High cost of living hinders saving for kids’ education: CST

In mid-September, we rolled up at a Petro Canada in rural New Brunswick and gulped at the posted price at the pump — $2.01 per litre. The cost of groceries – and how they have gone up – is also a hot topic amongst our friends at line dancing class.

And that higher cost of living is having a negative impact on the ability of Canadians to save – not just for retirement, but for their kids’ education, reports Ben Cousins, writing for The Financial Post.

Saving, his article begins, is being impacted by living costs.

“More than half (of Canadian parents) reported moderate to major challenges when it comes to education savings, especially while struggling to save for retirement and other major purchases, according to a recent Canadian Scholarship Trust Foundation (CST) report,” Cousins writes.

Barriers to savings cited by respondents include food prices (60 per cent) and housing costs (41 per cent), the article adds. Nearly half (47 per cent) cited low salaries as a reason they can’t save, the article notes.

“These findings reaffirm that education remains a priority for Canadians across the country, but it also shows that outside factors are preventing them from reaching their savings goals,” CST chief executive Peter Lewis states in the article. “Canadians are not only worried about affordability in the short term, they’re also unable to invest or save the way they want for the long term.”

The article notes that while the Registered Education Savings Plan (RESP) “allows parents or loved ones of a child to invest up to $50,000 for their education,” with the feds adding grants equal to 20 per cent of what parents kick in (limits apply), “only about two-thirds of the parents surveyed said they had heard of the plan and only 50 per cent have opened an account for their child, according to the CST survey.”

As a result, “many parents, grandparents and future parents” aren’t taking advantage of this government-assisted savings program, Cousins notes.

The word needs to get out, Lewis states in the Post article.

“There is a clear need for ongoing education around the savings vehicles available and open conversations with family and professionals around financial priorities and how to start or prioritize education savings,” Lewis states in the article. “With government grants complementing periodic contributions and incentives like the Canada Learning Bond for modest-to-low-income families, there are so many options available to help parents get started or stay on track.”

As one who benefited personally from a RESP set up by our parents, and someone who has helped with RESPs for a child and two grandkids, we can attest that the program really helps save for what has become a very expensive thing – post-secondary education. Build it into your budget and after a while you won’t miss the contributions.

The same is true of retirement saving with the Saskatchewan Pension Plan. Members can set up pre-authorized SPP contributions from a bank account or credit card (PAC-PCC-application.pdf) and “set it and forget it.” Your savings dollars are automatically transferred to SPP, where they are professionally invested in our low-cost, diversified, pooled funds.

At retirement, your options for turning savings into income include the security of a monthly lifetime annuity payment, or the flexibility of the Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Are childless couples less confident about retirement?

One might think that a couple without kids could have more money to save for retirement than their neighbours with a full house.

However, writes Freschia Gonzales for Benefits and Pension Monitor, recent survey results suggest otherwise.

“Employees without children report the lowest confidence in reaching their retirement savings goals, trailing parents by a wide margin,” she writes.

Citing data from the 2026 Annual Retirement Study from the Allianz Center for the Future of Retirement, Gonzales reports that “54 per cent of Americans without children feel confident they will meet their retirement savings goal, compared with 72 per cent of those with children.”

There’s an important asterisk to this finding, her article continues. It’s not necessarily the more the merrier when it comes to kids.

“Confidence also slips as families grow, with 74 per cent of parents with one or two children feeling confident against 66 per cent of those with three or more,” she reports.

But let’s get back to that central question. Wouldn’t not having kids free up more cash to stash for the future?

Gonzales explains the thinking behind the numbers.

She quotes Allianz’s Kelly LaVigne as noting that “not having children, and the expenses that come with them, does not automatically mean a person has a plan to save.”

“Parenthood often forces tough conversations about money. Without that catalyst, too many Americans may be moving forward without a strategy,” LaVigne states in the article.

Another fact to consider, reports Gonzales, is that the study “found 62 per cent of Americans without children do not have a written financial plan, compared with 42 per cent of those with kids.”

Could this suggest that parents worry more about their money than non-parents? Let’s read on.

“About three in five Americans without children, 61 per cent, say they cannot think about saving for retirement because they are managing daily expenses versus 53 per cent of parents,” reports Gonzales.

Money’s too tight to mention for the non-parents?

