Category Archives: Book Reviews

Thinking your way to wealth: Napoleon Hill

What if all that is keeping you from being rich is the way you think? Could you change your thinking and realize your dreams?

According to Napoleon Hill, author of Think & Grow Rich, the answer is yes. This interesting and somewhat classic book (the copyright date is 1937, and it was first reprinted 60 years ago) starts by telling the tale of Edwin Barnes, a man who despite lacking any skills or knowledge, desperately wanted to work alongside the great inventor, Thomas Edison.

The penniless Barnes managed to get a meeting with Edison, who noted that “there was something in the expression of his face which conveyed that he was determined to get what he had come after.” He hired Barnes, the book says, and later, it was Barnes who spotted the potential in a dictaphone device Edison had invented, was given the job of selling it, and made a fortune with the product. “He proved that one may Think and Grow Rich,” Hill writes.

Hill outlines six steps to take to turn “desires into gold.”

You should “fix in your mind the exact amount of money you desire.” Next, determine “what you intend to give in return for the money you desire.” Set a date for when you plan to possess the money, create “a definite plan for carrying out your desire,” develop a written statement of your plan and “read your written statement aloud, twice daily,” ideally when you get up and again when going to sleep.

While this sounds simple enough, the book looks at all the obstacles that get in the way of such positive, structured thinking.

To build your self-confidence (towards attaining your goal), Hill recommends that you “demand of (yourself) persistent, continuous action towards its attainment.” You need to set aside at least 30 minutes daily to take action on your plans. In this way, which Hill calls “auto-suggestion,” you basically coach your thinking into focusing on achieving your goal.

You need to fend off the “31 major causes of failure,” all of which can be overcome, Hill notes.

Among these are “lack of a well-defined purpose in life,” a lack of ambition, a lack of self-discipline, poor health, procrastination, the lack of persistence, and many more.

He lists the six “basic fears” that prevent people from trying to reach their goals – fears of poverty, criticism, ill health, failure in love, old age and death. “Fears are nothing more that states of mind,” he writes. “One’s state of mind is subject to control and direction. Man can create nothing that he does not first conceive in the impulse of thought.”

Another tactic is to make sure, Hill writes, that you are “money conscious” and not “poverty conscious.” The former, he argues, can be created – or you can be born with it, it is having a mindset that is focused on attracting wealth. The latter will fill the void if you don’t have a developed money consciousness, he notes.

This is a fascinating book, and while it’s a vintage example of self-help writing, it stands up quite well. The central message here is that if you set a goal – any goal – you can achieve it by committing yourself to focusing on it, banishing negative fears and obstacles, and following your own thorough plan.

You could apply these principles not only to amassing wealth, but maybe for things like losing weight or breaking 90 at golf. Controlling your mind will conquer fears, distractions, and inaction.

Thinking in the way that Hill does, then, you could plan for a specific total in your retirement savings account – let’s say $100,000, as an example – and then write out the steps you would take to get to that target. It’s adding structure and purpose to the activity of saving.

Should you be looking for a destination for your retirement savings, the Saskatchewan Pension Plan  may be a good place to check out. They’ll professionally manage your savings, and when the blessed day comes that you punch the time clock for the last time, they’ll turn your savings into lifetime income. 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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Book puts the wisdom of Buffett at your fingertips

We often run in to various thoughts and pronouncements by the Oracle of Omaha, Warren Buffett, when reading the papers, watching the news, or even scrolling through social media. The man, after all, is a financial genius and one of the richest people in the world.

A nice book by Robert L. Bloch, My Warren Buffett Bible, catalogues some of the great man’s thinking in a well-organized, easy-to-access way.  There are literally hundreds of bits of good advice tucked away in this book that will help even the most novice of investors.

“Rule number one,” Buffett is quoted as saying, is “never lose money. Rule number two – don’t forget rule number one.”

He suggests that investors “buy companies with strong histories of profitability and with a dominant business franchise.” In other words, leading companies that are making profits.

“When I buy a stock, I think of it in terms of buying a whole company, just as if I was buying the store down the street. If I were buying the store, I’d want to know all about it.” The same holds true, Buffett says, when buying shares in a well-known company.

As well, Buffett states, “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” He also notes that “startups are not our game;” his company, Berkshire Hathaway, tends to buy companies that have been around for a long time. Its oldest holdings, the book reports, are American Express, Wells Fargo, Procter & Gamble and Coca-Cola, all firms that are over a century old.

