return of premium if you die at a young age. “The more bells and whistles, the less the monthly payment is,” Kestle explains.

Kestle does not believe people should annuitize all their retirement savings. He reiterates that his firm advises reviewing core expenses, seeing if there is a shortfall between what your government benefits provide and what you need for core, fixed expenses, and then annuitizing some of your savings to cover the shortfall.

“You should consider annuitizing a portion of your savings; it shouldn’t be an `all or none’ decision,” he explains. You will need “pools of liquidity” in your savings for emergencies, such as having to put on a new roof. Kestle concludes by saying annuities “play a very important role” in a diversified retirement income portfolio.

We thank Jonathan Kestle for taking the time to talk with us.

Did you know that the Saskatchewan Pension Plan offers a number of annuity options? According to the SPP Retirement Guide, members can choose from these options – a life only annuity, which offers no survivor benefits; a refund life annuity which guarantees a refund to your beneficiary if you have not received the full balance of your SPP account as retirement income; and a joint and last survivor annuity where your beneficiary gets a lifetime pension upon your death equal to 60, 75 or 100 per cent of what you were receiving. Check out SPP, celebrating 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.


Sep 27: BEST FROM THE BLOGOSPHERE

September 27, 2021

Preparing emotionally for retirement may be as important as the financial side

An interesting report from Global News suggests that “preparing emotionally” for retirement may be almost as important as the financial side of things.

In the article, Edmonton retiree Donald Smith tells Global News that he “had trouble the first couple of years (of retirement)… I’m sort of like the racehorse that wants to still keep running.”

He found that he “really didn’t know what to do with himself.”

In the article, Shelly Adam reported similar feelings. After retiring at age 56, she found herself going back to work just two months later on a casual basis. “When everyone else is working what are you going to do?” she asks the broadcaster.

In the end, they both found plenty to do through joining the SouthWest Edmonton Seniors Association, Global reports.

There are regular meetings, including a coffee chat group, the article notes, as well as a book club, choir, arts and crafts, games and cards, and much more.

Both say the social connections they have made through the group are “very important,” Global reports.

University of Calgary psychology professor Candace Konnert tells Global that “emotional planning for retirement often gets overlooked.”

“The focus has been on the financial preparedness and people underestimate, kind of, the social and psychological issues in retirement,” states Konnert in the article.

“We have this term called the ‘sugar rush of retirement.’ That’s that sort of six-month period, sort of post-retirement where you’re just euphoric,” she tells Global.

“You don’t have obligations, your time is unstructured, you can choose to do whatever you want,” she states in the article. “Then after that sometimes people have difficulty coming to terms because they simply don’t have a plan.”

Without a plan, Konnert tells Global, the odds of facing anxiety or depression in retirement can increase. You need a plan on how you are going to spend your time once work is over, she states, and it is “crucial” that your plan includes “being socially engaged with friends or through activities.”

Your plan also needs to be flexible, as your health may change as you age. “Your retirement plan at 66 may not be the same at 76, 86, or even 96,” she tells Global.

Looking at our own circle of 60+ friends, this advice is being heeded. A retired engineer friend has become an avid vegetable gardener, and has taught himself how to carry out his own home renovations; he and his wife are constantly busy. Others are getting back into things they used to do – music, art, golfing, skiing, and more. While it’s true that you will lose some of your old work connections, there’s ample time to make new ones.

All those post-retirement activities will carry a cost, of course, so it’s important to set aside some money today for a fulfilling post-work experience later. For 35 years, the Saskatchewan Pension Plan has been delivering retirement security; perhaps they can do the same for you. Have a look at 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.


Book urges prevention – not magical alchemy – as the way to age well and with dignity

September 23, 2021

Andrew Weil’s Healthy Aging is a well-written, fact-laden look at our society’s fascination with the quest for living longer – even forever – and sets out some steps we can take now to live long and healthier lives.

Dr. Weil points out that humans are the longest-lived mammals, and that research has found that our cells can divide up to 50 times in order to replace themselves. He contrasts that with mice, whose cells can divide 15 times and live only three years, and the Galapagos tortoise, which can live to a whopping age 175 and has cells that can divide 110 times.

