Rich Girl, Broke Girl shows the steps women need to take to gain control of their finances

December 30, 2021

Financial author Kelley Keehn thinks women need to be in charge – not unwilling passengers – when it comes to steering their financial ships of state.

Her well-written (and entertaining) book, Rich Girl, Broke Girl provides step-by-step directions to help women gain control over debt, day to day expenses, investing and of course, retirement savings.

As the book opens, Keehn notes that while most women are told they can “financially achieve anything, dream as big as any man, accomplish anything,” they often get blamed if they fail, and are told to leave finances to “someone else in (their life),” or to “marry rich.”

The stats, she writes, show that many women don’t like others being in charge of their money. A full two-thirds of women “whose partners are the primary breadwinners feel trapped,” Keehn writes. “Seven in ten women wish they had more power in their financial futures,” she continues. “Sixty-four per cent of women wish they had their own money set aside just in case.”

She then tells the story of “Mack,” a young woman who tried to strike out on her own, but lacked financial knowledge, didn’t know the cost of things, tried to live an impossibly unaffordable life, blew her credit on a single trip, then got behind and didn’t ask for help, ultimately forcing her to move back home.

An “anti-budget,” Keehn writes, is the solution here. Track every dollar, categorize spending, multiply expenses by 12 to create an annual budget, and then “trim the excess… (and) reallocate.” Fictional Mack could save $3,255 a year, writes Keehn, by saving just 50 per cent on her discretionary expenses.

The book looks at the ins and outs of credit, and then, cohabitation.

“Have the money talk with your partner early,” Keehn advises. If your partner is a saver, and you are a “live for today” spender, that collision of views could harm the relationship, she notes.

There’s a great, detailed overview of investing, which looks at cash, fixed income and equities, as well as other investment vehicles. Keehn recommends a diverse approach to investing. Don’t invest in just one stock, but a diversified portfolio, she explains. Understand the risks of equity investing, but don’t fear them and put all your money in fixed-income, Keehn adds.

She explains the difference between buying stocks and bonds yourself versus buying units in mutual funds – the latter can have high fees, she warns.

Keehn points out how even the modest inflation we’ve experienced in the past five years can “erode your wealth.”

In the section on tax shelters, Keehn says it is best to think of registered retirement savings plans (RRSPs) and Tax Free Savings Accounts (TFSAs) “as an empty garage. You have to put “cars” (investments) into them, and depending on the rules of the tax shelter, there are different perks and penalties.”

With both, you can invest in a “plethora” of different vehicles, from “guaranteed investment certificates (GICs) and savings accounts to stocks, bonds, exchange-traded funds (ETFs), mutual funds and more.” Only the tax treatment of the “cars” is different – you get a tax deduction for funds placed in an RRSP, and they grow tax free, but are taxed when you take money out. There’s no tax deduction for putting funds in a TFSA, but no taxes on growth, and no taxes due on any income taken out of the TFSA.

She talks about the need to maximize your contribution to any company-sponsored retirement savings plan, because otherwise, “you are leaving money on the table.”

Keehn offers some thoughts on the idea of paying off mortgages quickly as a strategy – perhaps, she writes, it’s less of a good idea given the current low mortgage rates – if you have debts at a higher interest rate, perhaps they should be targeted first.

She’s a believer in getting financial advice when you run into problems.

“It’s natural to feel ashamed of our money mistakes. However, our problems compound when we can’t manage on our own and don’t seek help. Think of it this way: Would you formulate a health-improvement plan before going to your doctor to see what’s actually wrong with you? Probably not.”

This is a great, clear, easy-to-follow walk through about a topic that many people don’t like to deal with. If you’re living paycheque to paycheque, with no emergency savings, this book offers you a blueprint for getting out of trouble and building financial independence. It’s a great addition to your financial library.

Kelley Keehn spoke to Save with SPP last year and had great additional insights about the stress Canadians feel over money matters.

Did you know that in-year contributions you make to the Saskatchewan Pension Plan are tax-deductible? In 2022, you can contribute up to $7,000 per calendar year, subject to available RRSP room. As the book suggests, funds within a registered plan like SPP grow tax-free, and are taxed only when you convert your SPP savings to future retirement income. 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.


