Category Archives: Blogosphere

Nov 26: Best from the blogosphere – The fear of aging

A look at the best of the Internet, from an SPP point of view

The fear of outliving your savings
The old proverb, “live long and prosper,” popularized by Star Trek’s Mr. Spock, may be taking on a new meaning given some recent research.

According to recent research on aging from BMO Wealth Management, the possibility of a very long life, in the late 80s and beyond, is starting to scare Canadians over 55.

BMO found that 51 per cent of those surveyed “are concerned about the health problems and costs that come with living longer.” Forty per cent worry about “becoming a burden for their families,” while 47 per cent worry about outliving their retirement savings.

It’s clear that the spectre of long-term care costs near the end of life is a haunting one for those close to or early into their retirement years.

According to The Care Guide, the cost of long-term care – which is normally over and above the costs of renting a unit in a care facility – can range from $1,000 to $3,000 a month depending where you live in Canada.

That’s a big hit, considering that the average CPP payout in Canada  for a 65-year-old is only about $670 a month (as of July 2018) and the average OAS payment is only about $600. These great programs will help, but you may need to augment them with your own pension or retirement savings.

According to the CBC, citing data from 2011, the average annual RRSP contribution is only about $2,830. The broadcaster says someone saving $2,000 a year from age 25 to age 65 would have a nest egg of more than $300,000 at retirement. That sounds like a lot until you consider living on that for another 20 to 25 years.

A good way to insure yourself against the risk of running out of money is to buy an annuity with some or all of your retirement savings. An annuity will pay you a set amount, each month, for the rest of your life – no matter how long you live. The Saskatchewan Pension Plan not only provides you with a great way to save towards retirement each year you are working. It also provides a range of annuity options; check out SPP’s retirement guide for an overview.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

Nov 19: Best from the blogosphere – Value of offering a pension plan

A look at the best of the Internet, from an SPP point of view

Employers need to help their employees save, says Ontario car dealership
An Ontario car dealership believes they, as an employer, need to play an active role in helping employees prepare for their golden years.

Bruce Dumouchelle is co-president of St. Thomas Ford-Lincoln in St. Thomas, Ont. Speaking to Automotive News Canada he notes that in the old days, retiring long-service employees got “a handshake and a set of golf clubs.”

“I just never felt that was enough,” he tells the magazine. “I felt, as an employer, we have to help employees save for retirement.”

To that end, the magazine notes, the dealership joined the Canadian Ford Dealers’ Pension Plan. Employees now make pension contributions that are matched by the employer, the magazine reports.

Having a pension plan is a great way to attract employees, the article notes.

“Employees feel they have a say over their future. I think the difference between working here and working somewhere else is that when retirement day comes, they’re going to have some money set aside,” Dumouchelle states in the article.

Eight habits are killing your retirement dreams
According to the Boomer & Echo blog, eight bad habits are impacting the retirement savings of Canadians.

First, the article notes, we don’t watch our spending. Second, we “want the newest everything.” Third is our collective need to upgrade, followed by item four, “treating credit card debt as a fact of life and not a hair-on-fire emergency.”

The fifth item is taking on “low-interest debt” to finance assets that depreciate – “weddings, vacations, furniture and vehicles.” Rounding out the list are complacency, putting off retirement savings until “a later that never comes,” and not investing long-term savings, but keeping it all in cash.

“The good news is that it’s never too late to take control of your finances and start saving for retirement. Start by fixing bad habits that have a negative effect on your finances,” the article concludes.

It’s easy to get started on your retirement savings with the Saskatchewan Pension Plan. Visit their site today and see how easy it is to begin putting away today’s dollars for tomorrow’s adventures.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

Nov 5: Best from the blogosphere – Save a little, save a latte

A look at the best of the Internet, from an SPP point of view

Save a little, save a latte?
We continually hear that we aren’t saving enough, and that we all need to get cracking on building up those savings. But how?

An article from Money Instructor  makes the interesting argument that in order to get the savings ball rolling, you need to give up small expenditures, and then stash the savings away.

The article talks of the “Latte Factor”.

“Many people will think nothing of spending $2.50 each and every day on an afternoon latte,” the article notes. “It is true that $2.50 is not that much money… however, if you were to add up that $2.50 a day, it becomes $12.50 each work week.” That’s $52.50 a month, and $630 per year, the article notes.

We all don’t buy lattes, but there are certainly other habitual and largely unnecessary expenses we could give up in order to boost our savings, the article notes.

“The first step in finding your (Latte Factor) is to write down everything you spend for a month or longer,” the article advises. You’ll find many things may be slipping through the cracks in your spending, the blog adds – “vending machines, the convenience store, lunches, and dinner at fast food or restaurants.”

The Smart About Money Blog offers sage advice as well.

“Pay yourself first,” the blog advises. Savings should be a “fixed item” in your spending plans, the article notes. Make it automatic, the blog continues – “set up an automatic transfer from your chequing account to your savings account each month.” The blog also urges people to save one-time payments such as tax refunds, bonuses, tips, or “proceeds from garage sales” to savings accounts.

