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OCT 3: BEST FROM THE BLOGOSPHERE

October 3, 2022

Canada no longer a top 10 country for retirement security: Natixis survey

A “decline in financial well-being and happiness” is cited among the reasons why Canada is no longer a top 10 nation in retirement security.

Writing in the Financial Post, Victoria Wells reports Canada has dropped to 15th place (from 10th place last year) on the Natixis Investment Managers ranking of the countries that offer the highest level of retirement security.

“The main reasons for the drop, Natixis IM said, are a decline in financial well-being and happiness, increased tax burdens, a rapidly aging population and environmental factors, such as a lack of biodiversity,” Wells reports.

She further notes that this dip in retirement security levels coincides with “soaring inflation, aggressive interest rate hikes and a wobbly stock market,” all factors making 2022 “one of the worst years ever to retire.”

In the article, Dave Goodsell of Natixis notes that the study found 65 per cent of Canadians surveyed are “underestimating their life expectancy,” and “61 per cent haven’t considered how much inflation will impact their finances.” A further 60 per cent, he states in the article, “aren’t planning for additional healthcare costs” as they age.

Another problem for the retirement system, the article reports, is the strain on the Canada Pension Plan (CPP) system as “the number of seniors boom in relation to younger workers who pay into CPP.”

“Investment strategies, financial planning, employee benefits and policy considerations will all need to factor in a new funding equation that accounts for inflation, interest rates and increased longevity,” Goodsell states in the article.

The top three countries for retirement security are Norway, Switzerland, and Iceland, the article concludes.

Another factor not noted in this article is the huge increase in retirements in this country. The Peterborough Examiner reports that retirements are up 50 per cent in Canada versus last year. The Examiner cites Statistics Canada data from August that showed 307,000 Canucks had retired in the last 12 months, versus 233,000 a year earlier.

As well, the Examiner article reports, 12.9 per cent of Canadians say they are planning to leave their jobs for retirement soon – that figure again is from August of this year.

So, summing it up, a record number of Canucks are heading out of the workplace for the last time, despite the fact that markets are unstable, inflation is at decades-high levels, and interest rates are soaring – the latter bit of news being good for savers but bad for debtors.

It’s worth noting that the CPP has a massive contingency fund, run by CPP Investments, that currently has $523 billion in assets according to a recent news release. So if we ever do get to a point where the contributions to CPP made by workers aren’t enough to pay CPP pensions, there’s a large keg of money that can be tapped at that time.

However, it’s best to have multiple streams of retirement income to rely on in the future. If you have a workplace pension you are ahead in that game. If you don’t, or want to augment your overall savings, a helpful tool is the Saskatchewan Pension Plan, a defined contribution plan that’s open to any Canadian with registered retirement savings room. Contributions you make to SPP are pooled, invested professionally at a low cost, and are grown prudently until you are ready to convert savings to retirement income. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


SEPT 26: BEST FROM THE BLOGOSPHERE

September 26, 2022

Canadians “retiring in droves,” with nurses and truckers leading the way

For decades, economists and pundits have predicted that a “grey tsunami” of boomer retirements would cause all kinds of collateral damage, such as increased healthcare costs and hikes in government spending on things like Old Age Security.

Well, according to Reuters, we may be about to find out if those decades-old predictions might come true.

The Reuters article calls it The Great Retirement.

“Canada’s labour force grew in August, but it fell the previous two months and remains smaller than before the summer as tens of thousands of people simply stopped working. Much of this can be chalked up to more Canadians than ever retiring,” the Reuters article reports, citing data from Statistics Canada.

And, the article continues, it’s not so much older Boomers who are hitting the silk on work, but “a record number of Canadians aged 55 to 64” who have retired in the last year.

“That is hastening a mass exodus of Canada’s most highly skilled workers, leaving businesses scrambling, helping push wages sharply higher and threatening to further drag down the country’s sagging productivity,” Reuters adds, citing the views of economists.

“We knew from a long time ago that this wave was coming, that we would get into this moment,” states Jimmy Jean, chief economist at Desjardins Group, in the Reuters article. “And it’s only going to intensify in the coming years.”