Dec 27: BEST FROM THE BLOGOSPHERE

December 27, 2021

What if there never is a retirement party?

A new study from the U.K. suggests – that for an estimated one million Brits – there will be no life after work.

The study, carried out by Canada Life, is covered in a recent article in Professional Advisor. The article notes that 17.1 million Brits plan to work beyond the normal state pension age.

Why the focus on working well into retirement age?

The article says 43 per cent of those planning to work longer “consider their pension to be inadequate to retire fully.” A further 22 per cent, Professional Advisor continues, are concerned “about how long their retirement savings will last,” and 10 per cent fear that unless they continue working, they won’t be able to afford their current lifestyle.

And it’s not like people are eager to work into their late 60s and beyond, the article reports.

Thirty-four per cent of those surveyed feared a longer career at work because they are “concerned about being unable to enjoy their older age,” the article notes. Thirty-three per cent worry that working longer will “take a toll on their health,” and 27 per cent said that even though they want to work longer, “deteriorating health” will make it harder to do so.

“Digging beneath the surface, there are a variety of reasons for working beyond state pension age, or not retiring at all,” states Andrew Tully of Canada Life in the Professional Advisor article. “For some people the social side of work would be missed, but for others, financial considerations are a key driver. As an industry, we need to find ways of encouraging better engagement in long-term financial planning as a way to ensure that people are confident that they are building sufficient savings for retirement,” he states in the article.

Tully also says that the pandemic is having a big impact on people nearing retirement age. Many are “re-evaluating how they want to live and what they want to in later life.”

This article raises some important questions. Clearly, those who – as the article suggests – feel they don’t have a good enough pension, or that they will outlive their savings, don’t have much of a choice about whether to keep working. But, as the article notes, age can catch up to you and can begin to limit how much work you can take on. This would seem to be particularly true for those of us in physically demanding lines of work.

If retirement is a long way off, you have time on your side, and can take steps to avoid funding yourself with inadequate retirement savings. Be sure to join any pension arrangement your workplace offers as soon as possible, and contribute at the maximum rate if you can afford it. If you don’t have a workplace pension plan, or want to augment the one you have, check out the Saskatchewan Pension Plan. The plan can be your personal retirement system – you can contribute up to $7,000 per year towards your future retirement, and SPP will grow that money for you with professional investing at a low price.

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.


Be active, eat healthy, and enjoy your life, advises The Retirement Handbook

December 23, 2021

If you are about to leave work behind and start a new life as a retiree – and haven’t really thought about what your new life will look like, The Retirement Handbook by Ted Heybridge is the book for you.

This book is not about the money side of things. Instead, the focus is on you – ideas about how you can be active, eat well, and enjoy life.

Retirement, Heybridge begins, “is your time to spend as you choose, so it’s up to you to decide how much time you wish to devote to volunteering, meeting friends, exercising, gardening or minding grandchildren.”

Exercising and being active is a key consideration, he writes. “Only one in seven 65-74-year-olds and one in 14 over 75s meet World Health Organization guidelines for recommended physical activity,” he notes. That’s 2.5 hours of “moderate aerobic physical activity per week,” and he encouragingly notes that “any activity, no matter how light, is better than none.”

Cycling, he writes, “gets you out, relieves stress, and makes you feel great.” Sixty-three per cent of Copenhagen residents commute to work or school by bike, he notes, adding that “the health benefits of cycling outweigh the injury risks by 20:1.”

Other great activities listed in the book including dancing, running, yoga, swimming, and getting to the gym.

In the section of the book on healthy eating, Heybridge talks about the importance of hydration. Women should have 2.2 litres of water each day, for men it is 3 litres. “If we forget to keep our fluids up, we become dehydrated, which can lead to fatigue and poor concentration,” he warns.

Other advice in this section includes cutting back on sugar, the many advantages of “plant power” in your diet, and useful strategies for cutting back on alcohol.

While saving for retirement and pension plans aren’t expressly featured in this book, ideas on how to make your retirement dollars go farther are.

