Book Reviews

Trash Your Debt offers sensible advice on slaying the debt monster

June 17, 2021

Getting rid of debt is very similar to de-cluttering. You want to take action, but when you actually sit down and look over just how much there is – more than can be got rid of quickly – it soon becomes daunting, and easier to retreat than to move forward.

Trash Your Debt, by Arnold D. Fredrick, is a nice little book that can help you make progress.

He tells the tale of his early days of maxed out credit cards, car loans, medical bills (he’s in the U.S.) and more, leaving “about $25 per two weeks for food,” and finding themselves “$100 more in the hole every two weeks.” He had out of control debt that was growing, he explains.

The way forward, he writes, is “do something! Sounds a little simple, but in that simple statement lies the secret. Doing something is going to get you out of debt years faster than doing nothing. Doing something will propel you to financial freedom and out of the slavery of debt.”

First, he advises, write down the “why” of getting out of debt, the goals you want to achieve, and the “daily, weekly or monthly steps to achieving your goal.” The goals are important – setting a target means you can measure your progress.

The how involves setting a budget, he writes. And it involves the seemingly simple idea that you must “stop spending more than you make.” He likens the situation to a bathtub that leaks – the more leaks you have (expenses), the more money it takes to fill the tub.

When he looked at his family’s income and expenses, he saw that he was consistently spending more than he earned. So he made spending cuts – cable TV was cut to basic, lunches for work were packed, a meal plan assisted grocery shopping, they bought in bulk and on sale, they shopped for a better phone plan, and more. “Save all the savings,” he says.

Another nice concept in the book is that of the “10 per cent, 10 per cent, 80 per cent” rule. Consider giving 10 per cent to charity, save 10 per cent for your future, and live on the remaining 80 per cent, he explains.

In addition to setting aside money for good causes or charity, setting aside 10 per cent “for you” is essential. “So many people go through life working for someone else and never pay themselves from what they earn,” he explains. Putting away money as you start your career can make your retirement much easier, he notes.

Fredrick is not a believer in cash. He likes a “Visa check card,” (similar to a debit card) because he has a record of all his spending and can quickly spot “trends” where his family may be overspending. With cash, you get no such record, he says. He also recommends cancelling credit cards as soon as you pay them off. Try, he writes, to pay off the higher-interest card first.

Near the end of the book he says there is a monster within us that gets in the way of financial freedom. “The monster is the thing within you that stops you from achieving your greatest potential. For some, the monster is fear – fear of success, fear of change, fear of being responsible or fear of failure. Fear is a strong monster.”

The monster can be killed, he concludes, by small, steady and daily actions. “Don’t let a single day go by without taking a stab at your monster,” he says.

This is a fun, candid, and well-thought-out little book that’s a fine addition to your financial bookshelf.

Just as we can kill a large debt by chipping away at it slowly and regularly, we can also build up our retirement savings little by little. The Saskatchewan Pension Plan permits you to contribute via your online banking platform. SPP can be set up as a bill, and you can chip in little amounts — $10 from a scratch ticket, $5 from returning empties, $100 from a yard sale – as you go. You’ll be amazed how those tiny additions to your nest egg can add up. Check out SPP today!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Book helps women get into the swing of investing

May 20, 2021

Grow Your Money, by Bola Sokunbi, is part of a series from CleverGirl Finance on helping women manage money, in this case, investments.

And while women are the intended audience, there’s a lot of great advice for everyone in this well-written book, which while U.S. focused, does explain Canadian investing and retirement ideas as well.

Sokunbi starts by saying those who are fearful of investing should realize that “investing is like learning a different language.” And once you are familiar with that language, “you can get the hang of it, and really grow your money.”

After all, she notes, the only ways to make money are by working or investing. The latter can be a lot less difficult, the book notes.

Women, who traditionally earn between 58 to 87 per cent of what men earn, typically end up with $430,480 less than men over their working lives. “This is not okay,” writes Sokunbi.

Worse, while women are better savers than men, they tend to be very conservative, put 70 per cent of their savings in cash, and may not sign up for retirement savings plans at work, the author notes. That can mean leaving free money on the table, she warns.