Historically, he writes, we are now at our longest-lived as a species. “There is no scientific evidence for greater longevity in any past age,” he notes. However, people have searched for a fountain of youth for many centuries, including Ponce de Leon, who searched for the island of Bimini and its magical spring of youth and Shangri-La, where legends suggest that monks who “plunged forthwith into rigorous self-discipline somewhat curiously combined with narcotic indulgence” claimed to be able to live for several centuries.

The biology of aging has led to research into anti-aging medicine and treatments, which Dr. Weil explores. He concludes that we “will never be able to reverse the aging process… so please forget about anti-aging and avoid obsession with life extension. Instead, let’s focus on preventing or minimizing the impact of age-related disease, on separating longevity and senescence, on learning how to live long and well, on how to age gracefully.”

The second part of the book goes into great detail on steps you can take to do just that. “In our society, and in developed countries generally, blood pressure increases with age, perhaps because of our dietary habits, the stress of modern life, and other unknown factors,” he writes.

Those with high blood pressure should “first try lifestyle measures to normalize it: losing weight, increasing exercise, practicing relaxation techniques… eating fewer foods high in sodium and more vegetables.” If the problem persists, get a doctor’s input and start on “anti-hypertensive medication.”

As we age, we should watch our cholesterol levels as well, he writes. Other advice: keep a medical diary of “past illnesses, injuries, treatments, hospitalizations, current medications, and family history.” Keep current with your immunizations. Get a physical every couple of years. Get screened for cancer and keep your blood pressure as close as possible to normal.

As well – don’t smoke, watch your weight, and watch for unhealthy fats in your diet.

On the eating side, be aware of the glycemic index; “reduce consumption of high-GL (glycemic load) foods… that means less bread, white potatoes, crackers, chips and other snack foods, pastries, and sweetened drinks and more whole grains, beans, sweet potatoes, winter squashes and other vegetables,” he writes. Eat less refined and processed food, fast food, products “made with flour of any kind” and products made with “high fructose corn syrup.”

Generally, he adds, you should eat less meat and poultry and “other foods of animal original,” and more vegetable protein.

Other tips – “white, green and oolong tea” is a good antioxidant, and you can have up to four cups a day. He likes the idea of people taking a daily multivitamin.

Exercise is good but as you age, should be body-friendly, he notes – walking, swimming, cycling, exercise machines and strength training are easy on the joints.

To relax, he suggests “breathwork” as “the simplest, most efficient way of taking advantage of the mind-body connection to affect both physical and mental health.” He concludes with a chapter on the importance of sleep.

He also considers what will happen if the trend towards more longevity in society continues – will we see a demographic change to an older population, with the need for more care for the aged? And, he asks, “what happens to retirement when Americans are no longer saving and are both retiring earlier (the average age is now 63) and living longer?”

It’s hard to do justice to this detailed and well-thought-out overview of the issue of aging well; it’s definitely worth getting a copy of this fine volume and adding it to your retirement library.

Longevity is an interesting topic. On the retirement planning front, longevity is sometimes referred to as a “risk.” It’s thought of that way because there can be a problem when people outlive their retirement savings. The Saskatchewan Pension Plan has an antidote for longevity risk. When you decide to collect your SPP retirement benefits, you can choose among several annuity options. An annuity provides you with a lifetime, monthly income that continues for as long as you live – even if you watch your weight, eat well, exercise and relax your way to 100 and beyond! Celebrating 35 years of delivering retirement security, 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.


Sep 20: BEST FROM THE BLOGOSPHERE

September 20, 2021

One in five over 50 will delay retirement plans: RBC

The pandemic has made many Canadians rethink their retirement agenda, according to new research from RBC, covered in a recent article in Wealth Professional.

According to the article, the study – called the 2021 RBC Myths & Realities Poll – indicated that nearly 20 per cent of Canadians 50 and older have decided to change their retirement date.

There are a number of concerns outlined in the research.

A total of 21 per cent of those with assets of $100,000 or more fear they will outlive their retirement savings. Most of this group, the article continues, “believe they will need $1 million saved for their retirement but more than three quarters are at least $300K short of this.”

It’s worse for those with less savings, the article notes. Those with $50,000 in assets think they will need $533,000 in their savings pots, but are “an eye-watering $473,000 short of this goal,” Wealth Professional reports.

