Book Reviews

Book urges prevention – not magical alchemy – as the way to age well and with dignity

September 23, 2021

Andrew Weil’s Healthy Aging is a well-written, fact-laden look at our society’s fascination with the quest for living longer – even forever – and sets out some steps we can take now to live long and healthier lives.

Dr. Weil points out that humans are the longest-lived mammals, and that research has found that our cells can divide up to 50 times in order to replace themselves. He contrasts that with mice, whose cells can divide 15 times and live only three years, and the Galapagos tortoise, which can live to a whopping age 175 and has cells that can divide 110 times.

Historically, he writes, we are now at our longest-lived as a species. “There is no scientific evidence for greater longevity in any past age,” he notes. However, people have searched for a fountain of youth for many centuries, including Ponce de Leon, who searched for the island of Bimini and its magical spring of youth and Shangri-La, where legends suggest that monks who “plunged forthwith into rigorous self-discipline somewhat curiously combined with narcotic indulgence” claimed to be able to live for several centuries.

The biology of aging has led to research into anti-aging medicine and treatments, which Dr. Weil explores. He concludes that we “will never be able to reverse the aging process… so please forget about anti-aging and avoid obsession with life extension. Instead, let’s focus on preventing or minimizing the impact of age-related disease, on separating longevity and senescence, on learning how to live long and well, on how to age gracefully.”

The second part of the book goes into great detail on steps you can take to do just that. “In our society, and in developed countries generally, blood pressure increases with age, perhaps because of our dietary habits, the stress of modern life, and other unknown factors,” he writes.

Those with high blood pressure should “first try lifestyle measures to normalize it: losing weight, increasing exercise, practicing relaxation techniques… eating fewer foods high in sodium and more vegetables.” If the problem persists, get a doctor’s input and start on “anti-hypertensive medication.”

As we age, we should watch our cholesterol levels as well, he writes. Other advice: keep a medical diary of “past illnesses, injuries, treatments, hospitalizations, current medications, and family history.” Keep current with your immunizations. Get a physical every couple of years. Get screened for cancer and keep your blood pressure as close as possible to normal.

As well – don’t smoke, watch your weight, and watch for unhealthy fats in your diet.

On the eating side, be aware of the glycemic index; “reduce consumption of high-GL (glycemic load) foods… that means less bread, white potatoes, crackers, chips and other snack foods, pastries, and sweetened drinks and more whole grains, beans, sweet potatoes, winter squashes and other vegetables,” he writes. Eat less refined and processed food, fast food, products “made with flour of any kind” and products made with “high fructose corn syrup.”

Generally, he adds, you should eat less meat and poultry and “other foods of animal original,” and more vegetable protein.

Other tips – “white, green and oolong tea” is a good antioxidant, and you can have up to four cups a day. He likes the idea of people taking a daily multivitamin.

Exercise is good but as you age, should be body-friendly, he notes – walking, swimming, cycling, exercise machines and strength training are easy on the joints.

To relax, he suggests “breathwork” as “the simplest, most efficient way of taking advantage of the mind-body connection to affect both physical and mental health.” He concludes with a chapter on the importance of sleep.

He also considers what will happen if the trend towards more longevity in society continues – will we see a demographic change to an older population, with the need for more care for the aged? And, he asks, “what happens to retirement when Americans are no longer saving and are both retiring earlier (the average age is now 63) and living longer?”

It’s hard to do justice to this detailed and well-thought-out overview of the issue of aging well; it’s definitely worth getting a copy of this fine volume and adding it to your retirement library.

Longevity is an interesting topic. On the retirement planning front, longevity is sometimes referred to as a “risk.” It’s thought of that way because there can be a problem when people outlive their retirement savings. The Saskatchewan Pension Plan has an antidote for longevity risk. When you decide to collect your SPP retirement benefits, you can choose among several annuity options. An annuity provides you with a lifetime, monthly income that continues for as long as you live – even if you watch your weight, eat well, exercise and relax your way to 100 and beyond! Celebrating 35 years of delivering retirement security, 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.


McCloud’s Saving Money is jam-packed with thrifty tips

September 2, 2021

Ace McCloud’s Saving Money is a slim volume that’s absolutely jam-packed with good advice on saving money.

McCloud begins by stressing the importance of “investing in yourself,” specifically the need to look after your physical and mental health. Good health practices are essential to “living a longer, happier life.” So, eat well, visit the gym, get lots of sleep and check in with your doctor, we are told.

For mental health, McCloud says yoga and meditation are good bets.