Sokunbi provides an overview of the U.S. and Canadian stock markets, and then explains how compounding – whether it is interest, dividends, or capital gains – can help your investments earn more money. She explains the rule of 72 can tell you how quickly you can double your money through compounded rates of return – if you are averaging a five per cent rate of return, you can double your money in 14.4 years, she notes.

She sees a few conditions you need before starting off on investing, including have a steady income, the ability to meet your financial obligations, emergency savings, and no high-interest debt.

Good choices for beginning investors are managed mutual funds, index funds, and exchange-traded funds, she explains. With managed mutual funds, “a fund manager… make(s) investment decisions for the fund and set(s) the fund objectives, with the main goal of making money” for investors. Index funds are “passively managed,” where its component investments match the components of a market index. Exchange-traded funds are similar (passive) but may be focused on other market sectors and indices.

Index and ETF funds – passive – have lower investment costs, typically less than one tenth of one per cent. A managed mutual fund is generally in the one to two per cent range because you are paying for active management, she explains.

You can invest with a full-service broker, a discount broker, or an online broker/robo-adviser, she says. Again, fees are based on the level of service.

When researching what to invest in, look at the company or fund’s financial situation and future plans, its historical performance, its objectives and its expenses and fees, writes Sokunbi.

Another good idea is to practice before you put your toe in the water – most financial institutions offer “practice simulation accounts,” where you can try your investment ideas before you buy.

Things not to do include waiting around to invest (“time is your biggest asset and the best time to start investing is right now”), getting emotional with investing, timing the market, expecting “overnight returns” on investments and not thinking about taxes for the long term.

This is a great read. The tone is friendly and informative, there are charts and examples, and even testimonials to move you along from concept to concept. It’s well worth checking out.

The Saskatchewan Pension Plan operates much like a managed mutual fund, but with fees of less than one per cent. That low investment management fee means more money in your SPP account, particularly over time. Why not take advantage of the SPP as a key retirement tool today, as the plan celebrates its 35th anniversary in 2021?

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Detailed investing book – endorsed by Warren Buffett – is an encyclopedia on investing

March 25, 2021

The incomparable Warren Buffett calls The Intelligent Investor, by Benjamin Graham, “the best book on investing ever written.”

And it is Buffett himself who provides a forward and appendix notes on the latest, revised edition of this classic investing text by Graham, his mentor.

This is not a book you can sit down and breeze through in a day or two – Graham’s original work is deep on statistics, charts, and examples, and the updated commentary is no less detailed.

The book contrasts speculation with investing. The book talks about the so-called dot.com bubble earlier this century, a time when, with “technology stocks… doubling in value every day, the notion that you could lose almost all your money seemed absurd.” However, the book notes, by 2002 many stocks had lost 95 per cent of their value.

“Once you lose 95 per cent of your money, you have to gain 1,900 per cent just to get back to where you started,” the book notes. Avoiding losses, the book states, is a central platform for intelligent investing.

While there’s a place for speculation, writes Graham, “there are many ways in which speculation may be unintelligent. Of these, the foremost are: (1) speculating when you think you are investing; (2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and (3) risking more money in speculation than you can afford to lose.”

By contrast, defensive intelligent investors must confine themselves “to the shares of important companies with a long record of profitable operations and in strong financial condition.” These choices must be based on “intelligent analysis,” the book explains.

Bonds can’t be overlooked, Graham writes. “Even high-quality stocks cannot be a better purchase than bonds under all conditions.” Both belong in people’s portfolios, he states.

While a 50-50 stocks/bonds portfolio is a sensible mix, Graham says you should allow yourself to go up to 75/25 in either category when conditions warrant.

While bonds are considered “less risky” than even good preferred stocks, Graham warns they aren’t completely safe. “A bond is clearly unsafe when it defaults its interest or principal payments,” he explains – and the same risk exists when a stock reduces or cancels its dividend.

On the idea of buying low and selling high, Graham suggests it is better for people “to do stock buying whenever (they) have money to put in stocks, except when the general market level is much higher than can be justified by well-established standards of value.”