“Rising costs weigh more heavily on the same group: 71 per cent worry the cost of living will prevent them from enjoying retirement, against 64 per cent of parents; 66 per cent worry about affording long-term care, against 60 per cent; and 54 per cent say housing costs will limit their ability to save, against 47 per cent,” writes Gonzales.

But the parents surveyed saw specific obstacles to saving, the article continues.

“Paying for children’s education keeps 29 per cent of parents from saving as much as they would like, and childcare costs keep 27 per cent from doing so. Parents are also more likely to cite credit card debt, at 40 per cent, and car loan debt, at 25 per cent, as obstacles to retirement saving,” the article notes.

The article recommends parents consider getting professional financial help so that they can carve out more money from their budget for long-term retirement savings.

A final thought from Gonzales’ interesting article – “nearly half of Americans, 48 per cent, say they considered or would consider the challenge of saving for retirement as a significant factor in whether to have children. Millennials were far more likely to weigh it, at 64 per cent, than Gen Xers at 41 per cent or boomers at 18 per cent.”

As one who is fast approaching a 70^th trip around the sun, this writer cannot stress the importance of putting something — anything — away for your retired self while you are still young and working.

If you have any sort of retirement program through work, be sure to sign up and contribute to the max. If you don’t, and you are not sure how to go about investing for retirement, then the Saskatchewan Pension Plan may be the savings partner you’ve been looking for.

You provide the savings dollars – you can choose any amount up to your annual registered retirement savings plan (RRSP) limit. SPP does the heavy lifting, investing your hard-saved dollars in our pooled, low cost, professionally managed funds.

In addition to making regular contributions during the year, you can transfer any amount from other unlocked RRSPs you may have to SPP, consolidating your nest egg.

When you reach the finish line of work, you’ll have such income options as receiving a lifetime monthly annuity payment, or the more flexible Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Has `analysis paralysis’ got you sitting on the fence with investing?

Most of us understand the idea of getting our money working for us via investing. But, writes Jessica Wong for Money Canada, “analysis paralysis” may have some of us sitting on the fence rather than getting going.

She says noted financial author Dave Ramsey has a solution for the over-analyzers among us – “shut up and invest.”

Answering a recent question from a listener on what fund is best to invest in, Ramsey made the point that “fewer than half of individual mutual funds in the growth sector outperform the market over time.” This, notes Wong, is “a point that Canadian data has confirmed repeatedly.” Wong adds that “over a 10-year horizon, 98.8 per cent of active Canadian equity funds failed to beat their benchmark.”

But that shouldn’t prevent people from investing, the article continues.

Ramsey, she writes, was arguing that any investing was better than not investing. “It was about the cost of doing nothing while time drags on,” she explains.

“You got a lot of people that have an opinion out there that have no stinking money,” Ramsey states in the article. “100 per cent of the people who invest end up with more money than those who don’t every time.”

It shouldn’t be a debate about which sort of investment does better than others, the article continues. Taken a different way, continues Wong, Ramsey is saying that “a small difference in returns between funds is irrelevant if you never actually invest.”

“Ramsey pointed to research from Ramsey Solutions’ National Study of Millionaires, a survey of more than 10,000 U.S. millionaires, to make his case. The findings were striking: eight out of 10 millionaires built their wealth through their workplace retirement plan. Most were not financial geniuses. Most were not high earners. And many picked a fund to invest in simply because a colleague suggested it. While these findings are not peer-reviewed, they paint an interesting picture of how everyday citizens reach a seven-figure net worth without being financial tycoons,” the article notes.

“A lot of millionaires are just regular people who picked out their mutual fund based on what the guy in the cubicle next to them was doing,” Ramsey states in the article. “The key, he stressed, is that they were investing — not just talking about it,” Wong writes.

Wong then cites recent research from the Healthcare of Ontario Pension Plan that found “that 49 per cent of Canadians have not set aside any money for retirement in the past year, and 39 per cent have never saved for retirement at all.”

Edward Jones research, she continues, found that only 41 per cent of Canucks plan to make a registered retirement savings plan contribution this year – but of that total 70 per cent have “negative feelings” about contributing, and 40 per cent report being confused.

So, she points out, many of us aren’t saving, those who are report being nervous about how to go about it, and as well, this time according to BMO’s Annual Retirement Survey, “74 per cent of Canadians worry they will not have enough money in retirement because of rising prices. Of those who said inflation was eroding their financial security, 31 per cent admitted to actively contributing less to their retirement savings as a result.”

