Most Canadians “financially prepared for retirement” if they stick to the plan: HEC

More than four-fifths of working households in Canada “would be financially prepared for retirement if their intended retirement age and saving strategies are realized,” according to research from HEC Montreal’s Retirement and Savings Institute.

Results of the study were covered off in a recent article on Advisor.ca.

“The report defines financial preparedness as households that can replace at least 65 per cent of their net income in retirement after taxes, transfers, savings and debt payments, or for households in the lowest income quintile, 80 per cent,” the article notes.

The study, the article continues, takes into account “both private and public sources of retirement income, with the latter being most important to middle and low-income groups.”

The research, based on data from 2022 is “little changed” from a previous study using 2018 data. “Only 18 per cent of households have less than an 80 per cent chance of being prepared,” the article notes.

Pension plans make a difference in retirement preparedness, the article continues.

“Prepared households are more likely to have a defined benefit (DB) pension plan, earn lower income and expect to retire later,” the article explains. However, the study says that the preparedness level could drop if “the generosity of DB pensions decreased…. in the next decades, it is possible that the coverage and generosity of DB plans will be eroded.”

OK – so who is most as risk for not being financially prepared for retirement? Let’s read on.

“Households most at risk of being unprepared have higher than median income and no savings, with a 52 per cent chance of being prepared for retirement. On the flip side, those earning below the median income who also have no savings have an 89 per cent chance of being prepared,” the article notes.

Let’s unpack some of this.

If you aren’t a high-income earner, government benefits will provide a pretty good replacement ratio of your pre-retirement income. Our late sister reported to us that she was actually better off once her Canada Pension Plan and Old Age Security benefits kicked in.

And she was right. For those making a modest income, the modest government benefits are pretty good, providing an income close to what you were making before. But those with higher incomes will find that CPP and OAS benefits, even at the maximum, are quite modest.

If there’s a pension plan available at your workplace, be sure to join it and contribute as much as you can. If you haven’t started saving for retirement on your own, and don’t have a workplace plan, the Saskatchewan Pension Plan (www.saskpension.com) may be just what you’ve been looking for.

With SPP, you decide how much to contribute, and SPP does the heavy lifting, growing your savings through professional investment in a low-cost, pooled fund. And when work is in the rearview mirror, SPP members can choose the security of a monthly annuity payment for life, or the more flexible Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Don’t trap yourself in these seven pre-retirement “money drains”

Those of us who have reached a certain vintage may remember the yuppie-era boast that “whoever has the most toys at the end is the winner.”

Not so fast, writes Vishesh Raisinghani for Money Canada.

“You probably know the importance of retiring with a hefty, well-diversified portfolio of assets. But what if you’ve spent some of your money accumulating things that look like ‘assets’ but are actually hidden liabilities,” he asks.

He then identifies these “tempting, but deceptive money drains that many people trap themselves in before retirement.”

Brand-new cars: “Splurging on your `dream car’ can be the ultimate temptation,” he writes. But a new car loses 30 per cent of its value after about two years, he continues. “Buying a modestly used car at an affordable price is a better way to secure your financial future,” he suggests.

Timeshares: Buying a timeshare to get winter access to a sunny beach is another tempting thought, he writes. “Timeshare ownership involves steep initial costs, recurring maintenance fees, low resale potential and rigid usage schedules,” he points out.

“On top of that, the secondary market is notoriously poor, and many owners struggle to exit their agreements. Sales tactics can be aggressive, and the contracts themselves are often complex and difficult to navigate,” he warns.

Luxury collectibles: “Luxury consumers are a fickle bunch and what’s considered valuable today may not be as valuable by the time you retire,” he notes. So, such items as “vintage cars, designer handbags and luxury watches” may not turn out to be the profitable investment you hoped for.

Buying a mansion or home upgrades: Canadians, he writes, collectively own a whopping $4.7 trillion in home equity. But, he warns, you can “go overboard” with home ownership. “Buying a house that is far beyond your budget or too big for your needs can make it tougher to pay off the mortgage or maintain the property when you’re on a fixed income. It’s also a good idea to avoid excessive and frequent renovations to try and add value to the property,” he notes.