So what are people considering in what the article calls a Retirement Rethink?

  • 22 per cent are “thinking more about where they will live in retirement,” with 20 per cent “deciding where they don’t want to live,” typically meaning not in a retirement home, the article states.
  • Fifteen per cent are said to be reviewing or updating their wills; 17 per cent are “taking stock of their financial affairs,” and 16 per cent “realizing life is short” and are taking up new activities and hobbies, Wealth Professional notes.

Other actions they are thinking of taking, the article concludes, are to “stay in their own home and live more frugally,” to return to work, to downsize or move home, or ask family members for help.

What do we make of all this?

For starters, the cost of a dream retirement condo, cottage or timeshare has gone up significantly lately. It’s not so easy to sell your city house and pick up a cheaper one somewhere else, as prices are up everywhere. This and the massive cost of long-term care, in the thousands per month in most places, makes one’s existing home have new appeal. After all, it is either paid for or in the process of being paid for, you don’t have to pay moving expenses, realtors and lawyers to stay put, and your costs of living are known and predictable.

The article makes the point that having a financial planner makes sense in terms of establishing your financial goals for retirement. For instance, if you plan to stay home and live frugally, will you really need $1 million? It’s important to try and estimate, in advance, exactly what you will need to live on when you live the workforce.

If you are among those Canadians who worry about running out of money in retirement, be aware that the Saskatchewan Pension Plan offers annuities as an option for SPP retirees. With an annuity (they come in various forms with different options) you forego the risk of running out of money in retirement, as annuities provide you with a lifetime income stream. And you won’t have to put your sand wedge down in mid-swing to worry about investment decisions; with an annuity, there are none. Check out SPP, celebrating its 35th year 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.


How to get rid of clutter quickly and easily

September 16, 2021
Photo by Humairah L. on Unsplash

We accumulate so much stuff in our lives, to the point that eventually, many of us will find boxes of stuff in the basement that have remained unopened from the last, or maybe several, previous moves.

It’s daunting to see your place full of boxes of old stuff, and/or disused furniture, small appliances, TVs, and the like – it looks like so much work to get rid of it that it’s easier just to dust the clutter and close the door on it.

Save with SPP looked for help with this problem on the Interweb, and found some interesting suggestions.

The Simple Lionheart Life blog offers some great advice.

They recommend “frequency over intensity” when it comes to decluttering. “Even 10 minutes a day of decluttering will add up over time,” the blog advises. Schedule your decluttering sessions, and have clear goals for clutterless living in a decluttering plan, the blog adds. Another of the great tips (there are several more) is to target the areas of your living space where the clutter is the biggest headache.

The Quick and Dirty Tips blog offers a few more ideas. Here, the authors argue that clutter builds up “because it takes effort to put stuff away.”

A simple way to return things to their correct place is to take an empty box, make a pass through your office or home, and load up everything you encounter that’s in the wrong place. Pop it in the box, the authors suggest, and then when you make a second run through the house, put things where they belong as you pass by. Clever.

The Mommyhood Life blog advises that you create a “make trash, donate or sell” pile of things you aren’t using.

“A donate pile will be for any items that may be useful to another family in need. A sell pile will be for items that are in good shape and have value left to them. A trash pile will be for any items that obviously don’t fit in the sell or donate pile. This will help you get rid of clutter fast by not double thinking about an item, just toss it into a pile,” the blog states.

Other ideas from Mommyhood Life include tips on when to consider getting rid of something – such as, when did you last use it? Does it still help you? As well, get the whole family working on the same page with clutter, the blog says.

Over the years, Save with SPP has attacked clutter (on occasion) by a variation of the “trash, donate or sell” pile. Our pile was trash, donate or recycle. Because we were moving after 10 years in one place, we did a daily run through the house and added items to the three piles. We dropped off donatable items daily at the local thrift shop on the way to work. Trash and recycling went out on garbage day.

We also once employed the services of a junk removal company to clear everything out of the basement just before we moved. It was just like on TV – everything was gone very quickly and painlessly. Right now we are thinking of calling them back to get rid of our space-taking, non-used pool table.

Our neighbours regularly have yard sales to sell off their old stuff. A friend has found a company that will take his empties back for him, and give him a charitable receipt for it! There are companies that will buy your old golf clubs if you upgrade; there are shops that will buy your collectibles if you don’t want the hassle of trying to sell them off yourself online.