“The gap between worrying about retirement and actually investing for it is what Ramsey is calling out,” concludes Wong.

If there’s a takeaway from this interesting piece, is that “just do it” is a motto that works not only for athletic wear but retirement saving.

If you’re saving on your own for retirement, and aren’t sure how to proceed, let the experts at the Saskatchewan Pension Plan lend a helping hand. You decide how much you want to contribute – any amount up to your available RRSP room – and we’ll take it from there.

Your savings will be invested in our low-cost, professionally managed pooled funds that feature diversification among the major asset classes. When, at the end of work, you want to turn those savings into income, your choices include the security of a lifetime monthly annuity payment or the flexibility of SPP’s Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Signing up for workplace retirement plan called “underrated retirement savings move”

Decades ago, when toiling as a weekly newspaper editor in small-town Ontario, this writer was on the fence about signing up for the pension plan. Money is tight, we reasoned at the time – and the future is far away. Should we bother?

We are glad we did, and Alisa Wolfson, writing for MarketWatch, considers signing up for workplace retirement benefits “the most underrated retirement savings move.”

She is writing for a U.S. audience here, but many of the concepts resonate north of the border as well.

She quotes Bank of America’s Matt Gellene as saying that it’s a smart move to join the company plan, especially if there is an employer match. “It’s essentially free money and yet many people, especially younger workers, leave it on the table. If your employer offers a match, contribute at least enough to get the full benefit,” he tells MarketWatch.

Another tip the article touches upon is the importance of automating your retirement savings.

“Make sure you’re automating your contributions,” Gellene states in the article. “When you pay yourself first by sending part of each paycheque straight to savings, you remove the friction of having to make that decision every month. Small, consistent contributions made over time can make a meaningful difference thanks to the power of compounding.”

He suggests that you set up your retirement savings like a bill. “Get into the habit of paying yourself first,” he adds.

Don’t put off the start date of your retirement savings, the article adds.

“Start now, even if it’s small. The best time to start investing is today. You don’t need a large lump sum to begin planning for your future; a few hundred dollars is plenty to get started. Even contributing just one per cent or two per cent of your income makes a difference if you’re consistent and increase it over time. The earlier you start, the more time your money has to grow. Your future self will thank you,” he tells MarketWatch.

In fact, the article continues, not focusing at least some of your attention on long-term retirement savings – especially while you are young – can be one of the biggest mistakes you’ll make.

“The challenge is that delaying retirement savings, even by a few years, can result in a significant loss due to missed compound interest. And later in life costs like healthcare can add up quickly,” Gellene states in the article.

If you have a retirement savings program through work, be sure to join up and contribute as much as you can.

If you don’t have such a program, the Saskatchewan Pension Plan can lend you a helping hand.

With SPP, you decide how much you want to contribute. You can set up pre-authorized contributions (PAC-PCC-application.pdf) from your bank account or credit card, a “set it and forget it” approach. You can raise the contributions going forward, perhaps when you get a raise.

Even small amounts of annual savings can add up over time. Try SPP’s Wealth Calculator to see how your savings can stack up (Wealth Calculator | Saskatchewan Pension Plan).

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Searching for the most affordable provinces to retire to

Maybe you’ve reached the end of work and realize you are living in one of Canada’s most expensive cities, such as Vancouver or Toronto. Alternatively, you may have decided you want to live somewhere where your reduced retirement earnings go as far as where you are living now.

What’s a person to do?

Writing for Investopedia, Daniel Liberto decided to search for “Canadian provinces that are both affordable and desirable for retirees.” Five, he writes, stood out.

New Brunswick, he begins, “is one of the most affordable places in Canada to live, while offering abundant natural beauty, low traffic, walkable cities, great health care, interesting museums, lively festivals, and strong community programs.”

The monthly cost of living is 18 per cent less than the national average, he notes. Average monthly rental rates (for one person) are about $1,281 and houses, on average, cost $333,000.

Next comes Newfoundland and Labrador, Liberto continues.

“The province is known for its breathtaking coastal landscapes, a vibrant culture derived from descendants of the Scottish and Irish, friendly communities, a slower pace of life, bearable summers, and, perhaps less favorably, cold winters and snowfalls that can bury whole cars in a day. But then, most homes have built-in fireplaces to get a cozy fire going, and in the summer, you can take a nonstop jaunt to Europe that’s about 4.5 hours long, far shorter than elsewhere in North America,” he writes.