Lottery tickets or speculative investments: Spending money on lottery tickets or “unproven and speculative investments” is particularly bad for “when you’re older and approaching the end of your career,” he writes. Instead of trying to get rich quick, get rich slow with “blue chip dividend stocks, bonds, or gold.”

Multiple or excessive mortgages: Those of us with more than one mortgage, or a big one on a rental property, should realize that as we age, our “capacity for risk is much lower,” he warns. “With this in mind, consider lowering or paying off all the mortgages on your rental properties. If you can’t, sell a few units to pay off the loans on others in your portfolio,” continues, adding that as “a retired landlord, you can’t afford a sudden housing market crash or interest rate volatility.”

These are all good points to keep in mind when you are entering your fixed-income years.

It’s important, as well, to realize that the more you put away for retirement today – in the now – the more wiggle room your future you will have to handle rising costs. If you don’t have a retirement plan at work and are spinning your wheels on saving for retirement, a trusty partner is the Saskatchewan Pension Plan. With SPP, all you have to do is contribute any amount (up to your registered retirement savings plan limit) each year.

SPP will invest your savings dollars in a professionally managed, low-cost pooled fund. When it’s gold watch time, your SPP income options include receiving a monthly annuity payment for life, or the more flexible Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

62 per cent of Canadians surveyed see homeownership as a key retirement strategy: HOOPP study

More than half of Canadians recently surveyed by the Healthcare of Ontario Pension Plan (HOOPP) said they “were depending on the sale of their home to put a retirement plan in place,” reports The Financial Post.

Relying on your home to provide retirement income is a strategy that has “issues” associated with it, the Post notes.

“Sixty-two per cent of people surveyed by HOOPP said homeownership is `a key part of their retirement strategy, either as a financial investment or a source of stability in retirement,’” the article states.

“Forty-four per cent of people said they were depending on the sale of their home to put a retirement fund in place, up from 42 per cent last year and 38 per cent in 2023,” the Post article continues.

“When people are younger, they have to save for two key assets in life, one being a house and one being retirement,” states Jennifer Rook, HOOPP’s vice-president of strategy, global intelligence and advocacy, in the Post article. “As the house becomes more expensive, you are kind of forced to choose a little bit more. What we are seeing is people are really still striving for the house and putting stock in (it),” she adds.

Surprisingly, one-third of survey respondents “said they would remortgage their homes to fund their retirement — the first time HOOPP asked that question in the seven years of the survey,” the article points out.

Planning to sell your house to pay for retirement costs is a move “that is a lot less certain than it was when you embarked on that path many years prior,” Rook tells the Post.

And having a mortgage to pay down – in retirement – is seen as a possibility by 65 per cent of homeowners surveyed. “They (the 65 per cent) are worried that they will still have a mortgage by the time they are ready to retire, up from 51 per cent in 2024 and 45 per cent in 2023,” the article notes.

And while the survey found 48 per cent are “worried about being able to afford their current or future mortgage payments,” a drop from 52 per cent last year, 62 per cent of those surveyed who don’t own a home “doubt they will ever be able to purchase a home based on current interest rates.”

“The survey said younger generations are more likely to be banking on homeownership to fund their so-called golden years, with 55 per cent of those aged 18 to 34 saying they are going to rely on their home to `set them up for retirement,’ compared to half of those aged 35 to 54 and 41 per cent of those aged 55 to 64,” the article continues.

“When you’re young, you think of things differently than you do as you get a bit older,” Rook tells the Post. “But it might also speak to the availability of a pension.”

“Perhaps that’s why 88 per cent of those surveyed by HOOPP said they would be willing to contribute regular instalments to a defined-benefit pension plan, which is structured to guarantee payments for life once you stop working,” the article concludes.

It’s a great closing point. Having a pension plan through your workplace is an excellent way to provide yourself with additional retirement income, over and above the modest benefits offered by the Canada Pension Plan and Old Age Security. If you have access to a pension plan at your workplace, be sure to join up and contribute to the max.

If you don’t have a plan through your work, have a look at the Saskatchewan Pension Plan. With SPP, you decide how much to contribute each year – we do the rest. We’ll invest your pension savings in our professionally managed, low-fee pooled fund. You can join as an individual, or – if you are an employer – you can leverage SPP as your company pension plan.