“The risk you have, and in some sectors you’re already seeing it, is that people are leaving without there being enough younger workers to take over. So there’s a loss of human capital and knowledge,” Jean tells Reuters.

Another slightly alarming stat revealed in the Reuters piece is that those of us who are still working are older, with one in five Canadian workers being age 55 or older. So there are many, many more workers who are entering the retirement zone.

So who specifically is retiring? Reuters says nurses and truckers are leading the way to the exits. An eye-popping 34,400 folks have retired from healthcare jobs since May, the article reports, and the Ontario Nurses’ Association’s Catherine Hoy says many of these retirements were unexpected.

The pressure on healthcare workers, particularly nurses, was intense during the pandemic – and the same is true for truckers, the article notes.

Older truckers – who, like nurses, were crucial workers during the early pandemic years – are leaving the profession, creating vacancies and a huge demand for new blood in the field. Many truckers are hired right after completing their training, the article notes.

“Without trucks and people to drive trucks … goods will sit at ports and in warehouses as opposed to getting to the destination where they can be consumed,” warns Tony Reeder of Trans-Canada College in the Reuters article.

This is a very revealing article. We have noticed that almost everywhere we go, help wanted signs are out. As well, you see certain places – local restaurants are an example – that have cut back their hours due to a lack of staff. It will be very interesting to see how this wave of Boomer retirements plays out – hopefully it will create the chance for better jobs for younger people.

You can’t, of course, contemplate retirement without having some sort of plan to finance your golden years. There are many ways to save, including workplace pension programs, but not every Canadian has access to a pension. If you are looking for a way to save on your own for your work-free future, take a look at the Saskatchewan Pension Plan. It’s available to any Canadian with registered retirement savings plan (RRSP) room.

With SPP, you can contribute any amount you want (up to $7,000 per year), and you can transfer up to $10,000 from other RRSPs into SPP. SPP’s role will be to grow your savings for you via low-cost, pooled investing. And once you’re ready to escape the work world, SPP has several options for your retirement income needs, including the chance of getting a lifetime monthly annuity payment. Check them out today!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


SEPT 19: BEST FROM THE BLOGOSPHERE

September 19, 2022

Focusing on what can go right in retirement

We’ve read, endlessly, about what can go wrong in retirement – running out of money, inflation eating away the value of your income, and so on – so today Save with SPP decided to focus instead on what can go right with retirement.

It’s not as easy to find good news on the subject, but an article from a few years ago from Sun Life looks in detail at retirement success.

The article cites a poll taken last decade as indicating that “having an active lifestyle” is most important to “Zoomers,” defined as those aged 45 plus.

“Today’s retirees aren’t spending their days in front of a TV. They’re walking, running, travelling, returning to school, volunteering and working part-time,” the article states.

The article looks in detail at the retirement life of Dennis Watson and his wife Sue Lamb. Dennis tells Sun Life that for him, retirement is “sleeping in, reading more, golfing more and travelling,” adding that “life’s good.”

What did he credit for his retirement success story? Planning. “People don’t plan to fail, they simply fail to plan,” he notes in the article.

Here are the key elements of his plan.

First, he started saving early. “Starting with my first part-time job, I saved about $1,000 a year, putting money every month from my pay into my tax-sheltered registered retirement savings plan (RRSP),” he tells Sun Life. He said that even putting a little money away each year will add up after four decades, the article continues.

Dennis also “borrowed money to max out my annual RRSP contribution” and “used my income tax refund to pay down my mortgage.”

As his savings grew, he began to invest his money in “quality stocks – banks, insurance, telecommunications companies,” and made sure his family was adequately covered by insurance, the article adds.

As he got near the end of his working life, he consulted a financial planner to set out his retirement plan, the article tells us. That gave both he and his wife Sue a full outline of the assets they have, the investments and the income they produce, their insurance company, and a look at all sources of retirement income, well in advance of the golden handshake, the article states.

“Retirement is the next stage in life. Embrace it, and enjoy it for all it’s worth. Life isn’t a dress rehearsal, so don’t go to the grave wishing you had done that one thing you always wanted to do. I worked hard for 40 years, so that I could enjoy the next 20 years — or more!” he tells Sun Life.