And he says he plans to increase his holdings in these types of companies. “Too much of a good thing can be wonderful,” he states in the book. “The definition of a great company is one that will be great for 25 or 30 years.”

He’s not one for making a lot of portfolio changes, either. “Inactivity strikes us as intelligent behaviour,” he notes, adding that “what the wise do in the beginning, fools do in the end.”

He is not, the book states, a big fan of bond investing. “Overwhelmingly, for people that can invest over time, equities are the best place to put their money. Bonds might be the worst place to put their money. They are paying very, very little, and they’re denominated in a currency that will decline in value.”

For those who don’t want to pick stocks, he recommends index funds (such as index ETFs). “If you invested in a very low-cost index fund – where you don’t put the money in at one time, but average in over 10 years – you’ll do better than 90 per cent of people who start investing at the same time,” he states in the book.

And for those who may think money is everything, the book closes with this quote from Buffett – “money to some extent sometimes lets you be in more interesting environments. But it can’t change how many people love you or how healthy you are,” he states in the book.

This is a fine little book that is fun and quick to read.  If you are running into problems running your own investments for retirement, it’s never a bad idea to get some help. The Saskatchewan Pension Plan will grow your savings for you, using expert investment advice at a very affordable rate. When it’s time to turn those savings into retirement income, SPP has an array of annuity options to provide you with steady lifetime income. You can transfer up to $10,000 each year from your existing RRSP to SPP; 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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Pat Foran’s book offers a wide-ranging look at ways Canadians can save

There’s a lot of meat in Pat Foran’s book The Smart Canadian’s Guide to Saving Money.

The CTV “On Your Side” reporter covers a lot of ground. He starts by asking the rich and the famous about their personal money tips. The late Alberta premier, Ralph Klein, states “never spend what you do not have. It is far better… to put off a purchase for three months until you can afford it than to spend the next six months paying it off.” Don’t, Klein notes in the book, “line the pockets of your bank… line your own!”

Noted financial author David Chilton tells Foran that “as corny as it sounds, what people have to do is stop caring so much about stuff.” He adds that as he gets older “the more I realize that good financial planning is less about the intricate knowledge of the stock market and forecasting future interest rates, and more and more about discipline and not wanting so much stuff.”

And Ben Franklin once said “the borrower is a slave to the lender… be industrious and free; be frugal and free.”

But how to get there?

Foran’s book covers all the bases. Everyone, he writes, needs to track their expenses. “The most important thing you can do is monitor the amount of money that is flowing in and out of your life every month,” he notes, providing a sample worksheet to get you started.

After looking at the importance of having a spouse who is your financial partner, he talks about tackling debt. Consolidation loans aren’t always the best approach, he warns. “Consolidating various high interest rate balances into one easy-to-handle payment is often just a quick fix to roll your `junk debt’ into a bigger pile,” he notes. He defines `junk debt’ as debt “that has been rolled around so many times you can’t remember what you originally went into debt to buy in the first place.”

So, he suggests, cut back on “bad spending habits,” such as smoking and excessive drinking. A case of beer a week costs you $1,872 each year, he writes. Even $4 a day spent at Timmy’s can add up to $1,460 per year, Foran writes. Other “money wasters” that make his list are dining out often, expensive clothes and jewellery, premium gas, dry cleaning clothes you could wash yourself, buying a brand-new car, flying first class, and so on. With all such expenses, he suggests, one should first ask “can I afford it.” If not, perhaps there are cheaper ways to go, he notes.

Credit cards, write Foran, need to be paid off and cancelled. “Once you have paid off a credit card, you must let it rest in peace! You have to call your credit card company and say… please cancel my credit card.”

After mastering debt, you need to look at saving, and the power it has. If you were to save $20 a week for 50 years, you’d have $1.4 million in your pocket. “Imagine saving your own jackpot…. Even a small amount, just $20 a week, can become a fortune over time,” he explains.

Other good advice in this book – those saving via mutual funds or other investment vehicles need to take note of the fees charged. A $10,000 investment in a mutual fund with a high “management expense ratio” of 3.1 per cent would cost you $1,029 over three years – three times more than a similar fund with a one per cent fee, he notes. “That’s a huge difference,” Foran warns.

If you are saving in an RRSP or similar vehicle, Foran suggests you should “reinvest your tax refund, which most of us don’t.” RRSPs and debt reduction are both part of a “well balanced retirement plan,” he writes.