On the money side, McCloud points out the advantages of having a savings account. “First and foremost, your chances of spending that money are much less (in a savings account) than if your money was in a chequing account,” McCloud notes. It’s a good start, but with interest rates currently quite low, other investments – property, stocks, bonds – may provide greater profits.

On the stock front, McCloud says investing in preferred stock “is best for those who don’t get excited by risk taking because the price of the stock doesn’t tend to fluctuate.” You’ll get better interest via bonds than a savings account, and if actually buying a property to rent out is beyond your means, a Real Estate Investment Trust (REIT) can get you into the real estate game with a much smaller entry fee, he notes.

Many of us don’t have money to save due to high levels of debt, writes McCloud. “Many people find themselves in bad credit card debt because credit cards easily bring on feelings of instant gratification,” he explains. So while saving is a great thing, he advises getting rid of “high interest debts as fast as you can” to free up more money to save.

He gives an example indicating that if you make only the minimum payment on a $10,000 credit card balance, “it would take you nearly 30 years to pay it and it would cost you $12,000 just in interest!” By paying just under twice the minimum payment, you can pay it off in two years and save $10,000 in interest. If you have a number of credit cards, the Snowball Method may be a good idea – put extra money on the card with the lowest balance until you pay it off, and then add that money to the next-lowest card, McCloud explains.

Obviously debt is just one factor that restricts savings. The other is overspending. McCloud offers dozens of great ideas on how to save money. Go to the library, he suggests. Put down your electronics and take a walk. Don’t go to malls without spending money. Clip coupons. Shop at thrift stores. Make dining out (or ordering in) for special occasions only.

A nice bit of advice is to “take care of your personal possessions… you can make them last longer, therefore getting more value out of your money.” This advice extends to toys, cars, your house… the whole shebang.

We also like the idea of saving change in a jar.

There’s a handy section on grocery shopping that contains advice like “don’t fill your cart,” buy generic and private label brands, avoid pre-packaged food, and the classic “don’t shop when you’re hungry.”

While the book is intended for a U.S. audience, many of the tax saving tips are relevant for us Canadians. Make charitable donations to get a tax deduction, he writes. If you are moving, keep receipts – you can often claim the expense if you are moving somewhere to get a new job. The cost of having someone prepare your taxes is tax deductible, as are a variety of home office costs if you are self-employed.

He concludes by recommending a family stick to a budget to avoid surprises. This is a fun and straightforward little book that can jump-start your thinking if you are finding that there’s less money left over on payday than there used to be. It’s well worth reading.

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.


Navigating the complexity of the golden years: The Boomers Retire

August 26, 2021

The concept of retirement “has grown increasingly more sophisticated,” begin authors Alexandra Macqueen and David Field in their new book, The Boomers Retire.

“Canadians preparing for retirement,” they write, “have been able to contemplate a variety of highly personalized approaches – from early (or even very early) retirement, to phased retirement, working retirement, and more.”

This thorough book covers all matters retirement and boomer with clear, concise explanations, tables, charts, and focus.

Early, we learn about three “realities” in today’s retirement world – the amount of time we are retired is “increasingly longer,” that retirement is much more diffuse than the old “retire at 65” days of the past, and that funding retirements that may last longer than one’s working years is “increasingly complex.”

Workplace pensions aren’t as common as they were in the past, especially in the private sector, so many of us have to rely on government benefits, the authors explain. But Canada Pension Plan and Quebec Pension Plan maximum benefits are just over $1,200 a month, and worse, the “average benefit amount for new recipients is $710.41 per month, or about 60 per cent of the maximum.”

Old Age Security provides another $7,384.44 annually, but is subject to clawbacks, the authors observe. Lower-income retirees may qualify for the Guaranteed Income Supplement, we are told.

Those without a workplace pension plan (typically either defined benefit or defined contribution) will have to save on their own.

In explaining the difference between two common do-it-yourself retirement savings vehicles, the Tax Free Savings Account (TFSA) and the registered retirement savings vehicle (RRSP), the authors call the TFSA “a nearly perfect retirement savings and retirement income tool” since growth within it is free of tax, as are withdrawals. They recommend a strategy, upon withdrawing funds from an RRSP or registered retirement income fund (RRIF) of “withdrawing more than needed… and instead of spending that extra income, move it over to the TFSA.”

Our late father-in-law employed this strategy when decumulating from his RRIF, chortling with pleasure about the fact that he received “tax-free income” from his TFSA.

The book answers key timing questions, such as when to open a RRIF. Planners, the authors write, used to advise waiting “until the last possible moment” to move funds from an RRSP to a RRIF, at age 71. “The problem with this approach,” they tell us, “is that it sometimes results in low taxable income between retirement and age 71.” If you are in that situation, be aware that you don’t have to wait until 71, and can RRIF your RRSP earlier, they note.