There’s a lot of positive information here. We like the twin ideas of systematic, regular retirement savings contributions and the idea of using tax refunds to plunk extra down on the mortgage (or other debt).

The takeaway is that if you start small, and later, begin to try and max out on your RRSP contributions, over time you will have a sufficient nest egg and can plan your exit from the work world.

Knowing what you’ll get from other sources, such as workplace or government pension plans, is also part of the puzzle.

People worry they won’t be able to get by on less money in retirement, but overlook the fact that they will almost always be spending less, and paying less taxes. Look at the net income you’ll get in retirement and compare it to the net income you are getting now – that’s a more realistic comparison.

If you don’t really know about investing (or don’t want to learn), a retirement savings option to consider is the Saskatchewan Pension Plan. With SPP, you decide how much to contribute – you can start small and work up to the maximum contribution of $7,000 per year. Mrs. Save with SPP borrowed money for her SPP – she put the money in a simple RRSP savings account to get the tax credit, and then transferred it to SPP the next year.

SPP will look after the tricky investing part, and will do so at a low cost, typically less than one per cent per year. At the time you turn in your ID badge, SPP will present options for your retirement income, including in-house lifetime annuities to choose from. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


SEPT 12: BEST FROM THE BLOGOSPHERE

September 12, 2022

Some clever ways to tuck away more money in your retirement piggy bank

Writing for the GoBankingRates blog, Jami Farkas comes up with some “clever” ways to save more for our collective retirements.

First, the article suggests, use an online calculator to figure out how much you need to save. There are plenty of these, and the Saskatchewan Pension Plan’s own Wealth Calculator can show you how much your savings can grow.

Next, the article urges, make savings automatic. “Don’t give yourself the option of whether to set aside money each month. Automate your savings so it’s not a choice,” the article suggests, quoting David Brooks Sr., president of Retire SMART. This option is available to SPP members too – you can arrange to make pre-authorized contributions to your account.

If you are in any sort of retirement arrangement at work, be sure you are contributing to the max, the article notes. And if there is no employer match to your retirement savings, “set up your own match” by giving up a cup of coffee daily, the article suggests.

Once you’ve started automatically saving for life after work, be sure to bump up your annual rate of contributions every year, the article tells us. “A 25-year-old earning $40,000 a year who contributes just one per cent more of his salary each year (or $33 more each month) until age 67 would have $3,870 of additional yearly income in retirement, assuming a seven per cent rate of return and a 1.5 per annual pay raise,” the article explains.

It’s the same, the article continues, for raises. If you get one, so should your retirement savings – stash some or all of it into savings. “Since workers are already accustomed to living on their existing salary, they won’t notice money that they never had before is missing,” the article explains.

We’ll Canadianize the next tips – consider putting some or all of your tax refund back into retirement savings, such as your SPP account or a Tax Free Savings Account (TFSA). A few of the ideas for saving in this article, intended for a U.S. audience, aren’t available here, but remember that SPP operates similarly to a registered retirement savings plan, so contributions you make to it are tax-deductible. If you put money in a TFSA, there’s no tax deduction but as is the case with both vehicles, your money grows tax-free. And with a TFSA there’s no tax payable when you take the money out.

Other ideas – don’t downsize after you retire, but before when you can more readily afford to move, the article suggests.

Spare change can power your savings, the article adds. “Tossing spare change in a jar might seem like an old-fashioned approach to saving, but you’d be surprised how quickly your nickels, dimes and quarters can add up,” the article notes. Do the same with any money you save on purchases using coupons or apps, we are told.

We’ll add one more to this list. If you get a gift card that can be spent like cash anywhere, why not add it to your SPP account? SPP permits contributions to be made from credit cards, so it’s a nice way to turn a gift, or a rebate, into retirement income for your future self.

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


AUG 29: BEST FROM THE BLOGOSPHERE

August 29, 2022

Inflation “stoking fears” about retirement among Brits: study

The decades-high level of inflation is driving a wave of “retirement anxiety” in the United Kingdom, a new study has found.

The study is covered in an article in The Independent, posted on the Yahoo! site.  