At retirement, SPP members have numerous options for turning their savings into income, including a range of lifetime annuity payment options or the more flexible Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Saving for a down payment seen as a barrier to home ownership: CPA Canada

One reason why younger Canadians aren’t able to save as much as they’d like for retirement may be the fact that they are struggling to save enough – first – to get into the housing market.

New research from CPA Canada and BDO Debt Solutions paints a gloomy picture of the struggles faced by those hoping to be homeowners.

“As rent prices outpace inflation and wages lag, one-in-three (32 per cent) Canadians say saving for a down payment is the biggest barrier keeping them out of the housing market,” states a media release from CPA Canada.

A further 30 per cent, the release continues, point to the “ongoing cost of mortgage payments” as an obstacle to home ownership. Only 10 per cent of those surveyed say they favoured the “flexibility of renting.”

“With 43 per cent of all respondents reporting the high cost of living as their top financial challenge—and another 14 per cent pointing to paying down debt—many Canadians are struggling to manage day-to-day expenses, let alone save for a home,” the release notes.

“Like sucking the oxygen out of a room, rising housing costs in Canada leave little left for consumers to spend in the overall economy,” states David-Alexandre Brassard, Chief Economist at CPA Canada, in the media release. “High down payments restrict access to real estate investments and exacerbate wealth inequality, leading to social consequences,” he states in the release.

High housing costs may also explain “the growing reliance on credit and shrinking emergency savings,” states Nancy Snedden, Licensed Insolvency Trustee and President at BDO Debt Solutions, in the release.

“The dream of owning a first home is slipping away for many Canadians. With the cost of living on the rise, saving for a home has become increasingly challenging,” Snedden states in the media release. “It’s concerning that only two per cent of non-homeowners in Canada are able to make their emergency fund a financial priority, while many are relying on credit to cover their expenses,” the release continues.

It’s creating a strange, divided society, the release adds.

“The results also reveal a clear generational divide: while three quarters (74 per cent) of Canadians aged 55 and older own their homes, that number drops to 63 per cent for those aged 35 to 54, and just 31 per cent for Canadians aged 18 to 34,” the release tells us.

Getting into the housing market is worth the effort financially, the release concludes.

“Homeownership is closely tied to financial stability and wealth accumulation,” states Li Zhang, Financial Literacy Leader at CPA Canada, in the release. “This is reflected in the behaviour of Canadians: homeowners are more likely to save for retirement and invest, while renters often live paycheque to paycheque. Only four per cent of renters report prioritizing lifestyle spending—most are simply struggling to cover the basics.”

Homeowners are more likely to be savers, the release concludes, with 28 per cent of them saying “the top financial goal is saving for retirement or long-term investments.”

It’s clear that homeownership is a greater challenge today than perhaps ever before. However, even if one’s focus is chiefly on getting money together for that downpayment, be sure to save something – even just a little bit – for your future, retired you.

The Saskatchewan Pension Plan does not, unlike most pension plans, have a set contribution rate. You can contribute, as a member, as much or as little as you want. When saving for that house, perhaps you keep your contributions low – once you are in that new home, maybe you can begin to start ratcheting up the contributions. SPP provides the savings flexibility that many of us need.

Check out SPP today!

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Five “big things” that disappear once you’ve retired

Many of us, when looking forward to retirement, imagine the things we will no longer need to worry about – long commutes in rush hour traffic, endless meetings, complex office politics, expensive parking. It’s a long list.

But, writes Chris Clark for Money Canada, in addition to things you won’t miss, there are some “big things” you will miss once you’re retired.

First, notes Clark, is “the financial safety of your paycheque.”

“The most immediate change when you retire is the loss of your steady income. For years, your paycheque arrived on a set schedule. In its place, you’ll rely on withdrawals from your registered retirement savings plan (RRSP), Tax Free Savings Account (TFSA), Canada Pension Plan (CPP), Old Age Security (OAS) and any other savings, pension plans or investments you’ve built up over time,” Clark writes.

This is so true – instead of one biweekly or semi-monthly paycheque, you’ll be getting multiple sources of income that may come on different days, primarily monthly.

Clark observes that most of us find this transition “jarring,” and suggests – for those of us living on a lump sum of savings – that we be cautious about picking a sustainable withdrawal rate.

