Volunteering gets top grades from retirees: survey

So you’ve been a saver, taken advantage of any workplace pension program you have, and have arrived at the finish line – retirement!

But without the need for a commute or transit ride to work, seeing the gang there for lunch and coffee, and then noodling through the day on the way back home, what’s a person to do with all the free time?

According to a recent article in the Financial Post, the answer may be to become a volunteer.

In a recent survey of members of the group ROTERO, the Post reports, “62 per cent of… members agreed that volunteering contributes to the enjoyment of retirement life.”

ROTERO, the article explains, “has been a voice for teachers, school and board administrators, educational support staff and college and university faculty in their retirement. The organization promotes healthy, active living in the retirement journey for the broader education community. Its vision is a healthy, active future for every member of the education retiree community in Canada. Volunteerism is a big part of that.”

Some of the other findings the Post reports from the survey of ROTERO’s 81,000 members are:

• 64 per cent of members volunteer regularly, compared to “the Canadian average for this age group, which hovers at around 40 per cent according to Volunteer Canada.”
• Most who volunteer average 20 hours per month.
• Asked why they volunteer, “members cited things like a desire to give back and make a difference (71 per cent), the social interactions related to the volunteer role (66 per cent) and the chance to make new friends and meet people (60 per cent).”
• A total of 72 per cent of those surveyed said they also volunteered before they retired.

“It gives a sense of purpose, an opportunity to meet and interact with others, and to contribute to the well-being of our neighbours however we can,” states one RTOERO member in the article. Or, as another member put it in the Post piece, “It feels good to help.”

Save with SPP has been embedded among the retiree population since leaving full-time work eight years ago and concurs with the views of the Post article. Most of us, while working, were part of a team and an organization that had some sort of purpose or goal that everyone played a part in. It’s not the same once you log out for the last time, but volunteering can provide you a new set of downs in terms of goals, objectives, teamwork and meeting new people.

If you want to volunteer in retirement, you’ll need to be sure you have enough income to afford to quit working! The Saskatchewan Pension Plan offers you a nice way to save for retirement – or to augment any savings you already have. With SPP’s voluntary defined contribution plan, you can contribute up to $7,000 a year towards your future – and you can transfer in up to a further $10,000 a year from other eligible retirement savings vehicles, such as a registered retirement savings plan. You’ll be amazed how your account balance can grow. Check out this made-in-Saskatchewan marvel today!

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Canadians sock away $50.1 billion in RRSP savings

It appears the venerable registered retirement savings plan (RRSP) is alive and well, reports Investment Executive – and pandemic-related extra cash may be the reason why.

Citing Statistics Canada data, the magazine reports that “the number of Canadians that socked money away in their RRSPs increased in 2020, and their contributions rose too.”

In 2020, Canadians collectively contributed $50.1 billion in their RRSPs, the article notes. That’s an increase of 13.1 per cent over 2019, the article continues, and the number of contributors rose as well by 4.9 per cent.

Investment Executive reports that “the median RRSP contribution in 2020 came in at $3,600, which is the highest on record.”

Why did more people put more money away?

Well, the article states, “savings rose as public health restrictions limited consumer spending.” With little to spend money on other that food and fuel, the average Canadian was able to stash away “$5,800 in extra savings in 2020 on average.”

So, that extra pile of money found its way into people’s retirement savings kitties.

“With the added savings on hand, more Canadians put money into RRSPs. The proportion of taxpayers that made RRSP contributions in 2020 increased for the first time in 13 years, StatsCan said, noting that the share of taxpayers making contributions has been declining since the Tax Free Savings Account (TFSA) was launched as a retirement savings alternative,” the article reports.

While things are not as locked down (thank heavens) today as they were a couple of years ago, the retirement savings bug is still with us, reports Baystreet.ca.

More than $10 billion found its way into Canadian mutual funds this February, the site reports.

“That brought the total amount of mutual fund assets under management in Canada to $2 trillion as of March 1,” Baystreet notes. “In all, Canadians put $111.5 billion into mutual funds in 2021. That’s nearly four times the $29 billion in mutual fund sales in 2020, which was in line with average annual sales going back to 2000.”