The book warns about buying into funds or securities that are on a hot streak. “If a manager happens to be in the right corner of the markets at just the right time, he will look brilliant,” we are told. But, the book warns, the market’s hottest sector “often turns as cold as liquid nitrogen, with blinding speed and utterly no warning.” Buying stocks or funds based on past performance “is one of the stupidest things an investor can do,” the authors conclude.

On do-it-yourself investing, Graham is clear.

“There is no reason at all for thinking that the average intelligent investor, even with much devoted effort, can derive better results over the years from the purchase of growth stocks than the investment companies specializing in this area,” he writes. “Surely these organizations have more brains and better research facilities at their disposal than you do.”

The commentary section for this chapter expands the argument. While some people believe that “the really big fortunes from common stocks… have been made by people who packed all their money into one investment they knew supremely well,” Warren Buffett says “almost no small fortunes have been made this way – and not many big fortunes have been kept this way.”

Diversification is key, he warns, or else you will “stand by and wince at the sickening crunch as the constantly changing economy” crushes your only basket and all your eggs.

“If you build a diversified basket of stocks whose current assets are at least double their current liabilities, and whose long-term debt does not exceed working capital, you should end up with a group of conservatively financed companies with plenty of staying power,” the book advises.

A tip about Buffett is that he “likes to snap up a stock when a scandal, big loss, or other bad news passes over it like a storm cloud.” He bought into Coca-Cola after the disastrous “New Coke” launch in 1985.

This is a heavy read, but it’s well worth the effort.

If you’re looking for diversification in your retirement savings, consider the Saskatchewan Pension Plan. SPP’s Balanced Fund presently features 50 per cent equities (Canadian, American and non-North American) with the other 50 per cent in bonds, mortgages, real estate, short-term investments and infrastructure. That’s a lot of baskets for those precious retirement nest eggs.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Pape’s book provides solid groundwork for a well-planned retirement

March 4, 2021

Gordon Pape has become a dean of financial writers in Canada, and his book Retirement’s Harsh New Realities provides us with a great overview of our favourite topic.

There’s even a shout-out to the Saskatchewan Pension Plan!

While this book was penned last decade, the themes it looks at still ring true. “Pensions. Retirement age. Health care. Elder care. Government support. Tax breaks. Estate planning,” Pape writes. “All these issues – and more – are about to take centre stage in the public forums.”

He looks at the important question of how much we all need in retirement. Citing a Scotiabank survey, Pape notes that “56 per cent of respondents believed they would be able to get by with less than $1 million, and half of those put the figure at under $300,000” as a target for retirement savings. A further 28 per cent thought they would need “between $1 million and $2 million.” Regardless of what selection respondents made, getting that much in a savings pot is “daunting,” the survey’s authors note.

Government programs like the Canada Pension Plan (CPP), Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) help, but the benefits they provide are relatively modest. “If we want more than a subsistence-level income, we have to provide it for ourselves,” Pape advises.

He notes that the pre-pandemic savings rate a decade ago was just 4.2 per cent, with household debt at 150 per cent when compared to income. Debt levels have gone up since then. “Credit continues to grow faster than income,” he quotes former Bank of Canada Governor Mark Carney as saying. “Without a significant change in behaviour, the proportion of households that would be susceptible to serious financial stress from an adverse shock will continue to grow.” Prescient words, those.

So high debt and low savings (they’ve gone up in the pandemic world) are one thing, but a lack of financial literacy is another. Citing the report of a 2011 Task Force on Financial Literacy, Pape notes that just 51 per cent of Canucks have a budget, 31 per cent “struggle to pay the bills,” those hoping to save up for a house had managed to put away just five per cent of the estimated down payment, and while 70 per cent were confident about retirement, just 40 per cent “had a good idea of how much money they would need in order to maintain their desired lifestyle.”

One chapter provides a helpful “Retirement Worry Index” to let you know where your level of concern about retirement should be. Those with good pensions at work, as well as savings, a home, and little debt, have the least to worry about. Those without a workplace pension, with debt and insufficient savings, need to worry the most.