One idea that didn’t work was putting excess stuff in a storage locker. After a while you began to feel nagged by the idea that you were paying to hang on to boxes filled with heaven-knows what, old university essays from the 1970s, perhaps, or old sets of cheap crockery or pots and pans you forgot about after packing it up two moves ago.

The biggest obstacle to decluttering is getting going on it, so good luck and Godspeed!

If you make a few bucks from getting rid of your old stuff, a nice place to stash the cash is the Saskatchewan Pension Plan. You can make one-time contributions to your SPP account via your online banking site, by sending them a cheque, or by using their website to make a credit card contribution. All those little piles of extra cash will then be invested professionally and converted to retirement income when you’ve finally scaled the wall and escaped from the office! 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.


Sep 13: BEST FROM THE BLOGOSPHERE

September 13, 2021

Where should you be – retirement savings-wise – at different ages?

Saving for retirement tends to be a solitary process. While we are encouraged to put away what we can for that future post-work life, there’s little information out there on how much is enough, or what targets we should shoot for at various ages.

Writing in Yahoo! News, author Jami Farkas provides a little bit of clarity on those savings benchmarks.

First, Farkas writes, “the best time to start saving for retirement is when you start earning.” So even in your 20s you should be thinking about putting some of your paycheque towards retirement, Farkas continues.

As you age, those savings targets become more concrete, Farkas notes.

“By age 30, you should have saved an amount equal to your annual salary for retirement,” the article advises. “If your salary is $75,000, you should have $75,000 put away.”

The article suggests this goal can be met by putting away 20 per cent of what you earn, and to “live and give on the remaining 80 per cent.” The article, intended for an American audience, says signing up for any workplace retirement program, like a pension plan or here in Canada, a group registered retirement savings plan (RRSP) is another positive step towards your savings goal.

Saving for retirement in your 30s can “even trump paying down debt,” the article notes.

In your 40s, you should have three times your salary stashed away, the article urges.

“If you don’t have a retirement savings strategy as part of your overall financial plan by this point, don’t delay,” Farkas writes.

A common mistake at this point is growing your lifestyle at the expense of your savings, the article explains – moving into a bigger house or apartment, or upgrading your car. Dr. Robert Johnson of Creighton University states in the piece that “what happens is they are unable to improve their financial condition because they spend everything they make. People are wise to effectively invest any money from a raise as if you didn’t receive the raise. That is, continue to live the same lifestyle you led before receiving a raise and invest the difference.”

If, instead, you were to invest some or all of a raise in your future, it would add up, the article notes. A $5,000 raise invested annually at 10 per cent will yield an eye-popping $822,000 in savings after 30 years, the article explains.

By age 50, the article notes, you need five times your salary in savings. With kids usually gone from your home and their education paid for, this is a good age for catch up if you have fallen behind, Farkas writes. And be sure you are investing in a low-fee savings vehicle, the article adds.

At 60, the article concludes, you should have seven to eight times your salary in retirement savings because you are now five years away from retirement. As well, the article warns, you should consider reducing your exposure to riskier investments, such as equities.

The article notes that those approaching retirement in 2007/8 would have seen their equity investments fall by 37 per cent in one year.

Let’s sum all this thinking up. Start saving for retirement as soon as you start making money. Make it automatic. Don’t forget your savings program in the excitement of getting a big raise and making more money. Don’t put all your savings eggs in one basket, particularly if that basket is full of stocks and no bonds or alternative investments.

The article suggests that a great way to get to the finish line in retirement saving is to join up with any retirement plan your employer offers – often, they will match what you contribute. That’s great advice. But if you don’t have access to an employer retirement program, fear not – the Saskatchewan Pension Plan is available for do-it-yourselfers. Through SPP you can save in a low-fee program that has delivered strong investment returns for over 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.


How you can set up a “Pay Yourself First” plan

September 9, 2021

By now, practically all of us have heard about “pay yourself first” as a savings strategy.

The general idea is to put away some percentage of your earnings, and then live on the rest. It sounds simple in theory, but in practice, less so. To that end, Save with SPP took a look around the Interweb to get some ideas about how to actually get going on a “pay yourself first” plan.