So, let’s put those two thoughts together – Canadians are putting more money away in their RRSPs, including managed mutual funds. The trend seems to be that more money is going this way each year.

The Saskatchewan Pension Plan allows you to contribute up to $7,000 annually towards your retirement nest egg. And you are allowed to transfer in up to $10,000 annually from other registered savings vehicles. SPP is a voluntary defined contribution plan – it has some of the characteristics of an RRSP and some of a managed mutual fund. Where SPP differs from a typical retail mutual fund is in the fees charged. SPP provides you with professional investment management, but SPP’s fee is typically less than one per cent – less than half of what most managed retail mutual funds charge. SPP has a stellar investing record, and – again, unlike a RRSP – SPP gives you the option of converting your accounting into a lifetime SPP annuity, among other retirement income options. Check out this made-in-Saskatchewan success story today!

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Having a withdrawal strategy should help your savings withstand inflation: McGugan

Reporting for the Globe and Mail, columnist Ian McGugan says retirees living off a nest egg of money need a strategy to cope with inflation.

“Unlike a truly rare disaster such as a global pandemic, the current inflationary outburst resembles a muted replay of the 1970s – and retirement planners have long used strategies designed to soldier through such episodes,” he writes.

He notes that a key tactic is the “four per cent rule,” developed by financial adviser William Bengen in 1994.

The rule, McGugan explains, “holds that a retiree planning for a 30-year retirement can safely withdraw an inflation-adjusted four per cent of their starting portfolio each year without fear of running out of money.”

Bengen, the article continues, based his formula on a “U.S. retiree with a portfolio split evenly between bonds and stocks,” and his research showed that even during the Great Depression, the Second World War or the “stagflation” period of the 1970s (a long period of very high, stubborn inflation), the four per cent rule would have worked.

Some industry observers, notably Morningstar, advise a lower withdrawal rate of 3.3 per cent, in light of “how bond yields have fallen,” he reports. Others say you could go up to 4.5 per cent.

McGugan notes that economist Karsten Jeske found “no strong relationship between prevailing levels of inflation and future safe withdrawal rates.”

He is more concerned, McGugan reports, about stock valuations as a problem for retirees.

“When stocks are expensive compared with their long-run earnings – as they are now – retirees should be cautious about how much they withdraw from their portfolio because high valuations are usually a sign of lower stock-market returns to come,” the article notes.

When talking about withdrawal rates, we should qualify the discussion by saying that certain retirement savings vehicles, such as registered retirement income funds (RRIFs), set out a minimum amount you must withdraw each year. When you look at the rates, you’ll notice they start out at four per cent when you’re 65, but gradually increase over time. If you make it to 95, the minimum withdrawal rate jumps to 20 per cent.

But if your savings are in a Tax Free Savings Account or any non-registered vehicle, the four per cent is worth consideration. We are all used to getting a steady paycheque, usually every two weeks or twice a month. If you got all your pay in January, you’d have to figure out a way to make it last so you don’t run out with a month or two left in the year. The four per cent rule is a way to make a lump sum of retirement savings last for the long haul.

The way that people used to deal with volatility in stock prices was to invest in bonds and stocks equally, as the article describes. Because interest rates have been low for decades, and bond yields have declined in recent years, modern “balanced” funds tend to add in some bond alternatives that deliver steady, bond-like income, like real estate, infrastructure and mortgages. If stocks pull back, these sources still generate reliable regular income.

A good example is the Saskatchewan Pension Plan’s Balanced Fund. The asset mix of the fund includes not only bonds, but real estate, mortgages, infrastructure and money market exposure, as well as Canadian, U.S. and international equities. This multi-category investment vehicle is a fine place to store your retirement nest egg. Check out SPP today.

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Is working the new “not working” for older Canadians?

Writing for the Financial Post, Christine Ibbotson notes that her own research on retirement in Canada has found that more people than you would think are working later into life.

“According to Stats Canada, 36 per cent of Canadians aged 65 to 74 are still working full-time, and 13 per cent of those aged over 75 are also still working. I was surprised by this finding, and I am certainly not advocating working into your elder years or continuing to work until you die; however, obviously these stats show that a lot of Canadian retirees are not just sitting around,” she writes.