If you fall anywhere other than “least worried” on Pape’s list, the solution is to be a committed saver, and to fund your own retirement, he advises. He recommends putting away “at least 10 per cent of your income… if you’re over 40, make it a minimum of 15 per cent.” Without your own savings, “retirement is going to be as bleak as many people fear it will be.”

Pape recommends – if you can — postponing CPP payments until age 70, so you will get “42 per cent more than if you’d started drawing it at 65.” RRSP conversions should take place as late as you can, he adds. This idea has become very popular in the roaring ‘20s.

Pape also says growth should still be a priority for your RRSP and RRIF. “Just because you’ve retired doesn’t mean your RRSP savings need to stagnate,” he writes. And if you find yourself in the fortunate position of “having more income than you really need” in your early retirement needs, consider investing any extra in a Tax Free Savings Account, Pape notes.

Trying to pay off debt before you retire was once the norm, but the idea seems to have fallen out of fashion, he writes. His other advice is that you should have a good idea of what you will get from all retirement income sources, including government benefits.

In a chapter looking at RRSPs, he mentions the Saskatchewan Pension Plan. The SPP, he writes, has a “well diversified” and professionally managed investment portfolio, charges a low fee of 100 basis points or less, and offers annuities as an option once you are ready to retire.

This is a great, well-written book that provides a very solid foundation for thinking about retirement.

If you find yourself on the “yikes” end of the Retirement Worry Index, and lack a workplace pension plan, the Saskatchewan Pension Plan may be the solution you’ve been looking for. If you don’t want to design your own savings and investment program, why not let SPP do it for you – they’ve been helping build retirement security for Canadians for more than 35 years.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Preparing for golden years that may last until you turn 100

February 4, 2021

While The Good Retirement Guide 2020 is intended chiefly for a U.K. audience, this very thorough look at life after work – edited by Jonquil Lowe – covers a lot of very useful ground.

The book begins by noting that “the age at which we consider ourselves to be old is steady moving upwards,” noting that 20 per cent of Europeans don’t feel old by age 80. We’re transitioning from a time when people retired at 65 and were retired for maybe 10 years, to an era where “one in three of today’s babies in the U.K. will live until they are 100.” Retirement, the book tells us, can now last for 25 years of more, a fact that requires some “radical rethinking” on retirement to ensure a positive experience.

Because fewer of us (as true here in Canada as in the U.K.) have workplace pensions, which are “fading fast,” more retirees are exposed to “the three great risks of retirement,” which are:

  • Longevity risk – outliving your savings
  • Inflation risk – the buying power of your money falling over time
  • Investment risk – being exposed to the ups and downs of the stock market

In the U.K., the book tells us, recent research from Aviva finds that “over three quarters of pensioners are worried about the rising cost of living and having to continue working to make ends meet.”

The book says this type of worry can be addressed by a proper budget. If you lack accounting skills, consider a “spending diary” instead, which will achieve the same goal – “knowing how much you spend,” the books suggests. Such a diary can be set up with a notebook, a spreadsheet, or an app on your phone. Knowing what goes out – and looking for savings on the expense side – is a critical way to manage living on what’s coming in when you are retired, the book points out.

One thing many of us overlook when planning our retirement spending is the need to pay for care when we are older. “Increasingly, people are fit and well when they reach retirement and with luck that will continue for a long time,” the book advises. However, not all of us will make it all the way to the end without the need for long-term care, which can cost “more than 100,000 pounds,” which is more than $175,000 in Canadian dollars.

The book takes a look at pensions, noting that defined benefit plans, which are chiefly available to public sector workers, offer the promise of a “known proportion of your pay when you retire.” More common in Britain (and here) are defined contribution plans, where “the money paid in by you and your employer is invested and builds up a fund that buys you an income when you retire.”

DC plan members can choose an annuity, which “provides a secure income for the rest of your life,” or a “drawdown,” where the funds remain invested, and you withdraw a specified amount each year. The book recommends a drawdown rate of four per cent if you are going that route. The book offers a description of a variety of different annuities you may be able to buy, including joint-life annuities, where your surviving spouse can also receive a lifetime income.

If you are investing on your own for retirement, the book recommends a balanced approach, with some cash investments (short term, fixed income), some bonds (called “an IOU from the government or big companies), some real estate (either a rental property or exposure via real estate investment funds), and equities – stock in traded companies.