The “pain-free ways to save” section suggests growing your own food and flowers, becoming a chef at home to save on restaurant dining, using other means – footpower, a bike, or the bus – to cut back on driving (and the cost of gas), selling off your clutter and many more simple-to-do ideas.

Other ways to augment your retirement income include working part time, being a consultant, turning hobbies into money-makers, and many more.

There’s a section on new activities you can take on with the luxury of more time – furthering your education, learning a new language, taking up carpentry, and becoming a wine aficionado.

A nice section on relationships notes that working couples who both retire will find they are spending a lot more time with each other than they are used to. “Make sure you have separate interests and see your own friends. That way, you’ll have something to talk about when you get home.”

Our late mother used to say that when Dad retired, he spent the first year following her around and reading her items out of the paper. So she “assigned” him some new tasks – he took over doing the laundry, and loading and unloading the dishwasher, which he did with aplomb.

This fun, well-written and very helpful book concludes by offering some words of wisdom from famed comic actor George Burns – “you can’t help getting older, but you don’t have to get old.”

It’s always nice to have a few twenties in the wallet when you’re retired. If you don’t have a pension program through work, you’ll need to handle saving on your own. A fine partner in your saving efforts is the Saskatchewan Pension Plan. It’s a full-service personal retirement system – your contributions are invested in a professionally managed, pooled fund, at a low cost, and when it is time to turning savings into income, SPP has many options for you, including lifetime annuities. Check them out today!

Written by Martin Biefer

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


Dec 20: BEST FROM THE BLOGOSPHERE

December 20, 2021

TFSAs – a handy tool for retirement savers and those drawing down their nest eggs

Writing in Investment Executive, Jeff Buckstein takes a look at how the Tax Free Savings Account (TFSA) can play a key role not only in saving for retirement, but in the trickier “drawdown” stage.

For starters, he writes, “many people quickly identify the registered retirement savings plan (RRSP) as a key component of successful retirement planning,” overlooking the “complementary role” the TFSA can play “in planning for and enjoying retirement.”

One interesting TFSA characteristic is that money saved within them does not – like in an RRSP – have to come from earned income. Examples of income that doesn’t qualify for an RRSP contribution would be dividends from a private corporation or business, or “a windfall, such as an inheritance,” Buckstein writes.

If you are a regular RRSP contributor who maxes out each year, any extra cash can be saved in a TFSA (up to the annual TFSA limit), he writes. As well, if you are in a company pension plan where your contributions produce a pension adjustment – which reduces how much you can contribute to an RRSP – the TFSA is a safe savings alternative, the article notes.

Quoting Tina Di Vito of Toronto-based MNP LLP, the article notes that “lower income clients who anticipate relying on Old Age Security (OAS) or the Guaranteed Income Supplement (GIS) may be better off investing in a TFSA.”

That’s because withdrawals from a TFSA are not considered taxable income, like withdrawals from an RRSP, a registered retirement income fund (RRIF) or an annuity purchased with registered funds are. So TFSA income doesn’t impact one’s ability to qualify for OAS or GIS.

So what’s a good idea, investment-wise, for a TFSA?

The article quotes Doug Carroll of Aviso Wealth Inc. in Toronto as saying that since TFSA investments are going in to the account tax free and coming out tax free, “you probably lean a little more toward equities in there than you would in your RRSP.”

A more complex idea explored in the article is – for those with substantial TFSA savings as well as an RRSP – to draw down the TFSA income first, and try to delay touching the registered money until you have to at age 71. This strategy can reduce your taxable income over the longer term, the article explains.

Our late father-in-law used to use his TFSA as part of his RRIF withdrawal program. He’d withdraw funds as required from his RRIF, pay tax on them, and then put the after-tax income back into his TFSA to invest. This generated a regular and growing supply of tax-free income, he used to tell us with a broad grin.

Many of us semi-retired boomers didn’t get in on the TFSA, launched in 2009, until the latter years of our careers. If you are younger, and decades away from retirement, think of all the tax-free growth and income your savings could produce in the run up to your Golden Years.