Ibbotson writes that this tendency to keep working past the traditional retirement age of 65 may be because older Canadians want to “feel purposeful.”

“Contrary to popular belief, there is no “right time” to retire and if you are in good health there is no real need for rest and relaxation every day until you die. Retirement was not intended for everyone, even though we now believe we all should have access to it. The 65-year age of retirement was chosen by economists and actuaries when social security was created, when life expectancies were much less than they are now, and only provides a generalized guideline,” she writes.

Continuing to work, she continues, has many added benefits, including “being socially connected, physically active, mentally sharp, and enjoying the benefits of additional revenue.” You may, she writes, have fewer health problems if you continue to work into your later years.

While it’s true that many of us still work part time into our 60s and beyond (raising a hand here) not because we need the money, but because we like it, that’s not always the case for everyone.

Some of us work longer than 65 because we don’t have a workplace pension, and/or have not saved very much in registered retirement savings plans (RRSPs) or tax free savings accounts (TFSAs).

Recently, we looked up the average RRSP balance in Canada and found that it was just over $101,000. The average Canada Pension Plan payment (CPP) comes in around $672 per month, and the average Old Age Security (OAS) at $613 per month (source, the Motley Fool blog).

Ibbotson is correct about working beyond age 65 – we do it because we love the work and the income, but for those without sufficient savings, we may be working because we need the income. If you have a retirement savings program at work, be sure to sign up and take maximum advantage of it. If you don’t a great option for saving on your own is the Saskatchewan Pension Plan.

A personal note here – this writer’s wife is planning her SPP pension for next year. By contributing close to the maximum each year, and regularly transferring $10,000 annually from her other RRSPs, her nest egg has grown to the point where she plans to select one of SPP’s lifetime annuity options. Her first step was to get an estimate of how much per month she will receive from SPP; she has applied for her Canada Pension Plan, and apparently Old Age Security starts automatically when she hits 65 next year.

We’ll keep you posted on how this goes, but it’s exciting for her to plan life after work, with the help of SPP.

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What the return of inflation will look like for wages, debt and savings

Writing in the Financial Post, noted financial writer Jason Heath takes a look at what the return of inflation will mean for us.

He reports that in February, the consumer price index (CPI) jumped by 5.7 per cent, which “is the biggest increase since August 1991, when inflation was six per cent.”

Since that long-ago peak, he writes, inflation has fallen to much lower levels. Over the last 30 years, it has averaged 1.9 per cent, Heath explains. And, he adds, the Bank of Canada over the intervening years has put policies in place, as required, to keep the brakes on inflation.

Managing inflation through central bank policy is a lot like turning around an ocean liner – you have to make small adjustments over a long time frame. For interest rates, corrective action takes place “typically within a horizon of six to eight quarters,” or a year and a half to two years, he writes.

Despite that effort, our old friend is back, and not just here in Canada. Inflation rates are at 7.9 per cent in the U.S., 6.1 per cent in India, and at 5.9 per cent in the “Eurozone,” he writes.

He then takes a look at its likely impacts.

Higher wages: First, he writes, employers need to look at wage increases. Hourly wages have increased by just 1.8 per cent since 2020. “If inflation remains persistently high, workers whose earnings cannot keep up with the rate of inflation are effectively getting a pay cut,” he notes. They’ll need more wages to pay for the higher price of goods and services, he explains.

Higher interest on debt: If you are carrying a lot of debt, higher interest rates will cut into your cash flow, he writes.

“That cash flow decrease may not be immediate but many mortgage borrowers will see their amortization period increase as more of their monthly payments go to interest and their debt-free date is delayed. This is an important consideration for young homebuyers if they are going to balance their home ownership goals with other priorities like retirement,” he writes.

Even an increase of two per cent in borrowing rates, Heath explains, could add 13 years to your mortgage if you don’t change your monthly payment amount.

Inflation protection for retirees: Heath points out that government pensions – the Canada Pension Plan and Old Age Security – are indexed, and are increased annually based on the rate of inflation. This, he says, is a “powerful” hedge against inflation.