“The traditional “four per cent rule” has been debated in recent years, with some experts suggesting a lower withdrawal rate for longevity,” Clark writes.  “Diversifying income streams through investments, rental income or part-time work can also help ease financial stress,” the article continues.

A second thing that disappears when you retire, Clark notes, is “your risk tolerance.”

When you’re young and have years – or decades — to go before retirement, and the likelihood of raises and bonuses on the way, “taking risks with investments can feel manageable because you’re still earning and contributing.”

“But in retirement, market downturns have a bigger impact on your portfolio and your ability to withdraw funds safely. This is known as the `sequence of returns risk’ — when early withdrawals during a market downturn deplete savings more quickly than anticipated,” Clark warns.

While you can minimize downsize risk by increasing your portfolio’s exposure to “guaranteed investment certificates (GICs) and bonds,” Clark notes that trying to eliminate all risk “can lead to another risk – outliving your money.”

Clark recommends a balanced approach, with exposure to both equities and bonds, in retirement.

For many of us, a thing that disappears when we retire is our “sense of purpose,” Clark notes.

“A study by the National Library of Medicine found that lacking a sense of purpose can lead to depression, substance use and self-derogation. Social isolation is also a growing concern, particularly for men, who tend to have fewer social connections outside of work; The Government of Canada states how 30 per cent of seniors are at risk of becoming socially isolated,” the article notes.

Plan “beyond your finances,” advises Clark. “Volunteering, pursuing hobbies or even taking on part-time work can help create structure and fulfillment,” the article adds.

Another factor that can become very significant as you age, is the fact that your employer-sponsored benefits may end when you retire, writes Clark.

“Prescription drugs, dental care, vision care and long-term care costs can add up quickly. A report from Innovative Medicines Canada found that nearly 70 per cent of Canadians — or more than 27 million — rely on employer-sponsored health plans for supplemental coverage.”

Clark recommends either setting aside money in advance for expected healthcare costs in retirement, or looking for your own provider; the article recommends the use of PolicyMe, a tool to help connect you with benefit coverage.

Last and importantly, one thing that changes when you retire “is your spending habits,” Clark tells us.

“Many retirees enter what financial planners call the `retirement honeymoon’ phase — travelling more, dining out frequently and taking on expensive hobbies. While this newfound freedom is well-deserved, it can lead to financial trouble if spending isn’t balanced with long-term needs,” Clark notes.

This is so true. Many feel retirement will be like being on vacation forever. But that would be crazy expensive, like travelling for 52 weeks at a time. We feel retirement is more like it permanently being the weekend. You have to consider that your money will have to last you a long time – many of us are now retired for as long as we worked.

Members of the Saskatchewan Pension Plan have a retirement option that will prevent them from running out of savings in retirement. SPP members can choose to convert some or all of their savings into a life annuity. This means you’ll get a payment on the first of the month for as long as you live. Depending on what type of annuity you choose there may also be benefits for a surviving spouse or beneficiary.

Check out SPP today!

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Only 36 per cent of Canucks confident they will “maintain financial stability in retirement”

A mere 36 per cent of Canadians feel they will be financially stable in retirement, according to a new poll for Bloom Finance carried out by Angus Reid.

The poll’s results were covered recently in a Toronto Sun article by Jane Stevenson.

While seven per cent of respondents “say they feel very confident” about their post-retirement finances, “27 per cent say they’re not confident at all, and another 37 per cent feel only slightly confident,” Stevenson’s article notes.

Other poll findings reported by the Sun article:

• “46 per cent say that increasing Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) is the financial relief measure that would be the most helpful in retirement.”
• “67 per cent ranked OAS and GIS in their top two most helpful financial relief measures.”
• “Increasing tax-free earnings for working seniors (39 per cent) and maintaining the current OAS and GIS (35 per cent) were the next most popular measures.”
• “The top expected sources of retirement income for Canadians are Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) (72 per cent), personal savings (69 per cent) and OAS and GIS (61 per cent).”

With nearly three-quarters of Canadians thinking CPP/QPP and OAS will be their top source of income, it’s important to realize these programs provide a fairly modest benefit.

According to the Government of Canada’s own website, the maximum CPP benefit anyone can receive this year is $1433 per month. However, the same site notes that the average amount being paid to new beneficiaries this year is $899.67.