The study, carried out for arbdn, an asset manager, found that “54 per cent of over 40s already feel anxious about retirement,” and that those aged 40-44 are even more worried about retirement, with 61 per cent experiencing anxiety.

What are they worried about?

The article cites general worries about “rising bills, inflation, and not having enough in their pension pots.” Other concerns about retirement included “being labelled ‘old’ or losing their identity when they stop working.”

“Retirement anxiety is an emotion of concern or worry, experienced by people yet to retire, about the prospect of retirement,” psychologist Dr. Linda Papadopoulos tells The Independent. “This could be a concern about how they will fill their time, financial worries or perhaps feeling a loss of identity.”

The article suggests that inflation – which is higher than in Canada, having crashed through the 10 per cent barrier there – is driving the wave of anxiety.

Next, the article offers up some things that folks in their 40s can do now to help address the new problem of retirement anxiety.

First, The Independent reports, is the need to plan.

“No matter how many years or decades you are from retiring, it’s never too soon to start planning,” the article suggests. In the story, Dr. Papadopoulos suggests people start thinking about the financial health the way they think about their physical health.

“It’s interesting that when it comes to our finances, we don’t take many steps to help protect our future self,” she states in the article. “I’d encourage people to think about their new beginning (in retirement). What do they want to learn, what might they have not focused on due to work that they could now focus on?”

Other steps the article suggests are seeking the help of a professional financial adviser, and also to “focus on the positives” of retirement.

“Often people are afraid about getting old, feeling lonely and struggling to make ends meet, but there are so many positives to retirement too,” states psychotherapist Lindsay George in the article.

“You will have more time to explore new hobbies, try new things and reconnect with old friends. Rather than seeing retirement as cutting off your possibilities, you could look at it as an opportunity for you to make more new opportunities in your life,” she tells The Independent.

The article concludes by suggesting that continuing to work past usual retirement age – or working part time – is a way to address fears about having enough money. Another important step is to talk about your retirement fears, either with friends or family or a mental health professional, to help address any “irrational thinking” your anxiety may have created.

It goes without saying that the financial side of retirement needs to be addressed. If you are among the minority of Canadians with a workplace pension plan, you are ahead of the game on the retirement income front. If you don’t have a plan, and are facing the prospect of saving and investing on your own for retirement, consider the Saskatchewan Pension Plan. SPP will help you grow your savings through low-cost professional investing, and at retirement, you’ll have the option of receiving one of several lifetime annuity options. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


AUG 22: BEST FROM THE BLOGOSPHERE

August 22, 2022

U.S. study links health, happiness to sound financial planning

We’ve often heard how things like rising interest rates and market volatility “keep us up at night.”

But, reports Gabrielle Olya, writing for GoBankingRates via Yahoo!, a new study out of the U.S. suggests that there’s actually a link between having a good financial plan and happiness – as well as being able to sleep at night.

The Northwestern Mutual 2022 Planning & Progress Study found that “people with financial plans and those who work with financial advisors are happier and sleep better than those who don’t plan or work with advisors,” she writes.

The numbers she reports on from the study are indeed eye-openers.

“Eighty-seven per cent of Americans surveyed who work with financial advisors reported that they are very or somewhat happy, as did 84 per cent of those who considered themselves disciplined planners,” the article notes. Those numbers drop to 72 per cent for those without financial planners and to 68 per for those who aren’t following a plan.

And then there’s the whole sleep thing.

“Eighty-one per cent of Americans who work with financial advisors said they sleep well or very well, and 76 per cent of disciplined planners said the same. Among people who don’t work with financial advisors, 65 per cent said they sleep well or very well, and that percentage dropped to 62 per cent for informal planners and non-planners,” Olya writes.

“As we dug into the results, we saw that people who have an advisor or identify as a disciplined planner reported being happier and sleeping better. This signalled to us that there is a clear link between financial wellness and overall wellness,” states Northwestern’s Christian Mitchell in the article.

He further states that having a plan and/or working with an advisor “eliminates a lot of the uncertainty surrounding your finances and allows you to feel more confident about your complete financial picture. This clarity can help create peace of mind and even lead to increased happiness and better sleep.”