Here, the cost of living is 13 per cent lower than the Canadian average. It costs about $1,242 for one person to rent a living space each month and houses run, again on average, $346,000, Liberto adds.

Third on the list is our very own Saskatchewan!

Ideal if you are looking for rural living, Liberto notes that “this province receives the most sunshine in the country and is home to pleasant midsize cities with good health care and cultural activities, as well as lakes, forests, and national parks.”

The home of Rider Pride has a cost of living that is 14 per cent less than the national average, he writes. Rent for one person averages $1,294 and houses, on average, cost $378,000.

Rounding out the top five are Manitoba and Prince Edward Island, Liberto notes.

Manitoba, he writes, “has a bit of everything. There’s the sea and plenty of lakes and parks for lovers of the outdoors, while in cities like Winnipeg, you’ll find a great art scene, many festivals, multicultural cuisine, and all the necessary amenities at affordable prices.”

Living costs are 11 per cent lower than the national average. It costs, on average, $1,377 for one person’s monthly rent and houses average just over $400,000.

Prince Edward Island, he concludes, “is a large island known for its red sand beaches, lighthouses, fertile farmland, seafood, and strong sense of community. It’s beautiful, laid back, and very affordable. It also offers a lively arts and theatre scene as well as various music festivals.” The weather is “temperate” in winter and “pleasant” in summer, he adds.

Your average one-person rental rate in PEI is $1,252 and you can own a home – on average – for $278,000.

One important factor, when thinking about retirement living, is whether you have sufficient retirement income. With workplace pension plans being somewhat scarce these days, particularly in the private sector, you may need to save on your own for the golden years.

A great and willing partner is the Saskatchewan Pension Plan. You decide how much to contribute each year – any amount up to your registered retirement savings plan limit. SPP does the rest, investing your contributions in our low-cost, pooled, diversified and professionally managed funds.

You can also transfer in any amount from other RRSPs you may have to consolidate your nest egg.

At retirement, your options include the security of a monthly lifetime annuity payment or the flexibility of the Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Canadians reluctant to invest, Tangerine survey suggests

Are we, as a nation, a bit on the fence about whether to wade into investing – or to just stash cash in a safe savings account?

A new survey from Tangerine Wealth, posted on the Toronto Star website, suggests just that.

According to their media release, “nearly half of Canadians (48 per cent) are holding back money they could be investing, with market uncertainty emerging as a key reason many remain on the sidelines.”

“The survey suggests Canadians aren’t avoiding investing altogether, but many are struggling to find the right balance between saving and investing. Among those setting money aside instead of investing it, nearly one-quarter (24 per cent) have parked $25,000 or more, often in chequing or savings accounts,” the release continues.

How come? Let’s read on.

“Many Canadians are weighing the value of keeping money within reach today against the opportunity to grow it for tomorrow,” states Aharon Kagedan, Managing Director, Wealth at Tangerine, in the release. “Holding cash can make sense for short-term needs, but when it aligns with their goals and comfort with risk, investing has the potential to turn those savings into real momentum over time,” he states.

Here are the key findings from the research, as set out in the release:

• “Among those who had money they could have invested, two-thirds (65 per cent) set at least some of it aside, with a quarter (25 per cent) setting aside most or all of it. Only 15 per cent say they invested all of it.”
• “Many are sitting on significant amounts of uninvested cash. Among those holding back funds, nearly one-quarter (24 per cent) have set aside $25,000 or more, and 13 per cent have set aside $50,000 or more.”
• “Market uncertainty is keeping many Canadians on the sidelines. Nearly one in five (19 per cent) of those who set money aside cite market volatility, while 17 per cent worry about losing money and 12 per cent believe markets are currently too high.”
• “Half (51 per cent) of Canadians feel confident making investment decisions today, with younger Canadians reporting more confidence than older ones. 19 per cent of those aged 55 to 65 say they are not confident at all.”

The release concludes by suggesting those who are hesitant about investing should make use of online tools (the release highlights the bank’s tools) or seek professional advice for direction.

For sure it doesn’t make a ton of sense to have tens of thousands of dollars sitting in a basic chequing or savings account where it will earn little to no interest.

Such “idle” money might be better put to work for your future. Did you know that contributions to the Saskatchewan Pension Plan are treated the same as registered retirement savings plan contributions for tax purposes?