If you don’t have a retirement savings program at work – or want to supplement the one you have – a great place to look is the Saskatchewan Pension Plan. This made-in-Saskatchewan success story has been helping Canadians save for more than 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.


Pension dollars are a boost for Canada’s economy, study says

December 16, 2021

A new study has found that every $10 of public sector pension that is paid out to a retired member returns $16.72 of activity in the Canadian economy.

The study was produced by the Canadian Centre for Economic Analysis on behalf of the Canadian Public Pension Leadership Council.

Save with SPP spoke with Derek Dobson, CEO and Plan Manager of the Colleges of Applied Arts & Technology Pension Plan (CAAT) and a Co-chair of the Council, to further explore the survey’s results, and to talk generally about the value of pension programs.

He notes that the study is “agnostic” about what type of pension plan is producing the $10 spent by its retired members.

“Any plan that uses experienced investment professionals, and pooling – I include the Saskatchewan Pension Plan as an example of that – is delivering pensions efficiently,” he explains. So whether the $10 is produced by an efficient defined benefit (DB) plan or an efficient defined contribution (DC) plan, the economic benefits are the same.

The study noted that – looking at public sector pension plans only — $82 billion of economic activity was generated in 2019, “supporting 877,100 jobs and $33 billion in wages for Canadians,” according to the study’s executive summary. Governments gain $21 billion in tax revenue, the study notes. Collectively, Canadian public sector DB plans have an eye-popping $1.27 trillion in assets.

While the study found pension spending generally benefited all Canadians, one interesting aspect was that rural businesses seemed to derive more positive gain from local public sector pensioners.

Dobson says part of the reason for this may be the current trend towards a migration from expensive city living to more affordable smaller centres. “The housing is more affordable in smaller cities and towns,” he says. “We also found that those living in smaller towns tend to spend more locally than those in cities – so that is part of the reason the economic benefits of pensioners had a 6.5 per cent bump” in rural areas when compared to urban centres.

Given the “win win” nature of having a good pension plan – the retired member gets the steady, predictable income, while the economy benefits from it being spent – we asked Derek Dobson if there should be wider availability of good pension plans for those who lack them.

CAAT’s own DBplus pension plan, a program that offers a strong, secure lifetime pension program, has grown in just two years to include 200 participating employers. “We are trying to remove barriers to access to good pensions,” Dobson explains.

A good pension, he explains, has the added benefit of helping employers attract and retain good employees. It delivers twice the retirement benefits per dollar saved than investing independently in Group RRSPs, and helps employees reach their retirement goals faster with employer-matched contributions. Dobson says it is a shame to see well-trained healthcare workers and engineers leave the country for jobs elsewhere – a good pension program can keep them here in Canada.

Another advantage for employers is that if a pension plan is offered by a third party rather than being administered and funded by the employer, it’s a time, risk and funding relief for the employer. “No Chief Financial Officer in the private sector wants to see pension liabilities on their balance sheet,” he explains. With DBplus, the employer’s pension cost is a fixed amount.

“Many studies have shown that year after year, more and more Canadian workers are willing to forego more pay in order to get a better pension,” he says.

The only three organizations he currently sees as trying to bring pension coverage to underserved sectors are CAAT, through its DBplus program, the OPSEU Pension Trust, through its similar OPTrust Select plan, and the Saskatchewan Pension Plan through its voluntary, open defined contribution program.

Dobson concludes by saying that Canada has become known around the world for the efficiency of its pension system, the “Maple Model” of pension plan that feature pooling, low administration costs, expert investing, and joint governance where members and employers have an equal say in how the systems are run.

“Public service pension plans are an amazing and unique asset for Canada. So the more people that can be brought in, the better – pensions really help workers, retirees, their families and the economy.”

We thank Derek Dobson for taking the time to speak with us.

Did you know that the Saskatchewan Pension Plan has, according to its 2020 Annual Report, has more than $528 million in assets and 32,613 members? This growing open defined contribution plan is designed specifically for those without a workplace pension – a made-in-Saskatchewan solution to the problem of retirement saving for individuals and businesses. 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.