This is a great, easy-to-understand book that covers so many bases we don’t have room to explore them all here.

If, like Pat Foran suggests, you are looking for a low-fee retirement savings vehicle, be sure to check out the Saskatchewan Pension Plan. SPP will grow your money and the fee is typically only 100 basis points, or about one per cent. 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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

The Wealthy Barber Returns, bearing some easy-to-follow advice

When David Chilton came out with The Wealthy Barber decades ago, it was remarkable in that was a financial self-help book that was fun to read and easy to understand.

His follow-up book, The Wealthy Barber Returns, does not disappoint. It’s friendly, clear, and helpful, and is not mired in overcomplicated examples, tables, and worksheets. It feels more like you are benefitting from the experience of a good friend who’s bested some of the financial headwinds that have you mired down.

He begins with the “painful truth” that unless you come from money or marry into it, “you’ll have to learn to spend less than you make,” a message that “clearly hasn’t sunk in with the majority of Canadians.” Because of that, he continues, “a disturbing number of us aren’t saving enough to fund our future goals, most notably, a reasonable retirement.”

People, Chilton writes, think saving “requires sacrifices today” that somehow lessen life. “Surprisingly, it’s quite the opposite! People who live within their means tend to be happier and less stressed,” he notes.

One way to spend less is to avoid going to places where you like to spend money, or to leave credit cards at home. “Giving into temptation is only a mindless swipe away,” he warns. Currency users look in their wallets and see “a finite amount of cash – the ultimate forced discipline.” Those with credit and debit cards carry “virtually unlimited funds,” which may explain why average Canucks have $15,000 to $25,000 in credit card debt, Chilton writes.

“Credit cards allow us to act wealthier than we are, and acting wealthy now makes it tough to be wealthy later,” Chilton points out.

Another way to ramp in spending is to learn the phrase “I can’t afford it,” he notes. He cites the example of home renovations, which almost always go overboard. “More than half of the people I know who are in trouble with their lines of credit… arrived there via excessive home-renovation expenses,” he observes. If you are going all out on the house with borrowed money while neglecting your RRSP or your kids’ education, Chilton warns, “yeah, that’s an issue.” Instead of paying for heated marble floors, buy slippers, he adds.

Lines of credit “are helpful, yet insidious…. when drawing from your line of credit, always remember this incredibly basic but ultra-important fact. It’s not your money, it’s the bank’s,” he writes. Be careful at the bank with credit lines, because if you ask for a $30,000 line you may get approved for much more. “Just say no,” he writes. “You are your own credit-control board.”

You don’t want to take debt into retirement, Chilton states. “It drains cash flow, creates worry, and is subject to interest rate risks that will most assuredly follow Murphy’s Law,” he adds. He’s also leery about reverse mortgages.

In a chapter on retirement, Chilton says that most experts recommend that you put 10 to 15 per cent of your gross income away for retirement. “Don’t despair, though,” he writes. “A relatively small cutback in your spending rate can dramatically increase your savings rate.”

He concludes by reminding readers to “pay yourself first” by directing a set portion of your earnings to savings. The Wealthy Barber Returns is a great read, an insightful overview, and is non-threatening. You won’t feel like you’re a financial failure after you read it, but you will learn to recognize (and correct) your own bad habits.

If you are thinking of paying your future self first, why not set up an account with the Saskatchewan Pension Plan? The amounts you contribute will be carefully invested, will grow, and will be harvested in the form of a future lifetime pension. It’s an option worth checking out!

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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Book offers inspiring tune-up for mind and attitude re retirement

Many books about retirement focus on finances, others on health, wellness, and attitude. But Eric Thurman’s Thrive in Retirement provides a holistic owner’s manual to help get your mind, your soul and your attitude on the right path.

“Retirement,” he writes, “is no longer a short pause between work and the grave. It is now a long, major stage of life, because never before in human history have so many people lived decades beyond their working years.”

He looks at the five vital parts of life, which are “mind, body, relationships, soul, and finances.” The book uses these five things as a sort of lens through which to view your retirement activities and progress.

He also notes that the “three secrets of happiness” are “purpose, pleasure, and peace.” These ideas should also guide you, Thurman recommends.

Having a purpose in life, he notes, citing research from the English Longitudinal Study of Aging, “is associated with increased survival.” The study found that 29.3 per cent of people “in the lowest wellbeing quartile” died within 8.5 years (of retirement);” that compares to just 9.3 per cent in the highest wellbeing quartile. Thurman calls this “compellingly good news,” noting that “you can be happier and live longer if you wake up each morning enthused about the importance of how you will spend your day.”