You’ll receive a tax deduction for contributions you make to SPP. At the same time, those contributions will be invested for you in SPP’s low-cost, diversified, professionally managed pooled funds. There will be no tax charged on the growth of your SPP contributions.

It’s when you turn those savings into future retirement income – options include a lifetime monthly annuity payment or the more flexible Variable Benefit – when taxes will apply.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Canadians “sitting on tens of thousands” in unused TFSA room: Liew

Have you been popping a few loonies and toonies into your Tax-Free Savings Account (TFSA)?

Chances are, writes Christopher Liew for The Motley Fool, you have not been topping yours up.

“Canadians are sitting on tens of thousands in unused TFSA room. This dismal take-up is driven by financial priorities and individual saving habits,” he writes.

While TFSAs are definitely getting used, he continues, the average Canadian has filled up only about a third of their available room.

“The average TFSA balance is $38,566, which is only 35.4 per cent of the $109,000 maximum lifetime contribution room,” he notes, citing figures from the Canada Revenue Agency for the 2024 tax year.

Albertans are the best savers, he reports, with average TFSA balances around $41,500. Ontario and British Columbia savers are “close to the national average,” while Quebeckers ($34,000 to $36,0000) and Atlantic Canadians ($31,000 to $33,000) are closer to the low end, he adds.

As well, Liew notes, older Canadians tend to have used their TFSA room up more so than younger Canucks.

“The average TFSA for the 20–29 age bracket is between $9,000 and $14,000. However, the potential maximum for a 20- and 29-year-old is $21,000 and $78,000, respectively,” he points out. Those aged 30 to 49 have an average of $18,000 to $28,000, while those 50 to 59 have balances in the $35,000 to $43,000 range, he adds.

“Further acceleration happens at ages 60–69 ($52,381–$58,000) and ages 70–79 ($64,972–$71,000). For account holders aged 80 and over, the average is $76,305,” he writes.

Liew concludes the article by recommending we all spend a little time adding to our TFSA balances.

“The TFSA is a powerful wealth-building tool. If finances allow, maxing out your specific lifetime limit will produce the best results. It is not the place to store cash, but it was intended to motivate Canadians to save and invest for the future. You miss out on a golden opportunity by failing to capitalize on the tax-free growth feature,” he notes.

“Your TFSA is not just a tax shelter; it is a real money-making engine. The increase in balances among older users may be attributable not only to contributions but also to investment growth. All interest, capital gains, and dividend income earned inside the account is tax-free,” writes Liew.

Over time, that tax-free compounding can really boost your balance, he continues.

“Canadians, no matter which region they live in, can harness the power of tax-free compounding with a TFSA. While maximizing the available contribution room is always within a user’s control, an investing mindset, not saving, will prompt the action,” he concludes.

Compounding over a long term is a key feature of the Saskatchewan Pension Plan, a voluntary defined contribution plan that’s open to all Canadians with available registered retirement savings plan (RRSP) room.

Like an RRSP or a TFSA, growth of your savings within SPP is not taxed – when savings are turned into income, however, taxes do apply.

SPP invests contributions in low-cost, professionally managed pooled funds with a strong track record of solid returns. At retirement, your options for your SPP account include the security of a lifetime monthly annuity payment or the flexibility of the Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Experts warn: don’t bank on the value of your house to fund your retirement

If you are banking on the value of your house being a way to fund retirement, be careful, warns Brett Surbey, writing for Money Canada.

He begins by saying that home ownership is a legitimate sign of “financial success for many Canadians.” And, he adds, “across many prosperous nations, Canada included, owning your own home is a sign of wealth accumulation and a concrete marker of financial security.”

The rising value of homes, he continues, may be translating to a rise in individual net worth in Canada. “According to Statistics Canada’s Financial Security Survey, the net worth of individuals aged 55 to 64 between 1999 and 2023 nearly doubled on average — it increased by 91 per cent. And most of that wealth is locked in a home with plans for retirement, experts Colin Busby and John Stapleton noted in a Globe and Mail opinion piece,” he writes.

Next, Surbey points to recent research from the Healthcare of Ontario Pension Plan (HOOPP) that found “that 62 per cent of respondents viewed their home as a `key part of their retirement plan.’ And 44 per cent of those surveyed said they were relying on the sale of their home to fund their golden years.”

But this `key part of their retirement plan’ comes with a few ifs and buts, Surbey notes.