The folks at MoneySense see several simple steps you need to take to put your plan into action.

First, they suggest, “zero in on your savings goals.” What are you paying yourself first for – to build an emergency fund, or save up for a down payment, or a wedding or (our favourite) retirement, the article asks.

There has to be a reason why you are directing money away from your normal, bill-paying chequing account, MoneySense tells us.

Next, they recommend, take pen to paper and figure out how much you actually can pay yourself first. Make a list of your monthly “must spends,” like “shelter, food, electricity/heat, phone, transportation, etc.,” the article says. What’s left over is “discretionary” money, which can be spent or saved, the article adds.

If you are saving for more than one thing, you need to figure out how much each month to put away for each category. Then comes the actual “doing” part – automating your savings plan.

MoneySense recommends setting up an automatic transfer each month that moves money from chequing into savings. This amount can be increased when you get a raise, the article notes. Savings should be directed to either a tax-free savings account (TFSA), a registered retirement savings plan (RRSP), or a combination of both, the article concludes.

The Oaken Financial blog notes that guaranteed investment certificates (GICs) can be a good place to stash savings. GICs are locked in for a time, but pay a set amount of interest for a fixed term, the blog notes. High-interest savings accounts pay good interest but allow you to make withdrawals at any time, the blog notes.

The Golden Girl Finance blog says there are apps that take the difficult thinking part out of the saving equation. Wealthsimple, the blog notes, allows you to round up your credit card purchases, so you are actually paying a little extra, with that money being directed to your savings account. So you save a little as you spend, the blog notes.

Save with SPP notes that similar arrangements – where you pay a little extra on debit card purchases, or where a money-back credit card deposits the cashback directly to your savings account – exist at other Canadian banks.

Other ideas that have flashed across the screen of late:

  • Banking your raise. You were paying off the bills OK before you got the raise, so why not stick the difference between your former pay and your new pay into savings, and live off the rest? You were the day before the raise!
  • Banking your cost of living adjustment. Same concept, but for us lucky pensioners who get cost of living increases, why not direct the increase to savings and continue to live on what you were getting prior to the increase?
  • Starting small. You may not stick with a pay yourself first plan if it is overly ambitious. Uncle Joe always said bank 10 per cent and live on the 90 per cent; he did, and he did well, but Joe was a very disciplined spender. Better to start smaller, maybe two or three per cent, and phase it up.

So to recap – you either need to know how much you spend each month to figure out how much you save, or you need to just pick an affordable percentage of your earnings and set it aside. Once you have automated the process, you won’t miss the saved amount, which will grow happily in a savings account, a retirement account, or perhaps the Saskatchewan Pension Plan.

Celebrating 35 years of operations, the SPP permits automatic contributions. They can set it up for you, or you can set up SPP as a bill on your bank website and set up the automation yourself. Either way, the money you direct to SPP will be put away for your future, invested professionally, and – grown – will await you after you get home from the retirement party!

Written by Martin Biefer

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


Sep 6: BEST FROM THE BLOGOSPHERE

September 6, 2021

State pension benefits starting later around the world

Here in Canada, the “normal” age at which you can start full government retirement benefits – the Canada Pension Plan (CPP) and Old Age Security (OAS) – is 65.

That date probably reflects the old “mandatory retirement” rules of years ago which decreed that at 65, it was time to go.

But with people now living longer and working until they’re older, an article by Schroders notes that moving beyond age 65 for official pension start dates.

For instance, the article notes, in the U.S., pensions start at 66 and will move to 67 in 2027. Australia is similar, and will move to age 67 in 2023. The Netherlands and several other European country are moving to a “67+” start date with links to life expectancy rates, Schroders tells us.

Schroders explains the shift this way.

“The model common in most developed countries – start work at 18 to 21 and retire at around 60 to 65 – no longer looks viable as governments try to balance pension obligations with stretched public finances,” the article tells us.

Another factor, the article continues, is the increase in life expectancy. There is a growing “demographic imbalance where there are fewer retired persons for every retired person,” we are told. Not only are older folks living longer, but the birth rate is declining, meaning the talent pool to replace retiring workers isn’t growing as it once was, the article states.