He expands on this idea. “Recall the five parts of your life: mind, body, relationship, soul and finances. Don’t settle for any of them being deficient or, worse yet, sources of pain. Pursue emotional freedom.”

Your mind will thrive if you “free it from emotional pain” by letting go of minor things that bother you; you then need to keep it active through learning, through hobbies and activities, and even through part-time work, the book notes.

For one’s body, consider where you are on this scale – at the topic is “physically elite,” followed by “physically fit, physically independent, physically frail and physically dependent.” You need to try and be as high up on that scale as you can. He quotes the Quebec marathon runner Jacqueline Gareau as saying strategy must be employed in fitness – “it is not age, it is not diet. It is the will to succeed.”

In the chapter “Make Peace with Money,” Thurman advises us to “clarify our dreams” about money and importantly, to “control your money or it will control you.” He writes that we should “always view money as something you should put to good use and treat with respect. Never love the money and possessions you have. Never love money you don’t have. Never let money own you.”

Debt, he notes, should be treated “like a disease.” Avoid catching it, but if you do, “work to get over it as quickly as possible.” Overspending, he writes, “is always harmful” and credit card debt “ruinous.”

This well-written and motivational book ends with this bit of advice. “Think about how you want the story of your life to close. It won’t be a great ending if you drift passively, letting the river push you wherever it wishes. Instead, choose to steer towards happiness; do some paddling and raise your sail.”

It’s true that debt is the slayer of retirement dreams. One reason may be that paying off debt prevents people from saving for retirement, which in turn leads to less retirement income or a later retirement date. You can fight back by saving on your own for life after work; the earlier you start, the better it will be. And a great tool to use in that effort is the Saskatchewan Pension Plan.

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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Book helps map out a happy retirement

Retirement is a strange thing, in that you can’t really imagine what it is like until it happens – and when it does, you find it hard to believe you spent so long working.

But for many of us, leaving work and our colleagues behind might limit our social connections. What to do when work is in the rearview mirror? A great book, 101 Fun Things To Do in Retirement, has the answers.

Author Stella Rheingold begins by defining retirement as “entering a new, self-determined phase of life, leaving the employer or oversight of others to exercise greater choice and freedom in the use of one’s time.” In her view, that freedom is akin to “a lottery win.”

The book’s chapters then look in detail at various retirement pursuits, ranging from arts and crafts, the outdoors, sports, charitable work, and many more.  Some interesting hobbies in the “Head to Your Shed” chapter include blacksmithing and glassblowing, which “could be your passport to making some truly stunning artistic creations.” In “The Great Outdoors” chapter, she suggests picnicking – “if you are on a budget, but still want million-dollar views with your lunch, there is no better way than packing a picnic lunch.”

Under “Social,” a suggestion is to start or join a film club, ideal for “genre nuts” or those who love “films of a particular era.” Often such events can be hosted at a fun venue, such as a local pub, she writes.

The “Musical” category suggests learning to play an instrument, joining a choir, and later, checking out an “open mike” night. The “Educational” chapter talks of going back to school to further your education, or sitting in on university lectures, or joining a debating club.

Ideas for you to think about in the “Sporty” pages include lawn bowling, 10-pin or duckpin bowling, croquet and archery.

What’s great about this book is that Rheingold not only describes the various activities that are out there, but she gives you suggestions on how to reach out and join up. Trying out new things can be a bit daunting, but the warm, witty and wisdom-packed writing here makes it seem like getting going on all these great things will be worth the effort. As well, the activities are mainly, for the most part, quite affordable and thus, doable on most budgets.

Among her concluding thoughts is this gem – “life is short and may not have any meaning beyond the meaning we give it. The one thing we can do to truly honour life is to live it to the fullest for as many days as we are able.”

This is a great addition to any library.

Whatever you decide to do with your freedom after work, having a little income security will never be a bad thing. Consider opening a Saskatchewan Pension Plan account. Your contributions will be professionally invested over time, and at retirement, you’ll be able to choose from a wide variety of options that turn those savings into a lifetime income.

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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Retirement in Canada: Author Klassen likes concept of phased retirement

If you’re looking for a thoughtful, fact-filled and interesting guide to planning for your golden years, then Retirement in Canada by Thomas R. Klassen is a wise addition to your retirement reading collection.