“Unlike funds in a registered retirement savings plan (RRSP) or a pension plan, selling a home comes with additional title, legal and realtor fees alongside other costs that can erode your equity. Additionally, moving is a major point of disruption — you’ll need to make new friends, find a new doctor and fit into a new community,” he writes, citing Busby and Stapleton’s Globe article.

Another concern is that given the rising costs of housing, finding someone from a younger generation to buy your home may prove more difficult than in the past, Surbey reports.

“A study from the Fraser Institute reviewing housing affordability over the years found that the typical home in every major Canadian city was out of reach for families making the local median income. Meanwhile, the latest homeownership data on millennials in Canada from StatCan reveals that this demographic was twice as likely to be living with their parents compared to baby boomers at the same age in 1991,” he writes.

“If younger Canadians can’t afford homes, future demand could weaken, making it harder for today’s soon-to-be-retirees to cash out at the prices they’re expecting and accomplish their retirement goals,” he points out.

OK – if selling your home to fund retirement is a no-go, what about borrowing against it? Let’s read on.

“From another angle, it may be tempting to access home equity with a home equity line of credit (HELOC) or reverse mortgage rather than selling. However, experts have pointed out that this avenue comes with its own share of risks. For example, reverse mortgages often come with higher interest rates and there can be limited offerings to make use of,” he tells us.

For those thinking of leveraging their homes to fund retirement, Surbey concludes by suggesting they consider other funding avenues – registered retirement savings plans (RRSPs), Tax-Free Savings Accounts, employer pensions, and government retirement benefits.

Whatever route you take, he adds, have a plan mapped out, start small, make your money work for you via investments (and not just simple interest), and be sure to take advantage of any retirement program you can sign up for, especially if it includes employer matching of contributions.

The Saskatchewan Pension Plan has been helping Canadians save for retirement for over 35 years. Any Canadian with available RRSP room can take part, and you can contribute any amount up to your annual RRSP limit. If you have other non-locked-in RRSPs, you can transfer them into SPP to consolidate your nest egg.

SPP then invests your contributions in our low-cost, professionally managed, diversified pooled fund. At retirement, options include the security of a lifetime monthly annuity payment or the flexibility of the Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

CAAT survey suggests gap between expected retirement funding and “what actually happens when you get there”

Writing in The Globe and Mail, Meera Raman makes a very astute comment about retirement – those who haven’t yet experienced it have no idea what it will be like.

“There are some life experiences you simply can’t fully understand until you’re living them. Your first full-time job, getting married, becoming a parent. Retirement seems to belong on that list, too,” she writes.

That level of “non-understanding” appears to extend to how we all think we are going to pay for retirement, she continues.

“A new survey from CAAT Pension Plan suggests there’s a significant gap between how Canadians expect to fund retirement and what actually happens once they get there. Among working Canadians, 25 per cent expect personal savings to be their primary source of retirement income. Among retirees, however, only 15 per cent say that’s actually the case,” Raman reports.

In fact, she continues, the CAAT research suggests that retirees “rely more heavily on government benefits than they anticipated.” The CAAT survey found “that 58 per cent of retirees primarily depend on public programs such as the Canada Pension Plan and Old Age Security,” she adds.

This doesn’t mean, Raman adds, that retirement planning doesn’t matter.

“Rather, it’s a reminder that retirement planning isn’t about perfectly predicting the future. It’s about preparing for a range of possibilities. We spend decades estimating what we’ll need, what we’ll spend and where our income will come from. Then retirement arrives and reality inevitably looks different,” she explains.

It’s important, she concludes in the planning-related segment of her article, to be flexible when planning.

“Flexibility may be one of the most underrated retirement skills. No matter how carefully you plan, some things only become clear once you’re actually experiencing them,” she notes.

There’s another takeaway from the CAAT findings that may seem a bit alarming – that 58 per cent of retirees “primarily depend on public programs such as CPP and OAS.”

Those programs are great, of course, but another thing many of us don’t know until we actually receive CPP and OAS is that the benefits are quite modest.

According to the federal government’s website, the maximum CPP benefit payable at 65 in January of this year was $1,507.65 – and that’s a gross, pre-tax amount. And not everyone works long enough, and makes consistently more than the national average wage, to qualify for the maximum amount. The same site notes that the average CPP payment this past January was $877.01 per month.

As for OAS, the maximum for those 75 and older is $827.17; for those age 65 to 74 the maximum is $751.97.