“Typically, the fertility rate required to replace an existing population is 2.1 children per woman,” the article notes. “According to the latest data, the average for the 35 countries in the Organisation for Economic Co-operation and Development (OECD) is 1.7. Many countries, including Germany, Japan and Spain sit at 1.5 or lower,” Schroders explains.

So the ratio of the working to the “dependant,” those not working any longer, “has fallen and will keep falling for decades,” the article adds.

Lesley-Ann Morgan, Schroders’ Head of Retirement, calls this situation “a ticking timebomb.” Retirement systems “may not be affordable in some countries unless adjustments are made,” and the easiest way to fix them is to move the retirement age forward.

The takeaway for those of us who are not retired is this – pay attention to what’s going on with the CPP and OAS, and retirement rules in general, because they can change. Most recently, the CPP expanded its benefits for future retirees – good news for younger workers – but the power of demographics may mean other changes that are yet to be enacted.

One way you can help protect yourself against future changes in state pension benefits is by having your own retirement nest egg. A great option is the Saskatchewan Pension Plan, which allows you to stash up to $6,600 a year away for retirement. That money is professionally invested, and at retirement, if you are worried you might live to 104 like your mom, SPP has annuity options that ensure you won’t run out of money no matter how many birthday candles they put on the cake. 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.


McCloud’s Saving Money is jam-packed with thrifty tips

September 2, 2021

Ace McCloud’s Saving Money is a slim volume that’s absolutely jam-packed with good advice on saving money.

McCloud begins by stressing the importance of “investing in yourself,” specifically the need to look after your physical and mental health. Good health practices are essential to “living a longer, happier life.” So, eat well, visit the gym, get lots of sleep and check in with your doctor, we are told.

For mental health, McCloud says yoga and meditation are good bets.

On the money side, McCloud points out the advantages of having a savings account. “First and foremost, your chances of spending that money are much less (in a savings account) than if your money was in a chequing account,” McCloud notes. It’s a good start, but with interest rates currently quite low, other investments – property, stocks, bonds – may provide greater profits.

On the stock front, McCloud says investing in preferred stock “is best for those who don’t get excited by risk taking because the price of the stock doesn’t tend to fluctuate.” You’ll get better interest via bonds than a savings account, and if actually buying a property to rent out is beyond your means, a Real Estate Investment Trust (REIT) can get you into the real estate game with a much smaller entry fee, he notes.

Many of us don’t have money to save due to high levels of debt, writes McCloud. “Many people find themselves in bad credit card debt because credit cards easily bring on feelings of instant gratification,” he explains. So while saving is a great thing, he advises getting rid of “high interest debts as fast as you can” to free up more money to save.

He gives an example indicating that if you make only the minimum payment on a $10,000 credit card balance, “it would take you nearly 30 years to pay it and it would cost you $12,000 just in interest!” By paying just under twice the minimum payment, you can pay it off in two years and save $10,000 in interest. If you have a number of credit cards, the Snowball Method may be a good idea – put extra money on the card with the lowest balance until you pay it off, and then add that money to the next-lowest card, McCloud explains.

Obviously debt is just one factor that restricts savings. The other is overspending. McCloud offers dozens of great ideas on how to save money. Go to the library, he suggests. Put down your electronics and take a walk. Don’t go to malls without spending money. Clip coupons. Shop at thrift stores. Make dining out (or ordering in) for special occasions only.

A nice bit of advice is to “take care of your personal possessions… you can make them last longer, therefore getting more value out of your money.” This advice extends to toys, cars, your house… the whole shebang.

We also like the idea of saving change in a jar.

There’s a handy section on grocery shopping that contains advice like “don’t fill your cart,” buy generic and private label brands, avoid pre-packaged food, and the classic “don’t shop when you’re hungry.”

While the book is intended for a U.S. audience, many of the tax saving tips are relevant for us Canadians. Make charitable donations to get a tax deduction, he writes. If you are moving, keep receipts – you can often claim the expense if you are moving somewhere to get a new job. The cost of having someone prepare your taxes is tax deductible, as are a variety of home office costs if you are self-employed.

He concludes by recommending a family stick to a budget to avoid surprises. This is a fun and straightforward little book that can jump-start your thinking if you are finding that there’s less money left over on payday than there used to be. It’s well worth reading.

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.