The article concludes by outlining some steps those of us who aren’t using an advisor, or following a plan, can take – “setting a budget, reducing spending or paying down debt.” As well, focusing on long-term goals – “such as buying a house or saving for retirement” can be a positive step.

Perhaps we can take away from this article – thinking chiefly of retirement savings – that those of us who have either a plan or a strategy for handling this long-term goal may feel happier/healthier than those who don’t have a plan.

As we’ve seen, the majority of Canadians don’t have any sort of workplace pension or retirement arrangement. That means the responsibility for retirement savings falls squarely on their own shoulders. If you want someone to help carry the ball for you, consider the Saskatchewan Pension Plan. Through SPP’s open, voluntary defined contribution model, you contribute the savings, and SPP takes on the tricky part – investing your money, growing it, and getting ready to turn it into future retirement income. Leave the heavy lifting and stress to SPP; get them working on your retirement strategy!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


AUG 15: BEST FROM THE BLOGOSPHERE

August 15, 2022

Is inflation eating up Canadians’ COVID-19 savings?

Back when COVID-19 restrictions had many of us sitting at home with little to spend our money on, economists and financial observers began talking about how the barriers to spending (no travel, fewer goods and services to buy) would create a monster pandemic savings pot.

And they were right, it did. But now, reports Jason Kirby in The Globe and Mail, that giant horde of unspent cash could be getting devoured by an unexpected new entity – inflation.

“Average household net savings fell 44 per cent to $1,900 in the first quarter from the year before, according to Statistics Canada’s latest release of household economic accounts broken down by income and age,” he writes. While all income groups saw their savings fall, the article notes that those with the lowest incomes saw the biggest decline.

A graph in the article shows that as recently as spring of 2020, the average Canadian household had upwards of $5,500 in savings. That means we’ve experienced a drop of nearly two-thirds in household savings.

The article says that the savings dip is not totally bad news.

“The good news, as far as spending continuing to fuel the recovery, is the average household still has more savings than they did before COVID-19 hit and governments ramped up income support programs,” the article tells us. “Stats Can data show the average household still holds 63 per cent more in net savings than before the pandemic, even though that amount has shrunk by more than two-thirds since the second quarter of 2020,” the piece reveals.

But while the wealthier among us “have a far better ability to absorb the shock of rising prices for goods and services,” lower-income folks are having a far tougher time.

For the lowest income bracket, the article notes, “the average household in that group has negative net savings — meaning they spent more than their disposable income — and are further behind than they were before the pandemic.”

Falling into a situation where you spend more than you earn – and are living on debt – is made even more perilous by those rising interest rates, reports The Financial Post.

“Canadians who took out mortgages for 4.5 times their gross income — a not uncommon practice when housing prices shot up during the pandemic — could see payments increase by $187 to $281 from 2022 to 2024, which would absorb as much as 2.6 per cent to four per of their net income,” the article states, quoting a recent study authored by National Bank of Canada economists Matthieu Arseneau and Daren King.

So the takeaway here is that we all need to try our best – and it isn’t easy when gas hits more than a toonie per litre – to live within our means, and avoid living off credit lines and cards. The days of cheap money thanks to decades of low interest rates have ended, at least for now.

The growing inflation rate also underscores the need for retirement savings. Your future you will need more, not less money should the trend towards higher costs continue on into the future. A great partner for retirement savings – one that is open to all Canadians with registered retirement savings plan room – is the Saskatchewan Pension Plan. Check them out today and see how they can help you build, a grow, a retirement nest egg!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


AUG 8: BEST FROM THE BLOGOSPHERE

August 8, 2022

Do old boomer money rules make sense for the young?

Some of the old tried and true money rules us boomers have long lived by may not hold up for younger generations.

An interesting article by Alison MacAlpine in the Globe and Mail casts doubt on the relevance, for today’s young people, of some of the old boomer money beliefs.

“Save 10 per cent of what you earn, invest 70 per cent in stocks and 30 per cent in bonds and keep six months of expenses in an emergency fund. Rules like these worked well for many baby boomers, but don’t necessarily apply to younger generations,” she writes.