The book cites a rule of thumb often heard in pension circles – if you are investing on your own, your age should be the percentage of your portfolio that is in bonds. So if you’re 60, you should have 40 per cent in equities and 60 per cent in fixed income.

This approach is designed to manage risk (i.e., you reduce risk as you age), and the book says that’s important. “In general, there is no point taking so much risk that you have sleepless nights,” the author advises.

The book covers off many other topics – should you move to a smaller or newer home, or upgrade your existing home? There’s a detailed chapter on leisure activities that actually lists the various organizations in the U.K. that support your activity of choice, be it education, the arts, gardening, and much more.

As a senior, you may find you get a great rate – sometimes even free fares – on public transit, a great way to get around for less.

Importantly – especially given the whole “80 is the new 60” theme of the book, there’s a look at how you may be able to continue to work in your younger senior years, maybe part time at where you used to work full time. There’s detailed information on the value of doing volunteer work. There’s a long chapter on the importance of maintaining your health for the long retirement journey ahead of you. And there’s even a look at wills and inheritance, again from a U.K. perspective.

This is a very well-written, thorough look at a vast topic; congratulations to Jonquil Lowe on a job well and expertly done. As mentioned, while Canadian laws, tax rules, and estate practices are different, the core information in this book is as valuable here as it is to our cousins across the pond.

The Saskatchewan Pension Plan has all the tools you need to set up a personal pension plan. They’ll invest the contributions you make, grow them via low-cost, professional investing, and present your future self with retirement options in the future, including lifetime pensions. Check them out today!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Book offers more than 365 reasons why “retirement rocks – and work sucks”

January 28, 2021

It’s often very, very difficult to explain to non-retirees what it is like to no longer be at work.

Until now, that is! The Joy of Being Retired by Ernie J. Zelinski is a brilliant, funny look at the differences between retired life and the chains of the workforce, told in about 400 little anecdotes. This is a great read – you could consider reading one item each morning to start your day.

Here are some examples.

Reason 1 notes that “a truly satisfying and happy retirement includes interesting leisure activities, creative pursuits, physical well-being, mental well-being, a defined sense of purpose, and a great sense of community.”

You will, as a retiree, be “exchanging a gruelling nine-to-five routine for a well-earned casual and carefree lifestyle,” advises Reason 4. “You can play golf every day of the week,” suggests Reason 8.

Reason 15 quotes Canadian educator Laurence J. Peter as saying “the time you enjoy wasting… is not wasted time.”

Reason 26 thinks about the tax implications of retirement. “In retirement, generally speaking, you earn less money with the result that you pay a lot less income tax. And if you have always hated paying income tax, this should make you truly happy.”

Acting your age is no longer required in retirement, notes Reason 34. “You are never too old to become a little bit younger in spirit,” we are told.

The benchmarks of life change when we leave the workforce, states Reason 71. “Working life is when you judge your success by promotions, salary, and raises; retirement is when you judge your success by the degree that you are enjoying peace, health, love, and your dog.” Similarly, reason 116 says that whether your work was in a “corporate maze or a corporate prison… retirement sets you free from whatever it is.”

Reason 192 is one that Save with SPP has noticed – every day feels like a holiday. Truth be told, once you aren’t working you often don’t realize there’s a holiday going on until you run into long lines at the drive-thru.

Reason 218 points out that the average Canadian spends 26.2 minutes travelling to work, and 26.2 minutes returning home. This travel time, which doesn’t exist for retirees, “can rob you of a major part of your life.”
You can read the newspaper cover to cover in one go, says Reason 236.

“No more meetings,” boasts Reason 331. That’s one aspect of work that Save with SPP was extremely glad to see the end of, years ago.

If you are working away and worried about what retirement will be like, this is an excellent and recommended read. In fact, companies holding pre-retirement planning sessions would be smart to include this insightful, easy-to-digest and hilarious tome in the course materials.