Interest rates are a consideration for those living on savings. If interest rates on your investments don’t keep up with inflation, it will take less time for your portfolio to decline to zero. But if interest rates are higher than inflation, you may still have tens of thousands of dollars in savings 25 or 30 years after you start drawing down your savings.

“In the short run, higher inflation is concerning and can lead to uncertainty. The Bank of Canada is likely to continue to increase interest rates to counter the higher cost of living. There is a risk the rate increases have taken too long to start or may now happen more quickly than expected, and that may have implications for savers, retirees, the economy, and the stock market,” he concludes.

Save with SPP was a youngish reporter in 1991, and remembers that the guaranteed investment certificate (GIC) was still a big tool in one’s investment portfolio in those days, as was the Canada Savings Bond. While interest on such products had been double digit a decade earlier, it was still nice to get five or six per cent interest each year without having to invest in riskier stocks or equity mutual funds.

And while it is exciting to imagine our wages going up by five per cent or more, it is rendered less exciting when the cost of everything is also going up. It was strange, on our recent trip to Whitby to see our new grandbaby, to be “excited” to find gas at the pump for under $1.70 per litre.

What’s a retirement saver to do? If you are following a balanced approach, with exposure to multiple asset classes, you should fare pretty well in a challenging investment environment. An example of that is the Saskatchewan Pension Plan’s Balanced Fund. It has eight distinct and different investment categories in which to place your savings “eggs,” including Canadian, U.S. and Non-North American Equity, Bonds, Mortgages, Real Estate, Short-Term Investments and Infrastructure. If one category is having challenges, it is quite likely that others are performing well – that’s the advantage of a balanced approach. Check out SPP today!

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How much is “enough” when setting an early retirement savings target?

Writing for the GoBankingRates blog, John Csiszar takes a crack at a challenging topic – how much is “enough” when setting your retirement savings goals, particularly if you want to retire early?

“While the fantasy of early retirement sounds great, the reality can be difficult to achieve. If you retire early, you’ll need much more than a standard retirement nest egg to fund the extra years that you will be retired and not working,” he writes.

Drum roll, here – Csiszar next tells us that since a “standard” retirement nest egg should contain one million eggs (all eggs are U.S. denominated in his article), then an early retirement nest egg should cost “$2 million or more, to fund a long, early retirement.”

He then does the math. For those wanting to retire at age 40, they need to first understand that their retirement (according to Internal Revenue Service stats for the U.S.) could last around 45.7 years.

In order to have a “modest” $40,000 income for life starting at 40, you would need to save $1.84 million once you hang up the name tag for the last time.

To get that $1.84 million, he adds, you would need to start saving $92,000 a year beginning at age 20. And even if you could manage that feat, Csiszar adds, you would need to have average investment returns of seven to 10 per cent annually.

Well, OK. What about early retirement at 50?

Csiszar does the math on that idea, with the same goal of having $40,000 in income annually. Americans aged 50 at retirement can expect 36.2 more years of life, so you’ll “only” need $1.448 million in savings. And you’ll need to save $88,266 annually from age 30 to 50 to get the job done.

These are scary numbers, but let’s not overlook the fact that most Canadians will get a Canada Pension Plan (CPP) benefit at retirement, and may also qualify for Old Age Security (OAS) and the Guaranteed Income Supplement (the latter is for lower-income retirees). These don’t start at age 40 or 50, of course, but you can get CPP at 60 and OAS at 65.

The average CPP payout in Canada, according to our friend Jim Yih at the Retire Happy blog, is $645 per month. That’s $7,740 per year. If you were to retire at age 65, and live for 20 years, the CPP (assuming you got the average rate cited here) would provide you $154,800, and that’s not including the inflation increases you would receive each year.

The Motley Fool blog tells us that the average OAS payment in Canada is $613.53, or $7,362.36 per year. If you were to start collecting OAS at 65, and received this average amount for 20 years, you would have received $147,247.20. Again, that figure doesn’t include inflation increases.