Another idea we’ve heard is to save up all change, as well as winnings from scratch tickets or money from bottle deposit returns, in a piggy bank. When the bank gets heavy, it’s time to deposit the money in savings.

Any road that gets you to more savings is the right one. And an excellent destination for those savings is a Saskatchewan Pension Plan account. Your money will be professionally managed at a very low cost, will grow over time, and can be converted to a lifetime annuity when you retire.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

Oct 29: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

How to start the good habit of saving
We all know about bad habits – they are easy to start, hard to give up, and generally provide a lot of pleasure, guilty or otherwise.

But good habits – more kale, perhaps, or jumping on the elliptical, or getting out of debt – all seem harder to start. Why?

Interviewed in the Globe and Mail, Manulife’s Bob Tillman warns that with disappearing workplace pensions, the habit of retirement saving needs to start early, when couples are young.

“If people start sooner there’s more ability to make a difference,” he states in the article. “No matter how much money you make, it becomes much harder as you get older, if you haven’t been saving, to save anywhere close to what you’ll need to come close to your pre-retirement income.”

His key tip is to make the savings automatically, every pay day, before you have a chance to spend it on anything else. The earlier you start, the better, he adds.

Start small, suggests The Balance. “Focus on the fact that you’re saving something. It doesn’t have to be a big amount. $5 is better than $0, right? Not many people start their financial journey with thousands of dollars in the bank,” an article on the site states. You can ramp things up later, the article adds.

The UK-based Money Advice Service blog suggests what this writer thinks of as the Uncle Joe rule, namely, that you should always live on something less than your full paycheque. Uncle Joe used to tell us to “pay ourselves first” by putting 10 per cent of every cheque away. The blog suggests five per cent.

“Think about saving once you’ve paid your main bills,” the blog advises. “If you find that you can do this, then try to save at least five per cent of your income – the more you’re able to save, the better.”

To recap – start early, make it automatic, begin with a small amount and ramp it up, and try to live on less than 100 per cent of your pay.

And the Saskatchewan Pension Plan is a great place to put away those savings. They can do automatic withdrawals from your account so that you are paying yourself – savings-wise – first.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

Oct 22: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

Study shows how we can thrive in retirement
As we have been learning, there’s more to retirement than the math of it. While having sufficient income is obviously key, there are health and activity benchmarks we should all be aiming for in our drive to thrive.

A recent study by The Wellesley Institute in Toronto, titled Thriving in the City: A Framework for Income and Health in Retirement sheds some important light on the topic.

As a start, the study notes, we need to be eating well. “Nutrition significantly influences older adults’ general health and well-being, affecting sensory functions, cognitive abilities, and chronic disease risk,” the study notes. “Older adults are at particular risk of inadequate diet and malnutrition,” the report adds.

Next, housing must be adequate and safe, and needs to be affordable, “meaning it costs less than 30 per cent of a household’s pre-tax income.”

The study also looks at physical activity, and supports the Health Canada guideline of 150 minutes of “moderate to vigorous” activity per week for those over age 65. Exercise, the report adds, should include muscle and bone strength-related exercise twice a week.

The research found that while Canadians all have basic health coverage, not all seniors have adequate coverage for “high need” drugs, vision and dental coverage. “Healthy and independent aging,” the study notes, “may involve significant costs,” particularly when privately-delivered care is factored into the equation.

Another key area the research looked at was socialization – the need to spend time with friends and family. “Older adults who engage in social activities frequently (at least weekly) are more likely to report having good health and are less likely to report feeling lonely or dissatisfied with their lives,” the study notes.

So while government retirement programs generally provide a good income for older Canadians, focus must be placed on non-financial aspects of retirement as well, the study states. “If the goal of the retirement income system is to help Canadians maintain an adequate level of income to thrive in their retirement, we need a different approach to the retirement income system and other policies,” the study suggests.

Remember that much can be done in advance of retirement on the savings side. The Saskatchewan Pension Plan offers an end-to-end program that can turn your savings into future income. That can certainly help you with at least one part of a thriving retirement down the line.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

Oct 15: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

Boomer pension crisis is “here, and it’s real,” says survey
Saving for retirement is a lot like eating your beets. You know they are good for you, all the literature talks up their benefits, and many say you’ll be sorry later in life if you don’t eat them now. But they are not everyone’s cup of tea, and many of us choose to ignore and avoid them.

Unfortunately, retirement is a bigger problem than not eating a beet.

A recent Canadian Payroll Association survey found that 69 per cent of working people surveyed in British Columbia save less than 10 per cent of their earnings, “well below recommended savings levels.” The CPA survey is covered by this ABC Channel 7 news article.

The article goes on to say that 40 per cent of Canadians surveyed are “overwhelmed by debt,” an increase from 35 per cent last year. Debt, the article says, is clearly a factor restricting the average person’s ability to save for retirement.