Dec 13: BEST FROM THE BLOGOSPHERE

December 13, 2021

Inflation: a pain for many, but a plus for savers?

Writing for CBC, Don Pittis notes that the return of higher inflation will be both good and bad news for Canadians.

Observing that inflation in the U.S. is running at 6.2 per cent, and that the Bank of Canada’s Governor Tiff Macklem is predicting five per cent inflation here, Pittis writes that “if history is any guide, inflation can lead to turmoil.”

“Those effects include the pain of shrinking spending power, the prospect of labour conflict as employees struggle to get their spending power back, a potential disruption of Canada’s soaring housing market and a reconsideration for older people about how to make their money last through a long retirement,” writes Pittis.

But there can be an upside to inflation for some of us, he continues. He quotes The Intercept columnist Jon Schwarz as stating “inflation is bad for the one per cent but is good for almost everyone else.”

As an example, those saving for retirement will be pleased by higher interest rates, Pittis contends.

“It is clear that those saving for retirement may take a different view, especially as the boomer bulge exits the labour market. Even before the latest round of pandemic monetary stimulus, people contemplating a long retirement complained about a paltry return on savings. With inflation higher than the rate of interest, cautious savers are now watching with horror as their future spending power shrinks,” writes Pittis.

He notes that even as inflation ticks up, “lenders have been handing out mortgages at rates considerably less than the rate of inflation.”

Inflation, the article concludes, may lead to higher prices but also higher wages for workers; Pittis adds that any rise in the Bank of Canada rate won’t be an instant fix for inflation, but the beginning of a process that might take years.

Save with SPP can attest to some of the things Pittis points out by thinking back to the high-interest days of the ‘70s and ‘80s. He’s right to predict higher rates are a plus for savers – we recall getting Canada Savings Bonds that paid double-digit interest with zero risk. The same was true of Guaranteed Investment Certificates (GICs).

There was a positive effect on wages as well. There was federal legislation on wage and price controls that, among other things, limited wage increases to six per cent the first year, and five per cent the second. Six and Five. In the many decades that have come and gone since the old Six and Five days, it is hard to think of a time when people got routine pay raises that were that large.

So while we gripe about higher gas prices and grocery costs, and the jump in the costs of most things due to supply chain issues, this would be a good time to start stashing away a few bucks every payday for your future retirement.

A great destination for those loonies is the Saskatchewan Pension Plan. The SPP, now celebrating its 35th year of operations, offers a balanced approach to investing. The SPP’s Balanced Fund invests 26 per cent of its assets in bonds, 7.5 per cent in mortgages and 1.5 per cent in short term investments. You can bet the plan’s investment managers are keeping an eye out for growing opportunities in the fixed income sector – and that’s good news for all of us who have chosen SPP to be a part of our long-term retirement savings 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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


As pandemic continues, Canadians are seeing more of their home country

December 9, 2021

If there can be a silver lining in this dark cloud that is the pandemic, it might be the fact that so-called “domestic tourism,” or seeing Canada first, is on the upswing. According to the National Post, domestic bookings jumped 30 per cent in 2020 over 2019.

“What we are seeing in Canada is similar to what we have seen in North America and globally. People can’t travel abroad, so they are finding spaces within their own states or counties or countries to visit,” Chris Lehane of Airbnb told the Post last year. “We have seen a real increase in domestic travel.”

One reason for that, the CBC reports, may be the cost of an out-of-country vacation.

First off, the prices of air travel and car rentals “are on the rise,” the broadcaster reports, and as well, you may be made to take COVID-19 tests to get back home.

“Depending on where you’re travelling to, you may have to shell out for two COVID-19 tests, which can add hundreds of dollars to your travel costs,” the CBC reports. As this blog is being written the requirement for a test to go on a short trip to the U.S. has been dropped, but rules are still in place for longer trips.

The CBC story looks at the case of the Wilson-Paradis family of Peterborough, Ont., who planned a trip to Vegas earlier this year. At that time, however, it would have cost $1,000 for five PCR tests so they could fly back to Canada.  “It was very disappointing,” Ian Wilson told the CBC. “I’m not opposed to getting the test … but it’s the cost. It was just adding too much onto the trip for our family to afford.”