These are estimates based on average payouts; what you will actually get depends on your own earnings and employment history. But the point is, these two federal programs can provide a significant chunk of your nest egg – you are not completely on your own in your savings program.

We can save on our own in registered retirement savings plans (RRSPs), and another The Motley Fool blog post shows that the average RRSP balance in the country is $101,555.

Saving a million bucks sounds impossible, but maybe, it’s not as big a mountain as it appears.

Those with company pensions as well as RRSPs, tax free savings accounts, and other savings, can get closer to the target. The value of your home can be a savings factor if you decide to sell and downsize for your golden years.

If you do have a company pension plan, be sure to contribute to the max.

With a committed approach to saving, and assuming you can get decent investment returns with low fees, we can all get a little closer to that “standard” savings level. For those without a company pension plan, consider the Saskatchewan Pension Plan, which currently allows you to save $7,000 annually toward retirement (you can also transfer in up to $10,000 a year from other RRSPs). The SPP has a stellar investing track record – the average rate of return has been eight per cent since the plan’s inception in 1986. And while past rates of return don’t guarantee future rates, the SPP has been helping people build their retirement security for 36 years. Check out SPP today!

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Few Canadians “defer” their Canada Pension Plan or Old Age Security to a later start date

Writing in the Globe and Mail, Patrick Brethour reports that “only a tiny fraction” of Canadians are deferring public retirement benefits like the Canada Pension Plan (CPP), “a decision that could cost each of them tens of thousands of dollars in foregone payments.”

You can collect CPP as early as age 60, but can defer receiving it until age 70, he explains. While CPP benefits are reduced if you start collecting them while you are age 60 to 64, “CPP benefits increase by 0.7 per cent for each month of deferral past age 65, hitting a maximum increase of 42 per cent at age 70.”

You can also defer your Old Age Security (OAS) payments, he notes.

“Deferring the OAS is slightly less lucrative, with those payments rising by 0.6 per cent for each month of deferral, to a maximum of 36 per cent at age 70. A person who was eligible for the maximum regular payments under CPP and OAS and who opted for a full five years of deferral would receive an additional $10,168 a year excluding clawbacks, based on current rates,” he writes.

Citing data from Employment and Social Development Canada, the Globe report notes that 62 per cent of us start our CPP while age 60 to 64. Twenty-seven per cent start it at age 65. Seven per cent start it while age 66 to 69, and just four per cent start it at 70.

For OAS, “the picture is even more lopsided,” as almost no Canadians defer their payments – 93.6 per cent of us start it at 65.

So why aren’t more people deferring until age 70 (and getting up to $10K more per year), as experts like Dr. Bonnie-Jeanne MacDonald have urged?

The article cites several reasons for not waiting – many “can’t afford the delay,” and start receiving benefits as soon as they can. For poorer Canadians who lack other retirement savings, the federal payments are “a lifeline,” the article notes, adding that senior poverty rates for Canadians “fall as they enter their 60s” due to receiving CPP and OAS.

Next, if you don’t expect a long life, deferring the benefits is a poor idea. Save with SPP has had relatives and friends who passed away before even reaching age 70.

Finally, those of us still working as we hit age 65 tend to opt to receive CPP, because if we don’t, we still have to pay into it without getting any additional benefit from it.

Save with SPP’s circle of friends and family is split on this issue. Those without workplace pensions took CPP as soon as it started. Some who did have a pension started it at 60, asking “why leave money on the table?” Others with workplace pensions that have a “bridge” benefit (which ends at 65) have long planned to start CPP and OAS when the bridge benefit ends. We have one friend who started CPP at 60 and is now about to turn 67 and is still working (and still paying into CPP). We have one relative who plans to take her CPP at 70 to max out the benefit, even though she is not working steadily at the moment.

It would seem it’s a personal choice for most people, based on their unique financial circumstances. The one important takeaway here is simply to know that you do have the option to get a bigger payment if you choose to start it later.

The Saskatchewan Pension Plan allows you to collect your benefits at any time you choose between age 55 and 71. The SPP’s Retirement Guide provides full details on your options for your SPP account when it comes time to retire, including SPP’s range of lifetime annuities. And you don’t have to stop working (as is the case with most company pension plans) to start collecting SPP! Be sure to check out SPP today.