Research from Royal Bank of Canada that found that 60 per cent of Canadians were concerned “about outliving their savings,” and only 45 per cent of them are confident they’ll have the same standard of living when they retire. This research was covered in an article in Benefits Canada.

So, eat your beets – contribute to a Saskatchewan Pension Plan account and if you are already doing that, consider increasing your contributions each year. You’ll be glad you did down the line.

Many savers using the wrong long-term approach
Let’s face it – whether it’s hanging a new door on the shed, patching a hole in the drywall or growing our own vegetables, many of us prefer to do things ourselves rather than depending on others.

However, when it comes to retirement savings, there are “DIY” mistakes that people tend to make, warns The Motley Fool.

First, the article notes, people tend to avoid riskier investments, like stocks. But over the long term, bonds and fixed income assets “are unlikely to provide a sizeable nest egg in older age,” the article says. The stock market is a good long-term investment, the article notes.

You need bigger long-term returns to outpace inflation, The Motley Fool advises.

Finally, it is important to avoid “short-term” investment thinking; retirement investing is for the long term, the article concludes.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

Oct 1: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

Canada rises to ninth place in world retirement rankings
Pat yourself on the back, Canada – we’re the ninth-best country in the world to retire in.

Canada has moved up from 11th place to 9th place in the Natixis Investment Managers’ Global Retirement Index, reports MoneySense. Canada moved up a couple of places, the magazine reports, because of “improving economic conditions and environmental factors.”

The index takes into account 18 factors, such as “Finances in Retirement, Material Wellbeing, Quality of Life, and Health,” reports MoneySense. Canada has the “second-highest air quality and seventh-highest personal happiness scores in the entire index,” the article notes. A stronger job market last year pushed our unemployment rate lower, the article adds.

The top five countries were Switzerland, Iceland, Norway, Sweden and New Zealand. The next five were Australia, Ireland, Denmark, Canada, and the Netherlands.

Save with SPP notes that most of the Top 10 countries were hockey-playing country. Coincidence?

The USA, while good at hockey, came in at 16th overall, the magazine notes.

“Precarious” workers have less access to retirement savings: report
A report by the Canadian Centre for Policy Alternatives has found that only 40 per cent of workers in “precarious” jobs have access to retirement savings plans at work. That compares unfavourably, notes an article in Benefits Canada, to the 85 per cent of “secure professionals” who do have access to such plans at work.

The secure professional group, the article says, “was classified as having a full-time, permanent job for at least 30 hours per week, working for one employer that provides benefits and that they expect to be working for in one year’s time.” The “precarious” group, the article states, are either full time without these factors or working part time or contract.

The takeaway is that the so-called “gig” economy often leaves workers without workplace pension plans or retirement savings benefits. They must shoulder their own retirement savings program – easier said than done.

A nice “do-it-yourself” retirement program is the Saskatchewan Pension Plan. You decide how much you’ll contribute, and you can vary your contributions as you see fit over your working life. Check them out at www.saskpension.com.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

Sept 24: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

Debt beginning to restrict retiree cash flow
When the boomers’ parents got set to retire, they advised their kids to – like them – be sure to not bring a penny of debt into retirement. They dutifully paid off their $25,000 mortgages, saved in their double-digit interest GICs, and merrily rode into retirement.

Easier said than done for those of us who are younger.

According to Which Mortgage, citing Equifax Canada statistics, the debt on Canadian credit cards alone is a whopping $599 billion. As interest rates on those cards begin to tick up, people are less and less able to pay the full credit due each month, the article notes. In fact, only around 56 per cent do pay the full amount owing, and the rest are nudging into delinquency, the story continues. And the total debt of Canadians including mortgages is $1.83 trillion, the article says.

So we’re not able to emulate our parents and grandparents.

A CBC story from earlier in the year found that 20 per cent of retirees are still paying mortgages, and 66 per cent are “still carrying credit card debt.” On average, the report says, citing Sun Life data, Canadian retirees had $11,204 in non-mortgage debt.

Experts disagree as to whether this means retirees are facing hardship. Theoretically, as long as they can still pay off the bad debt (credit) and good debt (mortgage) they will eventually be OK. But an obvious lesson for younger retirement savers is this – try not to be like your parents, and try to get to retirement without debt. You have to try and do both.

A rule of thumb that Save With SPP has heard over the years re debt and retirement savings is the 80/20 rule. While you are young, direct 80 per cent of extra money onto killing debt, but put away 20 per cent for retirement. The same ratio works for retirees trying to pay down debt. You can tweak things once the debt is gone.

A nice way to build your retirement savings gradually while killing off debt is through the Saskatchewan Pension Plan. You can start small and increase your savings rate over time.

Top retirement goals
The Good Financial Cents blog talks about “good retirement goals that everyone should have.”

These include:

  • Have a well stocked emergency fund
  • Get out of debt completely
  • Plan to retire early
  • Have multiple income streams

Some great advice here. It is very difficult to visualize life in retirement when you are still working, so planning is a great ally to a low-stress future.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22