Retirement, writes Klassen, is a complex issue both financially and demographically. He notes that the huge wave of retiring baby boomers is unprecedented. “Two-thirds of those 65 and over who have ever lived are alive today,” he writes.

For this huge group, he asks, will traditional definitions of retirement still work? “Retirement typically involves a substantial and sustained reduction in the amount of time spent in paid employment,” he explains. “Yet such a definition fails to include the many Canadians who spend decades in unpaid labour, such as working at home to care for children or other relatives.” What, he asks, does retirement look like for that group, “those who have not worked for money for an extended period of time?”

The old idea of retirement was ending employment at age 65 and never working again. However, Klassen notes, “it is relatively rare for retirement to mean the complete and irrevocable stoppage of work.” There is, he continues, “nothing magical about 65,” and Canada’s very first old-age pension program started at 70. Women, he writes, can still give birth after age 65 through in vitro, a 100-year-old completed a marathon in 2011, students graduate university in their 80s and 90s, and “workers in a range of occupations remain employed years, and in a few cases, decades past age 65.”

Canadians are now living longer. In the 1920s, life expectancy for Canadian men was 59 and for women, 61. These days, most Canadians will live to at least 85.

Will the burden of paying for all these retirees fall upon younger Canadians?

Klassen takes issue with the old-age dependency argument, the “impression of a future world in which a relatively few younger workers will have to support a multitude of retired people.” First, the retirees depend “on savings, such as pensions, accumulated during decades of employment,” rather than on younger workers. Second, such thinking assumes that everyone 15-64 “is employed – that is, they are workers – and that everyone 65 and over is retired and not employed. This is clearly not the case.”

In fact, he writes, older Canadians work past age 65 in ever-larger numbers, either because “they have no choice but to continue earning employment income,” or because “they live to work, rather than work to live.”

The idea behind mandatory retirement at 65 was “to press for adequate pensions from employers and for state programs for older citizens,” he writes. A related idea was to clear the decks for younger people to take the jobs vacated by retirees. When mandatory retirement was ended, Klassen notes, this thinking was revealed as “a fallacy,” based incorrectly on the assumption that the number of jobs in the economy is finite.

While government retirement income programs generally work well, the other main savings vehicles – RRSPs and workplace pensions – aren’t running at maximum efficiency. Klassen notes that only 39 per cent of workers had access to a workplace pension plan in 2010, and that only 25 per cent of those eligible for a private pension joined.

An issue, he suggests, might be affordability. Families in their 30s have significantly less wealth than those in their 60s, who are living in mortgage-free homes and are experiencing their highest levels of income.

So, given all this, will retirement be a good thing for most of us?

Klassen concludes by noting that “most Canadians can expect satisfaction with, and in, retirement after an initial period of adjustment.” He adds that “there is no magic transformation that occurs upon retirement,” so “those with higher levels of satisfaction with life before retirement will likely continue to be fortunate and fulfilled in retirement.”

If you are someone who has not joined a workplace pension plan, or don’t have access to one, the Saskatchewan Pension is well worth checking out. You can start small, and make contributions when you can, and then ramp it up as your income improves over time. It’s a flexible plan that is a sensible retirement savings ally.

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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

A new way of adding joy by tidying up – Marie Kondo

If you’ve ever looked around your home and noticed it is a debris field of clutter, then The Life-Changing Manga of Tidying Up by Marie Kondo is THE book for you.

The book provides a unique, step-by-step roadmap to making your home into the place of joy it should be, furnished only by the things that give you joy and fully de-cluttered.

Once you commit to her system, Kondo writes, “there’s no rebound… that’s the life-changing magic of tidying up.” The book, which is mainly a Manga cartoon, shows Kondo helping a young woman declutter her apartment.

The book recommends that you should start by “visualizing your ideal lifestyle,” even drawing a picture of how you want your home to look. Start, the book recommends, by discarding, which “really means choosing what to keep… keep only what sparks joy.”

A key tip is to never tidy up by place, but by category. Don’t go through your clothes in a closet, remove ALL your clothes from all closets, take them to a central spot, and sort them out into piles of keep (clothes you love and that spark joy) and to get rid of (those that don’t spark joy). Then, put them away in the empty closets and drawers.

There’s a chapter on how to save space by carefully folding your clothes – everything doesn’t need to be on a hanger, the book advises.   Books are treated in a similar way, although Kondo advises that once you have taken all books to a central sorting spot, you should clap your hands to wake the “dormant” books, so that when you sort them, you will be able to feel the joy sparked by the ones you want to keep.