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Is inflation causing Canadians to fear they aren’t saving enough for retirement?

Writing for the Canadian Press, via Canoe, Christopher Reynolds notes that inflation is causing the price of almost everything to go up – including retirement.

Citing recent research from the Bank of Montreal, Reynolds notes that “Canadians are losing confidence they’ll have enough cash to retire as planned,” with fewer than half believing they can hit their savings target.

That’s because inflation is boosting the value of that theoretical retirement piggy bank, he writes. “The average sum (Canadians) anticipate needing has increased 12 per cent since 2020 to $1.6 million,” he writes.

Last year, he continues, 54 per cent of those surveyed felt they would reach their savings targets; the most recent research shows that number has dropped to 44 per cent.

“Inflation,” states Robert Armstrong of BMO Global Asset Management in the article, “is starting to impact their views on how much they need to save for retirement.”

The price of housing, the article continues, is “another source of angst,” with the average home price in Canada rising to a record $748,450 in January. That’s a year over year jump of 21 per cent, the article notes.

Those who don’t own their own homes not only face higher rents, but don’t have the “automatic nest egg” associated with being able to sell one’s principal residence without paying capital gains taxes, the article notes.

Another problem retirement savers face is the shortage of good workplace pension plans, Reynolds writes. Only about 25 per cent of Canadians are covered by defined benefit pension plans, which provide a guaranteed monthly lifetime income. Just seven per cent enjoy being members of defined contribution plans (like the Saskatchewan Pension Plan), where future payouts depend on how much is saved and invested.

Those numbers, the article continues, are “still far below those of the ‘70s, ‘80s and early ‘90s when the rates were consistently above 40 per cent.” That information, Reynold adds, comes from Statistics Canada.

Jules Boudreau of Mackenzie Investments tells the Canadian Press that these factors – inflation, high housing prices, and a general decline in workplace pension plan coverage – put a lot of pressure on younger retirement savers.

“The personal retirement portfolio of a young worker is much more critical, because their retirement hinges entirely on it — and that can create more anxiety, more uncertainty,” Boudreau states in the article. As well, the article concludes, many younger people are not focusing on long-term retirement savings, such as registered retirement savings plans (RRSPs), but on “short term” things like getting a home, furnishing it, and starting a family.

While the average RRSP balance in Canada as of 2020 was $101,155 – a figure that is growing – the Motley Fool blog says that seemingly high amount will only generate about $3,500 of income per year. And it’s far short of the $1.6 million target mentioned by Reynolds in his article.

If you are part of the majority of working Canadians who lack a pension or retirement program at work, the Saskatchewan Pension Plan may be just what you’ve been looking for. The SPP is a do-it-yourself, end-to-end defined contribution pension plan. You can contribute up to $7,000 every year, and SPP will invest your contributions in a low-cost, professionally managed pooled fund. When it’s time to unshackle yourself from the rat race, SPP has a number of options for turning those savings into income. Make SPP part of your personal retirement program today!

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Is “semi-retirement” a way to address a lack of readiness for “full” retirement?

Could the lack of adequate retirement savings prompt most of us to move to “semi-retirement” following the end of full-time work?

Writing for the GoBankingRates blog, Vance Cariaga notes that semi-retirement may be “where a lot of boomers might be headed, as employers try to convince older staffers to stick around longer in a labour market plagued by a shortage of workers.”

He notes that recent research by The Harris Poll in the U.S. reveals that only 48 per cent of employees believe their companies have “an adequate successor in place when they do retire.”

“One potential answer,” writes Cariaga, “is ‘semi-retirement.’ This might take several different forms, ranging from flexible schedules and consulting work to reduced hours,” he notes.

The Harris research found that “most employees would take part in semi-retirement if it were offered. Nearly eight in 10 (79 per cent) favoured doing so through a flexible work schedule, while 66 per cent said they would be willing to transition to a consulting role…and 59 per cent said they would be open to reduced hours and benefits. But only about one in five (21 per cent) said their employers offer semi-retirement options.”