Even if you got the most possible CPP and OAS you would be looking at $2,300 a month and change before taxes. So the fact that more than half of retirees say they rely primarily on these benefits is worrisome.

The need for additional income, from either workplace retirement programs, personal savings, or both, appears clear. If you are already contributing to a workplace pension program, be sure you are participating to the max.

If not, the Saskatchewan Pension Plan may be the retirement income solution you have been looking for.

Open to any Canadian with available registered retirement savings plan room, SPP is a voluntary defined contribution pension plan. You decide how much you want to contribute each year – any amount up to your RRSP limit – and you can also transfer in any amount from other RRSPs you may have to consolidate your nest egg.

SPP then invests your hard-saved retirement dollars in our professionally managed, low-cost, diversified pooled fund. When it’s time to retire, SPP can provide you with options like a lifetime monthly annuity payment or the more flexible Variable Benefit. The additional income that SPP can provide, over and above government benefits, may provide your future self with a little more breathing room in retirement.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Who wants to retire as a millionaire?

We all probably dream about having a cool million in the bank when we retire, writes Vishesh Raisinghani for Money.ca. But, he notes, fewer than 10 per cent of us ever reach that target.

His article offers up a few tips and how you can raise your game at retirement savings.

He begins by noting that, according to BMO’s Annual Retirement Survey, “the average Canadian believes they need $1.7 million to retire comfortably – up from $1.54 million the year before…. yet more than one in three (36 per cent) say they’re unlikely to ever reach that target.”

“Three quarters of Canadians (75 per cent) aged 55 to 64 have $100,000 or less saved for retirement, according to Benefits Canada data,” he adds. “Put another way, nearly nine out of 10 people approaching retirement age aren’t in the seven-figure club,” Raisinghani reports.

His first advice is to set a realistic goal.

“You can’t reach a destination if you don’t know where your starting point is. The first step toward a million-dollar retirement is benchmarking your savings against what other Canadians your age actually have,” he notes. In other words, you can’t catch up if you don’t know that you’re behind.

He suggests using the savings median as your target, by age bracket. The average rate of savings is usually higher because it is skewed by high-income earners. Here, reports Raisinghani, are average savings and median savings by age bracket:

• Under 35: average $41,000 / median $12,500
• 35 to 44: average $82,100 / median $30,000
• 45 to 54: average $150,300 / median $70,000
• 55 to 64: average $216,900 / median $100,000
• 65 and over: average $224,000 / median $100,000

Don’t forget that government benefits like the Canada Pension Plan and Old Age Security can supplement your savings, he adds.

Next, he recommends that we boost our savings rates.

“If your retirement target is well above the national or median average, your savings rate probably needs to be significantly higher as well,” he writes.

Currently, the Canadian savings rate is a fairly modest 4.4 per cent, he reports. “That means for every $20 in disposable income, most Canadians are saving less than $1. Saving just six per cent of your income could put you ahead. Hit 10 per cent or more and you’re in a select group of super-savers,” he notes.

His final tip is to “invest for growth.”

“Savings are the foundation. But to turn a solid nest egg into a million-dollar one, your money also needs to work hard. The power of compound growth is real — but only if you have the time and the right investments to let it run,” he writes.

“Passive investing through low-cost index funds has become one of the most popular and accessible strategies for Canadians. Exchange-traded funds (ETFs) now make up nearly a quarter of Canada’s investment fund market, up from less than 10 per cent a decade ago, according to Morningstar. Canadian equity ETFs tracking major indices have produced strong historical annualized returns,” he writes.

Another tip would be to take your CPP and OAS late, for income that is 42 per cent and 36 per cent higher than taking it at 65, respectively, he reports. “For those who can afford to wait, this strategy provides a powerful, inflation-indexed income stream for life,” he notes.

Raisinghani concludes with several other general savings tips, including the idea of “automating” your savings (so that savings dollars are auto-transferred to your savings account before you have a chance to spend them) and knowing the tax rules for retirement savings accounts when deciding where to withdraw money as income.

The Saskatchewan Pension Plan invests members’ savings in a low-cost, diversified, professionally managed pooled fund that has boasted excellent rates of return over its 35-year history. As well, SPP members have the option of “automating” their savings (PAC-PCC-application.pdf) via setting up pre-authorized contributions from a bank account or credit card.

Check out SPP today!