You have to have worked for a very long time in Canada, and have contributed the maximum CPP contribution for all of those years, to get the full benefit.

For those age 65 to 74, the maximum OAS amount is $727.67, another government website notes, while for those 75 and over it is $800.44.

If there’s a takeaway from all these numbers, it’s this – those among us who think the CPP and OAS may be their top source of retirement income may not be aware that the most they can get from these sources is currently just over $2100 a month.

That’s a fairly modest figure. If you have a retirement program at work, be sure you are contributing to it as much as you can.

If you’re saving on your own for retirement, consider partnering up with the Saskatchewan Pension Plan. SPP is an open, voluntary defined contribution plan. Any Canadian with available registered retirement savings plan room can sign up. Once you are an SPP member, you decide how much you want to contribute each year, and SPP does the heavy lifting, investing your savings dollars in our low-cost, professionally managed pooled fund. When it’s time to retire, your choices include a lifetime annuity payment each month, or the more flexible Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Two things Suze Orman feels we need to “get honest about” in our savings efforts

Writing for GoBankingRates, Laura Bogart reports that most people are “feeling a financial crunch” and are “tired of hearing that if you would only give up avocado toast, you’d instantly have enough money to retire on.”

Her article quotes well-known financial commentator Suze Orman as citing two basic things that people need “to get honest about” if they truly want to get their savings on track.

Orman, the article notes, felt “sad and concerned” when a recent CNBC survey found that “less than half of all workers feel even cautiously optimistic about having a secure retirement.”

“I am fully aware that for many households, the lack of optimism is not because of bad choices — spending too much, borrowing too much — but more a function that the cost of just getting by each month can make it hard to save more for retirement,” Orman is quoted in the article as having stated.

However, she states in the article, even if “times feel tough through no fault of your own,” we all need to “buckle down and get back on track with retirement savings.”

And it all starts, she states in the article, with “getting honest with yourself.”

Her first question is this – “are you really prioritizing your needs over your wants?”

She issues, in the article, this challenge: “No lip service, or casual commitment. I want you to carefully stop yourself every time you are about to spend money and ask yourself: Is it for a need or a want?”

Try this, she states in the article, for three months. “Be ruthless in asking yourself whether you really need to spend money on something or if it’s just to keep up with the Joneses. If your kids come begging for concert tickets or the latest smartphone, say no — no matter how hard it may be. You owe your children love and support, not front-row seats to the hottest show in town,” the article explains.

And, when you do spend, maybe it’s time “to consider reaching for a cheaper store brand or shopping at more budget-friendly outlets” rather than loading up on expensive “brand-name organic food,” the article continues. If you can, pick the least expensive option when shopping for cars and other major purchases, GoBankingRates advises.

When it comes to savings, Orman states in the article, “every $10, $20, $50 matters.”

The other key thought from Orman, the article continues, is this – “are you saving everything you possibly can?”

“If you are currently saving six per cent of your salary in a retirement account, change it to seven per cent, and set a calendar alert to bump that to eight per cent in six months,” she is quoted as saying in the article.

Other advice from Orman cited in the piece includes adding an extra $50 to your minimum credit card payment. Small changes – saving more, paying down debt faster – will add up, the article continues.

“Make sure you’re spending only on needs, not wants, and at the same time, save, save, save as much as you can. It’s really that simple,” the article concludes.

The idea of gradually increasing your retirement savings rate by small increments is an achievable one for members of the Saskatchewan Pension Plan. SPP allows you to decide how much you want to contribute to your retirement nest egg – you can set up pre-authorized contributions from your bank account and can ask us to increase them whenever you want. More contributions increase your savings nest egg, which is win-win for your future you.

Check out SPP today!

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What to do if your savings have dried up – and you are still going strong

A recent article from MoneySense explains that even if we outlive our savings, we still have some options.

Not everyone, the article begins, is able to save for retirement, or has some sort of pension program at their workplace. The article cites the example of Cheryl, 60, “a single parent with low income” who suffered a workplace injury and is now receiving modest Ontario Disability Support Program benefits.

Or Shannon, who along with her husband works full time, but is struggling to make ends meet, the article continues. “We have good educations and somewhat good jobs,” she tells MoneySense, “but at the end of the month, there’s not much left over.