The idea of encouraging older workers to hang around is a pretty big change. It’s not that long ago that retirement was mandatory at age 65, and most people completely left the workforce and entered the Golden Years without a backward glance. This practice is now known as “full retirement,” where the retirees do no work of any kind.

So what’s changed from long ago to now?

The article notes that two things are driving the new outlook for semi-retirement – the lingering effects of COVID-19, and a general lack of retirement saving.

Regarding COVID, Cariaga writes, “more than one-fifth of the survey respondents said the pandemic has caused them to delay their retirement plans, while about one-tenth said COVID convinced them to retire earlier than planned.”

However, he adds, “a much larger percentage — more than two-thirds — said they are worried about saving enough for retirement, making them prime candidates for work arrangements that would let them keep earning money.”

The article concludes by suggesting that employers “investigate all available alternatives to fill their payrolls.”

Save with SPP has friends and family members who are still working into their 60s and beyond. When we asked why, some said they wanted to max out their company pensions and government benefits by retiring at 70. Others still had younger kids in post-secondary and/or mortgages to finish off. Some just like working, love the people at work, and the fun of being part of a team. A few really like remote work and are hanging in while it is still available.

All valid reasons.

There is a factor to be aware of with the “let’s just keep working” approach to retirement planning, however. If, heaven forbid, one gets ill, or develops a physical problem that prohibits working, that retirement date may get moved forward, rather than into the future. So don’t lose sight of the importance of retirement saving.

If you have a pension plan at work – or you wish to supplement it – consider the Saskatchewan Pension Plan. Once you’ve joined, you decide how much you want to contribute, and SPP does all the rest. SPP professionally invests your savings, building them over time, and can turn them into an income stream at any time once you reach age 55.

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Retirement savings is just a key first step in the process: IG Wealth

No one applauds retirement savings of any sort more than Save with SPP, but new research from IG Wealth suggests most of us don’t think about the many other steps in the retirement process.

The research is covered in a recent article in Wealth Professional.

The article points out that two-thirds of Canadians over 18 have registered retirement savings plans (RRSPs), and “57 per cent plan to invest in theirs” before the 2022 deadline.

As well, the average amount in our RRSP kitties is around $13,000, the article reports. All good, right?

But, the article asks, have many of us thought about the other issues retirement presents?

“Investing for retirement is just one piece of the overall retirement readiness puzzle,” IG Wealth’s Damon Murchison tells Wealth Professional. “It’s important to be thinking about retirement planning in a more holistic manner, and as a key component of an overall financial plan.”

So what are we not sure about, retirement-wise?

First, the article reports, the survey found that only 21 per cent “understand taxation of retirement income.” Those of us who are no longer working for the old company know all about this – the easy days of having the payroll department deduct enough from your pay so that you always got a tax refund are over. It’s trickier to figure things out when you are getting income from multiple sources.

Next, we are informed, only around 21 per cent have thought about their insurance needs. Once the office is far off in your rearview mirror, you may not have any drug, dental or vision coverage. Have you factored in the cost of getting this on your own, or checked out to see what your province or territory may be able to help you with?

Only 19 per cent have thought about estate planning, only 18 per cent have thought about their budgets, the article notes.

Save with SPP has had several friends who passed away suddenly, and without making a will. Without getting into this complex topic, let’s just say a will helps ensure your stuff goes to who you want it to go to. Without one, the process is slower, costly and complex, and at best is a guess by someone else of what you ought to have wanted.

A budget is highly recommended. And it doesn’t have to be a mega-detailed spreadsheet. As a former colleague of ours once explained in a masterful one-page financial planning document, it’s just knowing how much of your money needs to go to expenses, and how much is left to spend or save. When you’re retired, your expenses will probably be less, but so will your income, so the clearer the idea you have about your total retirement income, the better off you will be.

If you’re a member of the Saskatchewan Pension Plan, one way to be certain about your SPP income is to consider transferring some or all of your savings into an SPP annuity.

An annuity delivers you the same monthly payment for the rest of your life. The Canada Pension Plan and Old Age Security also give you a predictable monthly income. That income certainty will make budgeting and tax planning a whole lot less painful.

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