So, why not see Canada instead?

According to CP24, the Ontario government has announced a tax credit for Ontarians who plan a “staycation” within the province.  Ontarians planning an in-province vacation in 2022 could get a tax credit of $1,000 for an individual, and $2,000 for a family, if they “stay for less than a month at… a hotel, motel, resort, lodge, bed and breakfast or campground,” CP24 reports. The province, the broadcaster says, hopes the credit “will help the tourism and hospitality sectors recover and encourage Ontarians to explore the province.”

Our huge country, bounded by three oceans, has a lot to see – the beautiful B.C. coast and the Rockies, shared with Alberta. The vast blue skies and flowing wheat fields of the prairie provinces. Big city fun in Vancouver, Toronto and Montreal. The east coast, with its sweeping seacoast vistas and amazing history and tradition. We have a lot to see right here at home.

And if you’re planning a little travelling once work is in the rear-view mirror, consider the Saskatchewan Pension Plan as a go-to resource. The SPP will take your contributions, invest them in a pooled, professionally managed investment fund featuring a low management expense, and grow them for you. When the day comes to turn savings into retirement spending, you have many options from SPP, including that of a lifetime pension.

Be sure to check out SPP!

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.


Dec 6: BEST FROM THE BLOGOSPHERE

December 6, 2021

Students should take advantage of retirement saving and its tax advantages: The Varsity

We all look back fondly at our days as students, whether in regular or post-secondary school. At no time does this writer ever remember any friend or classmate talking seriously about the need to save for retirement. There were many other things to worry about, including passing courses and looking for a job.

But an article in the University of Toronto’s The Varsity newspaper says even students should be thinking about life after the jobs they are about to find.

“As a student, investing in a (registered) retirement savings plan early can prove to have long-term benefits like tax-deductible contributions,” the article begins. “This means that the amount you put into your RRSP for the year is deducted from your taxable yearly income. Further, investments are tax-deferred, which means that taxes on the growth of your investments are not paid until you withdraw the funds from your RRSP account,” the article explains.

The article makes the point that while the tax-free savings account (TFSA) allows money to grow without taxation, contributions made to it are not tax-deductible like RRSP contributions. As well – and a key point if you are thinking of the money being like a piggy bank for the future – is that withdrawing money from an RRSP is more difficult. The RRSP piggy bank is much harder to raid than a TFSA, the article explains.

“The idea of saving for retirement while having to pay outstanding debts like credit card statements or mortgages can be overwhelming,” The Varsity notes. “Everyone has a different financial scenario and students must evaluate what works best for them, even if it means only putting small amounts of money aside in their RRSP every month,” the newspaper adds.

The article also looked at the idea of starting retirement savings early.

Citing a recent study, The Varsity reports that folks in the Gen Z cohort start saving at 19; millennials at age 25 and Gen Xers at 30.

And some great news from The Varsity article is that younger people are getting the message about the importance of getting a head start on retirement savings.

“It appears that starting to save at a younger age has been a message that has trickled down across generations, since the oldest members of Gen Z are only 24 years old. Gen X and baby boomers have been found to contribute an average of 14 to 15 per cent of their income into their retirement fund, while Gen Z and millennials invest, on average, 16 per cent of their income in their retirement savings,” The Varsity reports.

Other points made in the article include the idea that as living costs continue to rise, many households “will need to continue working past the age of 65 in order to afford retirement.” Citing recent research from the Healthcare of Ontario Pension Plan, the Varsity notes that 67 per cent of Canadians “think that Canada will be facing a retirement crisis;” that same study found that 77 per cent of workers liked the idea of their employers offering retirement savings plans.

The Varsity article concludes by saying that if you are young, you should be asking and talking about getting an early start on retirement saving.

If your employer does offer a retirement program, be sure to join it and contribute as much as you can. If you don’t, you need a do-it-yourself retirement plan. The Saskatchewan Pension Plan provides exactly what you need to get rolling. You can contribute up to $6,600 per year to SPP, and like an RRSP, SPP contributions are tax-deductible. Check out SPP, celebrating 35 years of operations, today!