Retirement fun can be even greater if your post-work pockets are a little deeper. This can be accomplished through retirement savings. If you haven’t got a workplace pension plan or want to augment it, why not check out the Saskatchewan Pension Plan? They uniquely can help you save, invest the savings, and turn that nest egg into a lifetime income stream – a one-stop shop for retirement security.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


The Sleep-Easy Retirement Guide takes some of the surprises out of life after work

December 31, 2020

If there’s one thing that working Canadians can’t quite grasp with their imagination, it’s what things will be like when they step away from full-time work.

David Aston’s The Sleep-Easy Retirement Guide is a great and refreshingly Canadian-focused look at what lies ahead – and what you need to think about to ensure you make the best of it.

The book begins by noting that the old days of “full-stop” retirement at 65 are gone. “You can retire much earlier than 65 or much later. You can leave work full-stop, or you can work in a second career, or you can work as little or as much as you want or need to with part-time employment or on contract,” he writes. You can also start a business or just go for “the traditional retirement of leisure.”

So saving, Aston writes, is a bit tricky, because you normally start saving “many years ahead of when you will have a clear picture of what your financial demands will be in retirement.”

Aston sees three “paths” for retirement savings. The “Steady Eddie” approach involves saving “at a constant rate throughout your working life.” If a 25-year-old put 10 per cent of his or her salary into retirement savings annually for 40 years, there would be $1 million in the nest egg at age 65.

Other approaches give you the same result – a “gradual ramp up” means you start at six per cent per year and increase to 30 per cent for the 25 years before age 65. Or, there’s the “mortgage first, save later” approach where, after mortgage is done, you save 35 per cent of income for the 13 years left to retirement.

If working part-time, or at something different, is part of your “life after full-time work” plans, Aston provides a handy list of tips for older job-hunters, who may not have looked for work for a while. Among the tips are getting familiar with today’s more tech-focused approach to human resources, such as the use of Skype or FaceTime for interviews, and LinkedIn for shopping your resume around.

The book has many great chapters focused on decision points. Maybe you’re at age 65 with a reasonable stash of money in your RRSP. Aston’s detailed charts show how retiring at 68 instead can boost your annual cash flow by an impressive $11,360, thanks in part from holding off on withdrawals from savings and taking Canada Pension Plan and Old Age Security benefits later.

Another set of tables looks at what couples and singles spend in retirement. For an average couple, here’s what goes out: $44,000 a year for shelter, mortgage, vehicles, groceries, health and dental, home and garden, clothing, communication, financial services and transportation. But wait, there’s more – they’ll spend a further $16,400 on “the extras,” which include recreation and entertainment, restaurants and alcohol, a second home, travel, pets, gifts and charities, and miscellaneous perks.

Aston says an important concept is to have a “sustainable withdrawal rate” from savings, so that you don’t run out. He recommends taking four per cent out of your savings each year, if you start at age 65. The four per cent figure assumes “a blend of both investment returns and drawdown of principal.”

If you don’t want to risk running out of savings, Aston says an annuity may be for you. “An annuity gives you the opportunity to purchase your own defined-benefit pension plan,” he explains. They “are an ideal product for many middle-class Canadians who are concerned about outliving their wealth,” Aston adds.

This well-written, thorough and very informative book ends with some very good advice. “Behind the goal of a life well lived,” writes Aston, “it helps to have the support of finances well-managed.”

Did you know that Saskatchewan Pension Plan members have the option of receiving their savings in the form of a lifetime annuity? The annuity delivers you a payment that stays the same, and lands in your bank account every month for the rest of your life. And, depending on what annuity option you pick, it can continue on to your surviving spouse. Not an SPP member yet? Check their website and find out how you can sign up!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Nov 23: Best from the blogosphere

November 23, 2020

An old idea makes a comeback – annuities

An investment idea for retirees that you don’t hear about as often as you used to seems to be making a comeback.

A recent article in Investment Executive suggests that today’s volatile markets and uncertain economy may be perfect conditions for some of us to consider buying annuities.

An annuity is a product you purchase with all or part of your retirement savings. Once purchased, the annuity pays you a monthly amount for the rest of your life – a guaranteed amount that doesn’t change, even if markets decline. They were much more common decades ago when interest rates were high.

