Aug 25: BEST FROM THE BLOGOSPHERE

August 25, 2025

The key to retirement saving – start as soon as you can

Writing for Morningstar, Paul A. Merriman says saving for retirement is “easier than you think.”

“Time – lots of it – is your biggest ally,” he writes. And the process of saving for retirement, he insists, is “easier than they think… if they get a few things right.”

First, he suggests, “you’ve got to set aside money regularly, without fail.” Even small amounts will add up over time, and “you have to invest that money where it will work hard for you.”

And you have to start – right away, if you haven’t already, he adds.

“If you haven’t yet `got around to’ starting a retirement savings program, do it now. Start this very week, using whatever money you have. It will feel good to be on your way,” he explains.

Once you start, keep it going regularly “with a plan you can afford,” he adds.

“Get the long-term power of the stock market working for your savings right away,” he notes, and “find a way to make your savings automatic, so you don’t have to think about it every month or paycheque.”

Consider, he suggests, your “savings plan as if you were starting a business, along with a terrific business partner: the stock market.”

“Your job: Fund the business by regularly adding capital. Your partner’s job: Make that capital grow big enough so you can retire comfortably,” he writes.

He provides an example of the return rate someone would get if they put $1,000 a year into an index stock fund starting in 1985. If you increased your contribution by three per cent each year, he writes, “and kept doing it until the end of 2024,” you would have earned $4 for every dollar you contributed after 15 years.

You must factor in inflation as a consideration, he writes. So what’s a good amount to set aside each year?

“If you can set aside 10 per cent of your earnings each year and invest that money intelligently, you’ll be well on your way toward a comfortable retirement,” he writes.

“If you’re fortunate enough to work for an employer that matches some part of your contributions in a retirement plan, you’ll do considerably better than this table suggests,” he adds.

“The `magic’ in this scenario comes from doing what millions of people do all the time: They engage a willing and capable business partner (the market) in order to own stakes in hundreds (and in many cases thousands) of real-world companies,” Merriman writes.

“Every business day, employees of those companies show up for work. Managers figure out how to profit from that work. Executives plot to make sure investors get a share of those profits,” he continues.

“Your job as the `senior partner’ in this little business arrangement is to keep your focus on the big picture and the long term. If you do that and let your partner do its job, the long-term payoff can be huge,” he concludes.

Automating your savings, and ramping your savings rate up when you get a raise, are key pieces of the savings puzzle. Members of the Saskatchewan Pension can choose to make their contributions automatically. You can let us know (PAC-PCC-application.pdf) where you want your contributions to come from – either a bank account or your credit card. We’ll do the rest, and invest your savings in our professionally managed, low-cost pooled fund.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Morningstar

---

---