“Canadians today are living longer than previous generations, and not everyone has the financial means to support themselves throughout retirement. According to the latest data from Statistics Canada, six per cent of Canadian seniors lived below the poverty line in 2022. And at present, nearly eight per cent of food bank clients are seniors,” MoneySense reports.

So what should you do if you have run out, or are running out, of savings? MoneySense has some suggestions.

Be sure, the publication advises, to file your income taxes on time. “If you’re a low-income earner who isn’t filing their taxes, you’re missing out on all sorts of benefits. It’s one of the worst things you can do financially,” certified financial planner Jackie Porter tells MoneySense.

For example, low-income seniors who file their taxes on time are “automatically enrolled for the Guaranteed Income Supplement starting at age 65 and receive tax-free payments on a monthly basis.”

Next is budgeting – do you have one and are you sticking to it, the publication asks.

“Take a good look at your budget and cash flow,” MoneySense suggests. “Answer this question: does your income (including Canada Pension Plan and Old Age Security and other government payments) cover your fixed and variable expenses? Expenses can include rent or mortgage payments, insurance premiums, car payments, groceries, entertainment, etc. If your income falls short of your expenditures, establish a budgeting goal based on the gap that you’ve identified,” the publication continues.

OK – be sure you are signed up for any government programs and are spending less than what you bring in. What other thoughts does MoneySense have?

Low-income homeowners might want to consider a reverse mortgage, the publication reports.

“Here’s how it works: If you’re 55 or older, you may be able to borrow up to 55 per cent of your home’s appraised value. These funds are tax-free and can be received in a lump sum or monthly installments. Interest is charged on all borrowed funds, but the balance isn’t typically due until the home is sold or until the last surviving homeowner dies (whether that’s you, your partner or a property co-owner),” MoneySense advises.

You may, the publication continues, be able to access some of the cash value in your term or whole life insurance policy. “Cashing out the policy means you’ll have some money but no life insurance, while borrowing against the cash value means you’ll get a loan while retaining the policy,” MoneySense notes, adding that those considering this option should first seek professional advice.

There’s a way to take some or all of your savings to produce an income stream that won’t run out – converting savings to a lifetime annuity payment. This is an option for retiring members of the Saskatchewan Pension Plan. With an SPP annuity, you’ll receive a monthly payment for life, and depending on the option you choose, your surviving spouse or beneficiary may be eligible for benefits when you pass away.

Check out SPP today!

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Planning, spending and social connections called keys to retirement success

Writing for Yahoo! Finance, Robert Powell outlines what he feels are the key steps to having “a happy, successful and wealthy retirement.”

He quotes Christine Benz, author of How to Retire, as noting that you need to “visualize your retirement lifestyle and put habits in place to make it happen.”

“The point is that we’re all wired a little bit differently in terms of what we want from our retirement cash flows,” Benz tells Yahoo! Finance. “A broader message of this book is there’s more than one way to do this. … You should give a little thought to what you specifically are looking for.”

We recall, at another pension plan we worked for, hearing the anecdote that if you asked 100 people what an ideal wedding would look like, you would get 100 different answers. The same would be true, we were told, if you asked them to describe retirement.

Benz shares in the article some of the insights she learned in putting together her book.

She notes that “phasing into retirement” rather than leaping in, may be the best approach. “You don’t have to take concrete steps; you can just start thinking about which parts of your work you like and dislike,” the article explains.

“Consider making decisions about your work life in the years leading up to retirement, either in `stealth mode’ or through candid discussions with your employer. Then, take additional steps, such as saving contact information and personal files from your work computer,” the article continues.

And, maybe you start “dabbling” in post-retirement activities early, “before fully retiring,” the article suggests. It’s important to realize, the article stresses, that you need to have something concrete planned to do in the new, expansive swath of free time you’ll soon have.

Benz notes that Michael Finke of the American College of Financial Services told her in an interview that “retirement is not all about relaxation, leisure activities, and free time. After all, you need something to relax from.”

Finke’s advice, she relates to Yahoo! Finance, is to “find an `animating force’ that provides a sense of purpose in retirement, such as volunteering, continued work in some capacity, or reengaging with family.”