“Annuities are one of the best ways to plan for retirement if you are worried about volatility in the market, feel you will run out of money before you die and do not want to manage the investments,” states Markham, Ont. financial planner Ahilan Balachandran in the Investment Executive article.

He does point out that the current low-interest rate environment is not generally favourable for annuity purchases, since you basically “lock in” at a low interest rate. Annuities provide higher payouts when interest rates are higher, he explains in the article.

But it’s not all about interest rates, points out another financial expert.

“After 35 years of being in the business of selling annuities, I conclude that rates are not the primary consideration for a person to purchase an annuity,” states White Rock, B.C. annuity broker John Beaton in the article. “People are not as worried about interest rates as they are about establishing a lifetime stream of income.”

He tells Investment Executive that annuities offer “peace of mind” for retirees.

“Some people understand that a time will come when they will suffer from diminished capacity to handle their affairs. Not having to worry about how things will be paid is more important,” Beaton tells the magazine.

And Burlington, Ont. investment advisor Jim Ruta says while interest rates may be low, there are other reasons to think of an annuity.

Now that markets are so uncertain, he states in the article, “you can guarantee yourself a multiple of what interest rates are with an annuity.”

This is a somewhat complex topic. We tend to confuse retirement savings with wealth generation – for many of us, our retirement savings are the biggest chunk of cash we have. It’s never easy to think about trading some or all of that nest egg for the security of a monthly, set income.

But an annuity is a way to “pensionize” some of your savings. You saved all this money to provide future income, an annuity allows you to get a monthly pension – for life – from your savings. If you invest your retirement savings and draw it down each year, there’s a risk you can outlive that lump sum amount. That risk disappears if you have purchased an annuity.

The Saskatchewan Pension Plan (SPP) offers you a wide variety of annuity choices when the time comes to convert savings to an income stream. The SPP pensions page has details on SPP’s annuity options.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Trade rocking chair for your best life, urge Victory Lap Retirement authors

November 19, 2020

Time was, write the authors of Victory Lap Retirement, that retirement meant “a few years of passive leisure” once you had put in 35 years on the job, a short period of time in the rocking chair since most retirees in the old days “were not in robust enough health to partake in active leisure.”

Now that we are living longer and in better health, authors Mike Drak, Rob Morrison and Jonathan Chevreau think we should create a new stage of life between work and full retirement, which they are calling the “Victory Lap.”

“In your Victory Lap, you continue to work, but you have the luxury of choosing to do only work that gives you what you want. Money and security are no longer the main motivators, because achieving financial independence has finally allowed you to make a change in your priorities,” they write. So the Victory Lap, they explain, is a “period of freedom… living like a kid for as long as possible and squeezing every ounce out of life.”

The three authors say that “instrumental” factors in the quest for the Victory Lap are:

  • Maintaining your physical and mental health
  • Adopting a positive attitude
  • Ensuring that your financial plan is aligned with your life plan

This well-thought-out book challenges some of our long-held beliefs about work and money. Why, the authors ask, do we allow ourselves to become so financially dependent on our jobs and salary? Why are we “driven into complete economic dependency through debt, new family needs and consumerism… salaries and bonuses may keep racing, but lifestyle inflation outpaces them, resulting in more consumption and more debt.” We work on, “unhappy… and suffering,” the book warns.

An escape plan, the authors suggest, is necessary. “A full-stop retirement is not the best way to go… instead, we should be focusing our efforts on making a great life while we still have the time.”

A “Victory Lap” approach frees you from the rat race, “to start over and design a new life for yourself, without being limited by your job or responsibilities to others.” Turn your paycheck “into a playcheck,” the book tells us – that’s the difference when you have financial independence. See purpose in life over money.

“In Victory Lap Retirement the goal is to achieve a simpler, more balanced lifestyle… look for work that combines personal meaning and social purpose,” the authors note.

They see two good approaches to leaving the full-time world of work. The Glidepath Strategy is for those “who like what they do, but just want to do less of it.” By working part time or casually you may be able to continue on into your seventies and eighties, the book suggests.

The other route to go is the Passion/Hobby Strategy, for those who want “to venture outside their comfort zone and take a swing for the fences.” Moving from data analytics to making custom furniture, teaching to captaining a fishing boat, or from finance to selling wine are examples, the book explains.