A section on annuities – a plan feature for SPP members – indicates that they address the concern of running out of money in retirement, as annuities are generally paid for life. The trade-off, of course, is that you don’t have access to the funds used to provide the annuity.

Other retirement options, like continuing to work, taking a reverse mortgage, and starting your own business, are addressed. There’s a nice section on investing that looks at the pros (security) and cons (low interest rates) of bonds, how to treat dividend income, index exchange-traded funds, and more.

An overall message for this book, which is intended for both planners and individuals, is a focus on having an individualized strategy, rather than relying on various “rules of thumb.”

“Aiming for a smooth, even withdrawal over a retiree’s lifetime will often be the optimal approach,” the authors say. That’s complicated if, as our friend Sheryl Smolkin told us recently, your retirement income “river” comprises many different registered and non-registered streams. The authors say that a withdrawal rate of four per cent from your various retirement income sources is generally a good target.

Tax tips include remembering to claim medical expenses – many of us forget this category and miss out on tax savings – claiming the disability amount if you qualify, and taking advantage of income splitting. There’s a chapter on being a snowbird (there can be some unexpected downsides with it) and going the rental route in your latter years, when “the future is now.”

This clear, detailed, and very helpful book is a must for your retirement library.

If you’re a member of the Saskatchewan Pension Plan, you’ll have the option at retirement to choose from a variety of great annuity products. Some offer survivor benefits, including the Joint & Survivor option where your surviving spouse will continue to receive some (or all) of your pension after you are gone. It’s a solid part of the SPP’s mandate of delivering retirement security, which it has done 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.


The Dirt Cheap Green Thumb – great tips for stretching your gardening dollars

August 5, 2021

We frequently write about ways to save money for retirement. But when you finally get over that wall between work and non-work, things change – the concern becomes saving money in retirement.

That’s why The Dirt Cheap Green Thumb, by Rhonda Massingham Hart, is ideally suited for those of us who did NOT garden for a living prior to becoming retired. This well-organized little volume covers off a ton of valuable time and money-saving tips.

Hart starts by explaining that since no two lawns are alike, it’s important to know the “microclimate” of your own yard. Find out things like average rainfall, first and last frost dates, and even the pH balance of your soil (one way to figure this out is by checking the leaves of your tomato plants – who knew). The book explains how to test the soil drainage of your yard, as well.

Knowing these details makes it far easier to plan what, and where, to grow, the book explains. There are lists of plants that like sun, plants that are hardy in cold weather, and even plants that “can tolerate less than ideal growing conditions,” such as polluted urban settings.

For those who can’t master the existing yard conditions, Hart suggests growing in containers, and gives the ideal soil, peat moss, sand and compost ingredients.

There’s advice on using “do it yourself” plant growth boosting – such as adding “a tablespoon of Epsom salts… in the planting hole of tomato and pepper” plants.

For those of us living in drought-prone areas, using a “soaker hose” may be a far cheaper way, water-wise, to irrigate the roots of your lawn and garden than a conventional sprinkler. “Using a lawn sprinkler or an overhead watering system on hot, windy days wastes a lot of water,” notes Hart. Ah. Now we see. She points out how a rain barrel can shave down the water bill while providing a free water supply for gardening.

She goes over a handy list of ideal “people-powered tools” for the garden – a fork, a spade, a shovel, hoes, and rakes. Get decent tools, she advises. “Cheap tools will cost you, in either repairs or replacement costs. Well-made tools last longer and require fewer repairs.”

She talks about how you can make your own mulch from old branches lying around the yard via a chipper. Again, this is turning yard waste into yard upgrades!

Other topics covered – what to look for when buying plants on sale, the most “cost effective herbs” to grow, tips on the correct way to mow the lawn, “edible ornamentals,” how to make a low-cost greenhouse for cold-weather gardening, and how best to prepare the produce you grow at home for the freezer.

This is a perfect book for a novice or johnny/jane come lately gardener who didn’t learn any of these tips at mom or dad’s knee. It’s very accessible, it’s very clear, there are helpful illustrations, and the overall tone of the book is very encouraging – you can do this! Recommended for any new retiree who has always wanted to take up gardening, or a pre-retiree keen on saving on lawn and garden costs.

Saving is pretty much always a good thing. The Saskatchewan Pension Plan has been helping people save for retirement for more than 35 years. If you don’t have a pension at work, and aren’t interested in finding out about the investment climate and best conditions for growing your income, check out SPP and leave the financial planting and harvesting to them!

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.


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.