Her article quotes Julie Pereira, of Edward Jones, as noting the old boomer “how-to” axioms followed the belief that life would unveil itself in a very specific, predictable order.

“Older generations would have an order of operations on how they wanted to do things – get married, buy a house, have children, save for retirement. Now we’re seeing that be more fluid,” Pereira states in the article.

Home ownership, the article continues, may be less of a priority for younger folks given the “eye-watering prices, rising interest rates and high levels of student debt.” Saving for retirement, the article warns, may also have “dropped down the list” for younger folks, replaced by “saving for a series of sabbaticals or travel breaks from work.”

The article suggests that another old boomer retirement target – having 70 per cent of your pre-retirement income as retirement income once you are 65 – may no longer work, given that many people plan to work longer or have more expensive plans for when they retire.

The article casts doubt on what our Uncle Joe used to say – bank 10 per cent of what you make and live on the rest.

“As for saving 10 per cent from every paycheque, that may not work for people with fluctuating salaries. Sometimes they’ll need to use everything they earn, and at other times they’ll be able to save more than 10 per cent,” the article states.

As for the investing rules of thumb, states Rod Mahrt of Victoria’s Wellington-Altus Private Wealth in the article, “we reached the conclusion that the traditional 70/30 (equity/fixed income) asset allocation that worked so well for past generations is not going to work for today’s generation. It’s not going to work for the next 30 years. It’s not even going to work for the next 10 [years].”

Mahrt tells the Globe that bonds have had a rough patch of late, and that there may be safer investment havens with real estate, infrastructure and “low volatility hedge funds.” Today’s young investors may also be interested in “purpose-driven” investments that benefit society or the environment.

The article concludes by saying that while some elements of the boomer plan – like having an emergency fund – still make sense, it’s important for boomers to share their money experiences with their kids (good and bad) so they can develop their own plans based on their own needs and today’s market and economic conditions.

The key takeaway, at least from a boomer perspective, is that having an individualized plan is better than going by rules of thumb. The article stresses the importance of getting professional help with money management, which is also good advice.

If mom and dad’s money rules don’t work, the article suggests, develop some of your own rules that do.

Putting off retirement saving until later can work, but you’ll have to put away a lot more in the run-up to retirement than you will when it is three or four decades down the road.

If you can’t afford an Uncle Joe 10 per cent rule, try five per cent, or two per cent. Start small and ratchet up when you can. Investing for retirement is a long-term proposition so the earlier you start, the better, even if it is with a relatively small monthly contribution.

Managing the investment of your retirement savings is something that the Saskatchewan Pension Plan can do for you. SPP’s Balanced Fund’s asset mix is frequently adjusted to keep your savings growing regardless of market ups and downs. Check out this made-in-Saskatchewan retirement savings solution today!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


AUG 1: BEST FROM THE BLOGOSPHERE

August 1, 2022

More had pension coverage in 2020, but six in 10 don’t: Statistics Canada

New research from Statistics Canada shows that 57,000 more Canadians had registered pension plans in 2020 than in 2019, reports Investment Executive.

However, the article notes, 2020 – the first year of the pandemic – saw fewer workers overall due to COVID-19. So while a greater percentage of workers had pensions, the overall worker pool actually shrunk that year, the article notes.

Let’s dig into the other findings.

“Nearly 6.6 million Canadians had a registered pension plan in 2020, up by 57,000 (0.9 per cent) from 2019,” Investment Executive reports, citing Stats Canada data.

“The increases came in Quebec (33,000), Ontario (25,200) and British Columbia (16,800), while fewer workers in Alberta (-23,400) and in Newfoundland and Labrador (-3,500) had pensions,” the article continues.

Defined benefit pensions – the type where the payout is pre-determined, and is typically a lifetime pension that may offer inflation protection – represented “the lion’s share of pensions in Canada,” the publication notes. 4.4 million Canadians were covered by this type of plan in 2020, the article adds.

Defined contribution pensions – basically capital accumulation plans, where savings are invested and whatever is in the kitty at retirement is turned into income – accounted for 18.4 per cent of all registered pension plan members. The Saskatchewan Pension (SPP) is this type of plan.