Written by Martin Biefer

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


Are we moving away from cash – and is that really such a good thing?

December 2, 2021
Photo by Karolina Grabowska from Pexels

Those of us of a certain age can remember when cash was king. Back in the day, few had credit cards, “tap” purchases were decades away in the future, and – minus a mobile phone, which was still being invented – you needed change to make a phone call when away from your landline.

Bills were paid by cheque, or directly at your bank branch, where there was a massive lineup out to the street on pay day.

The pandemic seems to have speeded up an already “in progress” move away from cash. Save with SPP took a look around to see what people are making of this development.

Writing in the Globe and Mail, Casey Plett notes that the idea that we are becoming “a cashless society” has turned into “a common belief… as if currency were simply one of so many Old World analog relics circling the drain before they gurgle into oblivion.”

Her article notes that during the early days of COVID-19, the use of cash “was phased out entirely” by many institutions over fears that money might actually help the pandemic spread more quickly. Even though such concerns have now been addressed, the use of cash has not resumed at pre-COVID levels, she notes.

“But a cashless society is not a foregone conclusion,” Plett writes in the Globe. “And while it may seem like a fuddy-duddy Luddite concern – the equivalent of clinging to one’s touch-tone phone, perhaps, or making a plea for beepers – a complete societal changeover to non-cash payment would not, in fact, be a good thing.”

She says a fully cashless society would be “inequitable” for those – such as the vulnerable and the homeless – who don’t have access to the banking system. Her article cites figures from the Canadian Centre for Policy Alternatives showing that an astounding one million Canadians (as of 2016) were “bankless,” and five million more “underbanked.” This latter group may have a bank account, but no credit or other banking services.

She also points out that cash can be indispensable when the Internet goes out, your credit card is locked for mysterious reasons, or if there’s a power outage (remember 2003). Cash, she writes, “is a refuge of privacy,” in that your purchases with it aren’t tracked or marketed. She concludes by saying it would be unwise for governments to move away from it altogether.

Even before the pandemic was an idea, the National Post was predicting the end of cash would arrive five years ago in 2016.

The Post cited research from 2016 showing that 77 per cent of respondents “preferred to pay for purchases by debit or credit card,” and that 65 per cent said “they rarely buy anything with cash anymore.”

In that article, Rob Cameron of Moneris is quoted as saying ““I do think people will continue to use cash because it’s been around so long…. But this growth in contactless (payments using credit cards or mobile apps) I think is going to lead towards that end of cash.”

Figures from the Bank of Canada show that there is a trend away from cash. As recently as 2009, the bank reports, 54 per cent of transactions were made using cash. By 2013 that number dipped to 42 per cent and by 2017, 33 per cent.

“So, does this mean that Canadians are giving up on cash?,” asks the Bank of Canada. “The short answer is no. Canadians still rate cash as easy to use, low in cost, secure and nearly universally accepted, and it’s the preferred payment option for small-value purchases like a cup of coffee or a muffin.”

Well, maybe. Last word on the topic goes to economist Eswar Prasad, who tells CNBC that “the combination of cryptocurrency, stablecoins, central bank digital currencies (CBDCs) and other digital payment systems will lead to the demise of [physical] cash.”

The takeaway here is that all of us need to try and stay current with new trends. Cash is being joined by many other ways to pay. Even when we were out distributing poppies for the Legion in October we found that many people did not have any cash, or had to run to their cars and dig around for change. So, the Legion has begun to roll out “tap” poppy boxes.

Personally, we think cash will never entirely fade away. Think of big trends in music – punk, disco, progressive rock. Sure, you don’t see chart-topping music in those categories any more, but it is still being played, and in some corners of the globe, being developed.

No matter how you choose to spend it, you will appreciate having some form of currency when you retire. If you are saving on your own for retirement, consider the help of the Saskatchewan Pension Plan. The plan offers an end-to-end pension service; and once you are a member, you can contribute to your savings by cheque, through online bill payment, with automatic deposits, or even with a credit card. Be sure to 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.