With paper and miscellaneous (komono), you recycle things like newspapers and magazines first, and then use three categories for all paperwork – “needs attention, save (contractual), and save (other).” As Kondo says, “the rule of thumb for papers is to discard them all. Keep only those you will be certain you need in the future.”

Once all the tidying is done, the chapter on storage basically instructs the reader to “put things where they belong,” and to store everything by the same categories you used to tidy – clothing, books, paper and miscellaneous, and sentimental items.

Once you have succeeded, your home “is your joyful space,” and is “linked to your body.”

This book is a great read and a totally different way to look at how we deal with all of our possessions. We tend to keep things that don’t work, don’t fit, or that we think might be of value; the book urges liberation from this retentive state of mind and liberating the open space that’s in our homes.

From a saver’s perspective, there is always cash for getting rid of things with value that no longer give you joy, and money to be saved by staying where you are rather than moving to a bigger place with all your clutter. It’s a great read, a sort of spiritual view of aligning your environment with your inner happiness.

And if you are able to save a bit on housing or cash in some unwanted collectibles, a wonderful extra thing you can do is make a contribution to your Saskatchewan Pension Plan account. Tidying away some money today will bring joy in a future tomorrow!

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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Moderate saving and debt avoidance are keys to a good retirement: Vettese

In The Essential Retirement Guide, noted actuary and financial writer Frederick Vettese offers a different, and decidedly non-alarmist approach to funding one’s golden years.

The book challenges some of the accepted “truths” about retirement planning, such as the possibility we will all live past 100 and that we should save (via all sources) enough money to replace 70 per cent of our pre-retirement income.

On longevity, Vettese notes that “the average person has little better than a 50-50 chance of making it from age 50 to 70 without dying or incurring a critical illness.” The book provides some interesting advice on how to determine your own, more realistic life expectancy target.

As for the 70 per cent target, Vettese produces ample evidence showing many of us can have a well-funded retirement with a much lower target. The income replacement target, he writes, can be “as low as 35 per cent for a couple that spent a considerable amount on housing and child-raising through their working years. The target can nudge above 50 per cent for a middle-income couple who paid off their mortgage earlier and then started to spend much more on themselves during their last few years of employment.”

Why does he feel you need less? He cites research showing that spending drops more than 50 per cent on many items – airline fares, admission fees, alcohol, cigarettes, clothing – once we reach age 80. And while many of us assume we will at some point face expensive long-term care costs, Vettese writes that “the probability of requiring long-term care is about 50 per cent for women and 40 per cent for men,” and it is unlikely that such care will be required for more than five years.

Other advice from Vettese includes paying attention to investment management fees. “Unless the firm that is managing your monies (if you have one) can demonstrate that they consistently achieve higher returns than the benchmark indices, you should expect your own returns will just match the benchmarks, less whatever fees you are paying.” Exchange-traded-funds have very low fees of 0.25 per cent, versus fees of up to three per cent for “some high-cost equity mutual funds,” he warns.

Vettese likes annuities as part of a retirement plan. “Buying an annuity is usually a better bet than managing your own investment portfolio after retirement and drawing an income from it,” he writes. “You lose a little upside potential but you also eliminate some major risks.” He suggests that people with a portfolio of fixed income and equity assets consider converting the fixed income portion to an annuity, which provides them with a set amount of income monthly for as long as they live.

Access to a workplace pension is a plus for those that have it, he notes. “Participating in almost any workplace pension plan is a good thing,” he writes. Nearly every kind of workplace savings arrangement is a group product, which gives individuals access to low-fee investments, Vettese notes. That leaves more money for retirement income, he writes.

Vettese provides a nice six-point retirement strategy, as follows:

  • “Save 10 per cent of your pay each year.
  • Invest it in low-cost pooled funds, weighted towards equities.
  • Keep the asset mix the same, through good times and bad.
  • Apart from the mortgage on your home, avoid going into debt.
  • Pay off your mortgage by the time you retire.
  • Buy a life annuity at retirement.”

This is a good reference book for anyone wanting to fine-tune (or develop) a retirement plan and it has been written to work with both Canadian and American audiences, a somewhat rare feat.

The Saskatchewan Pension Plan provides some of the tools you may need for your retirement plan, such as low-cost, professional investing in a pooled fund, and the ability to convert some or all of your savings to an annuity at retirement. Check it 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. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22