Overall, the article reports, “almost four in 10 (39.7 per cent) workers in Canada were covered by a registered pension plan in 2020, up from 37.1 per cent in 2019.”

“The increase in the coverage ratio was due to a decrease in labour force numbers, attributable to the pandemic, rather than an increase in the membership in the registered pension plans,” StatsCan stresses in the article.

Participation in workplace registered pension plans has been in decline generally this century, Investment Executive reports. “This level of coverage was last seen in 2001 (40.2 per cent), then trended downward before having a peak year in 2009 (39.4 per cent), after which point it resumed its downward trend.”

There are a couple of takeaways from this article. First, it suggests that over six in 10 workers in Canada weren’t covered by a registered pension plan in 2020. That’s going to be a problem as more folks without pension coverage at work converge on their retirement years.

On the positive side, these days in the sorta-kinda post-COVID world, employers are finding it harder to attract and retain employees. Many are improving the benefits they offer their teams, including adding or upgrading pension programs. Let’s hope this more positive trend continues.

If you don’t have any kind of pension arrangement at work, fear not. There’s a great do-it-yourself option out there through the Saskatchewan Pension Plan. Any Canadian with registered retirement savings plan (RRSP) room can sign up for SPP, and you can then contribute up to $7,000 annually to the plan. If you have an RRSP, you can move those funds to your SPP account – transfers of up to $10,000 a year are permitted. Your savings are professionally invested at a low cost in a pooled pension fund, and when it’s time to stop the whole work thing, you can arrange to receive some or all of your savings as a lifetime monthly pension via SPP’s annuity program.

Be sure to take a look at what SPP has to offer!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.


JUL 25: BEST FROM THE BLOGOSPHERE

July 25, 2022

Research shows “soon-to-retire” have different plans for life after work

New research from Edward Jones, reported on by Steve Randall in Wealth Professional, finds that many near-retirees don’t plan on a lot of rest and relaxation in retirement.

“Instead of taking it easy, more than half of Canadian retirees and those who are within 10 years of retirement see their post-work years as a ‘new chapter’ in their lives,” Randall writes.

As well, the Edward Jones/Age Wave survey found that 56 per cent of Canadians (aged 45 and over) surveyed see retirement “as a chance to reinvent themselves,” the publication reports. Some of that non-rest and relaxation includes work, the article continues, with 60 per cent of those asked saying they plan “to do some work as part of their ideal scenario.”

They are also expecting a long retirement – Wealth Professional reports the study found those polled expected around 27 years of retirement, and that they may live to age 100.

The article contrasts these retirement dreams with some less dreamy retirement realities. On average, the survey found, folks started saving for retirement at age 37 on average, with most wishing “they had started nine years earlier,” the article tells us.

“For those within 10 years of retirement, 58 per cent are contributing to an account but only 30 per cent have a thorough financial plan,” the piece continues.

“Those who retired in the last two years fear outliving their savings and among those three-14 years into retirement, 55 per cent have taken action to shore up their finances such as starting a part-time job or downsizing their home,” reports Wealth Professional.

Interestingly, only nine per cent of those surveyed think retirement should start at a certain age, the article notes. For 21 per cent of those asked, retirement should coincide with “financial independence,” the article adds.

The article concludes by identifying “the four pillars of retirement” as health, family, purpose and finances.

This is interesting research, for sure. The takeaway seems to be that while most of us are aware of what we want to do when we aren’t working as much, fewer have focused on the “finance” pillar, which plays a critical “enabler” role for the other pillars.

Way back when this writer was a newly-minted pension plan communications guy, we were taught that the three pillars of retirement where government retirement benefits, personal savings, and your workplace pension plan.

That three-legged stool isn’t as common a concept as it used to be. These days, the majority of Canadians don’t have a workplace pension plan. If you’re in that boat, don’t fret – you have the ability to create a do-it-yourself retirement program via the Saskatchewan Pension Plan. SPP can be your personal pension plan, or can be offered to your employees. You provide the contributions, and SPP grows them until it’s time to take up deep sea fishing, ballroom dancing, or what-have-you. Check them out today!

Join the Wealthcare Revolution – follow SPP on Facebook!

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.