Another finding, Benz relates, was the value of social connections in retirement. She learned about that, the article notes, from interviews with Laura Carstensen of the Stanford Center on Longevity.

You will, the article explains, need to build “day to day interactions” with people after work. “Make sure that you are replacing work friendships with friendships outside of work because those work friendships may not stand the test of time,” Benz tells Yahoo! Finance.

“It’s OK to have your network shrink a little bit as you age,” she states in the article, adding that “you don’t want that social network to get too small. You don’t want to be down to just, say, two or three people.”

Another area of post-retirement success is on the spending side, the article notes. There’s the problem of the “spending smile,” referring to the shape of the post-work spending pattern – it tends to drop off early in retirement but then builds near the end due to possible long-term care costs.

Benz quotes Dave Blanchett of PGIM DC Solutions as saying he’s a believer “in people giving themselves a little bit of permission to spend more earlier on.” People tend to try and avoid spending in retirement, the article notes, because after a lifetime of saving for retirement, it is strange to have to draw down the savings.

The article concludes with a look at asset allocation for post-work savings. She quotes J L Collins, author of The Simple Path to Wealth, as suggesting using “a simple index-fund based portfolio with a bit of cash, focusing on stock and bond market indexes, rather than overly complicated investments.”

There’s a lot to like, she states in the article, about a simpler, minimalistic approach.

For Saskatchewan Pension Plan members reaching retirement age, there are a number of income options that turn savings into spendable money. SPP’s lineup of annuity options will provide the retiring member with income for life. If you want to keep on investing your savings, the Variable Benefit option may be a more flexible choice.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Are retirement parties becoming a thing of the past?

We remember it well. After a little over 20 years at work, we turned in our security pass and headed for retirement. And to cap it all off there was a nice party in Toronto with work colleagues and friends. A great memory.

But, according to The Globe and Mail that retirement party in 2014 may well be a relic from a bygone era.

Take the example of B.C.’s Linda Lawrence, the newspaper suggests.

“The former marketing and communications professional planned to retire in June, but her role was suddenly eliminated last year when her employer was purchased by investors in the United States. She found out on an online call,” the Globe reports.

“After briefly considering finding a new job, Ms. Lawrence decided to retire early,” the article continues.

“Months later, the B.C. resident, now 60, says she has struggled with reconciling how her 30-year career ended with zero fanfare. She had long looked forward to celebrating her retirement in the company of loved ones and colleagues like her parents had, but that didn’t happen,” the Globe notes.

“I couldn’t wrap my head around it,” she tells the Globe. “I felt cheated.”

It’s not an uncommon feeling, the article continues.

“While a workplace retirement party was once seen as a rite of passage marking the end of one’s career and the start of a new chapter, many departing employees are leaving without sheet cakes and novelty-sized farewell cards – and with a lack of closure,” the article explains.

Retirement coach Marilyn Hintsa tells the Globe the retirement party “is a tradition that appears to be waning.”

“People retiring now have lower expectations about what happens when they retire. I think it’s unfortunate that it’s happening, especially if you put in a lot of years with that employer,” she tells the Globe.

“If Wednesday is your last day at work, Thursday is your first day of retirement, and there’s not some line that’s drawn between that, the first day will be tough,” she states in the article.

Why is the tradition changing?

The Globe cites a number of factors, such as “shorter average job tenures” and the rise of remote and hybrid work. Shrinking company budgets, where the onus is on employees to pay for gifts and parties rather than the company, is another factor.

A smaller party is better than no party, the article suggests.

Last word to B.C.’s Linda Lawrence, who believes “organizations should play a role in recognizing retirees’ contributions and wishing them well in their new chapter.”

“What does it cost to send an email,” she asks.

Whether or not you get a gold watch or a slice of cake, retirement is still something to look forward to, particularly if you have retirement savings.

If you don’t have a workplace pension, fear not. The Saskatchewan Pension Plan has a do-it-yourself, voluntary defined contribution program ideal for individuals or organizations. You determine how much you want to contribute, and SPP does the rest, investing your savings dollars in a low-cost, professionally managed pooled fund. And when it’s time to start life after work, your SPP options include the chance of a lifetime monthly annuity payment, or the more flexible Variable Benefit.

Check out SPP today!

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