Save with SPP (unsurprisingly) was interested in the chapters on saving, and the book does not disappoint. Funding the Victory Lap Retirement starts with saving enough “to replace upwards of 70 to 80 per cent of your current income,” and the book recommends a gradual transition to retirement “while continuing to generate some level of active (work) income.”

This active income can be a huge help if you are not fortunate enough to have a pension from work. “The active income you earn in Your Victory Lap can function much like a pension. Even if this income stream covers only 15 to 20 per cent of your overall spending, it is a separate source of income that… lessens your dependence on your other sources.”

Think as well about your “decumulation strategy,” turning your savings into income. The book says you should think about drawing down from non-registered savings before you crack into your registered money, and of delaying the start of Canada Pension Plan and Old Age Security benefits until age 70.

The book concludes by contrasting people who lived the life of their dreams to those who laboured for decades in jobs they didn’t like, adding that few people late in life say “I wish I’d made more money” or owned more things.

This is a great, and “outside the box” way to look at life after work, one that would make a great addition to anyone’s library.

Living your dreams after work is done is a terrific goal. If you don’t have a workplace pension plan, you’ll need to rely on your own savings to fund that future. One option could be the Saskatchewan Pension Plan. You can contribute in many ways – online, through automatic deposit, and even by credit card – and the cash you contribute is carefully invested for the future. There’s even an option for employers to offer the Plan as employee benefit.  When it’s time to do new things, SPP can turn those savings into income that lasts as long as you do. Why not check out SPP today?

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Book helps you be the author of your own retirement bucket list

October 29, 2020

While there’s no doubt that Sarah Billington’s The Ultimate Retirement Bucket List is well-written, it has a feature that few other books on the topic have. With this book, you are essentially a co-author, and it’s you who fleshes out the details on your own retirement bucket list.

Billington starts by noting that while retirement does indeed mean you are getting older, “don’t let it hold you back. Age is just a number if you take care of your body and mind.”

Then the co-authoring begins – a little questionnaire asks about your passions, your skills, and new things you’d like to learn. It asks you what you’d like to do more, and importantly, what you’d like to do less.

The Fun and Leisure chapter asks you to list books you’d like to read, movies and TV shows you want to “see or binge-watch,” recipes to cook and new pursuits to try.

The Travel Adventures Near and Far section sets out local attractions you’d like to see, restaurants you’d like to dine at, festivals and events to attend, and day trips to take.

The Common Deathbed Regrets chapter asks you to list any “relationships to repair,” and people you’ve lost touch with, folks you should visit and birthday cards you should send. We liked the advice in the Relationships chapter to jot down people “to spend more time with” and “people to spend less time with.”

On that latter group, Billington notes that “if there are people you find drain you, or bring you down, or take up too much of your time or emotional space, write their names down here. Silently thank them for the memories you shared together, wish them well, and mentally let them go to make room for those who fulfill you.” A wise sentiment, that.

Other chapters cover Healthy Habits – those to change, and those to adopt. There’s advice on Mental Health including the need to let regrets go and practice mindfulness. There’s a chapter on Creating Purpose.

At the end of this interactive book you will have created a handy list of all the things you want to do, plus a few you don’t want to do. It’s a reference manual – rather than thinking up new things to do with all the extra time you’ll have, you capture the ideas once and then can add/review/amend them going forward.

At the end, writes Billington, you have a bucket list “for a healthy and strong, adventurous, mind-expanding, fulfilling, playful, meditative, and meaningful retirement to help you expand your comfort zone so you can focus on and live the life you truly desire for the decades to come. Your retirement years are going to be your best ones yet.”

Those best years, of course, will be even better if you’ve saved for retirement along the way. If you don’t have a pension plan at work (or you do, but want to build additional savings) the Saskatchewan Pension Plan (SPP) may be just the ticket. It’s your personal retirement system – you contribute some cash during your working years, that money is invested and grown on your behalf, and at retirement, SPP provides you with options on how to turn the invested savings into a lifetime income stream. Why not check out SPP today?

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.