Category Archives: Personal finance

New Canadian Leadership Congress helps pension leaders with “the challenge of change”

There’s a new organization out there aiming to help bring pension leaders up to speed on some emerging issues – societal, economic, and environmental – that are having new impacts on the way retirement savings programs are run.

Save with SPP spoke with Caroline Cakebread, founder of the new Canadian Leadership Congress, about what the new group hopes to achieve.

Cakebread, a veteran financial journalist who edited Canadian Investment Review for more than 15 years, says the Congress is designed to fill an information gap here in Canada. “We wanted to do something different, some things that haven’t been done much in Canada,” she explains. The group, she adds, will bring pension CEOs and CIOs together for “intimate conversations” about emerging issues, like geopolitical risks, the pros and cons of emerging markets, and environmental impacts on investing. The Congress’ focus is strategic, she explains.

Other key issues the Congress will be looking at with leaders include the growing role of technology, diversity and leadership, and the overall “very uncertain investment environment.”

The Congress held its first major session in Montreal early in June. The format, she says, features speakers, panels, “congressional huddles” and lots of opportunity for networking. A goal, she says, is to connect the pension leaders with experts in a format that encourages free and open discussion, and lots of talk around the table. A number of comments from participants and speakers were made available on Twitter, notes Cakebread. 

The educational outreach the Congress provides is a new approach, Cakebread says, and one that many pension leaders had privately told her is not currently available in Canada. As well, rather than targeting one type of pension organization, the Congress is “more available” to a wider range of plan types. While all of the plans represented are fairly large, some are defined benefit, some are defined contribution, some offer both types, and so on.

While there is a lot out there for pension leaders in terms of educational conferences, there is less for executives who are at a “deal maker” level when it comes to decision making, she says. She’s hoping that the new Congress will meet that need.

Cakebread says that during her time in the pension industry, the public’s interest has really begun to grow. “When I started out, as editor of a pension publication years ago, in the early 2000s, pensions were considered a dull topic,” she says. But now, as the boomer population ages and people begin to grasp the significance of pension income and retirement security, “pensions are cool,” she says with a smile.

If you’re interested in finding out what the Congress is up to, be sure to follow them on Twitter, the handle is @CLCongress. We thank Caroline Cakebread for taking the time to speak with us.

It’s true that pensions were a pretty dull topic in the early 2000s, but the growing retiree population in the intervening years has indeed make retirement security “cool.” The general decline in the number of workplaces offering plans means many of us will need to save on our own. If you’re in that number, a great resource is the Saskatchewan Pension Plan. 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

A look at the things we stop doing once retired

It’s very difficult for those of us who are retired to explain what it’s like to those still working. And it’s equally difficult for those still at the desk to visualize their time after work.  Save with SPP took a look around the Interweb to see what sort of things we don’t do once we are retired, hoping this listing might help demystify the intrigue that is retirement.

According to The Terrace blog, a thing you’ll stop doing and saying is that you’re too busy or have no time to do things. “The new retiree finally has the time to do the things that have been put off for years. This includes projects, such as cleaning out closets and other chores around the home, travel to visit family and friends, starting new leisure activities, hobbies and taking classes,” the blog notes.

The Disabled World blog lists a variety of things that most seniors will be no longer able to do, such as getting to the phone on time, reading small print, “watching bad news,” and significantly, opening packages “containing things we really want to get our hands on.” Things that were easy to do before, warns the blog, will eventually become more difficult, a factor to be aware of.

One great thing is that you can stop planning for retirement once it has happened, notes US News and World Report. You will have done all the things the article lists, such as reviewing your finances and sources of income, health and benefit coverage, and using up your last days of vacation. You won’t have to “take vacation” once retirement has begun.

The MoneySense blog notes, among other things, that you will stop not being able to see your spouse. “Sure, you love your spouse, but let’s do a little math here. Chances are, for most of your married life at least one of you has worked outside the home. Subtract sleep, travel time and other away time and you’ve seen your beloved for— at most — six hours a day,” the blog notes.

You’ll see your spouse twice as much once you retire, the blog adds, and that can cause “some couples to bicker.”

Other things Save with SPP has noted include not having to buy a commuter pass or pay for a workplace parking spot, not having to have `clothes for work,’ including a vast array of ties, dressy shoes, and suits, and not having to attend one or two meetings every day of the workweek. You’ll find you lose track of what day it is, don’t really experience a difference when it is the weekend or a holiday, and put off doing things until it is NOT the weekend so there’s better parking and less crowds.

And strangely you’ll probably find you are just as busy as you were before you retired, but it will be with different tasks and activities.

The transition to retirement is a tricky thing. Putting away a little more money for those golden years is always a good idea, because once you don’t get a paycheque you’ll be dependant on workplace pensions, government retirement benefits and your own savings. Why not perk up your personal savings through a Saskatchewan Pension Plan account? You can save at your own pace, watch your money get professionally invested at a very low fee, and then enjoy additional lifetime retirement income once you’ve left the punchclock behind. It’s win-win.

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

Even those with workplace retirement savings plan coverage still worry about retirement: Aon research

Recent research conducted for Aon has found that Canadian workers in capital accumulation plans (CAPs), such as defined contribution (DC ) pension plans or group RRSPs, while confident about these plans and their own finances, “find it hard to save for retirement and are worried about having enough money to retire.”

The global actuarial and HR firm’s report, Global DC and Financial Wellbeing Employee Survey, also found that “fewer than half” of those surveyed have a particular goal for retirement savings, and that “depending on other sources of income, many find their current plan contribution levels are inadequate to ensure their total income needs in retirement,” according to an Aon release.

Among the other findings of the report:

  • Of the 1,003 respondents, only 27 per cent saw their financial condition as poor
  • Almost half of those surveyed say outstanding debts are preventing them from saving for retirement
  • Two of five who are in employer-matching plans (where the employer matches the contributions made by the employee) are not taking full advantage of the match
  • Of those who expect to fully retire from work, two-thirds expect to do so by age 66; 30 per cent expect to keep working forever in some capacity.

Save with SPP reached out to one of the authors of the research, Rosalind Gilbert, Associate Partner in Aon’s Vancouver office, to get a little more detail on what she made of the key findings of the research. 

Do you have a sense of what people think adequate contributions would be – maybe a higher percentage of their earnings?

“I don’t believe most respondents actually know what is ‘adequate’ for them from a savings rate perspective.  The responses are more reflective of their fears that that they don’t have enough saved to provide themselves a secure retirement.  Some may be relating this to the results of an online modeller of some kind, or feedback from financial advisors.

“I also think that many employees don’t have a clear picture of the annual income they will be receiving from Canada Pension Plan/Old Age Security to carve that out from the income they need to produce through workplace savings.  Some of this comes back to not having a retirement plan in terms of what age they might retire and, separately, what age they might start their CPP and OAS (since both of those drive the level of those benefits quite significantly).”

Is debt, for things like mortgages and credit cards, restricting savings, in that after paying off debt there is no money left for retirement savings?

“We were surprised to see the number of individuals who cited credit card debt as a barrier to saving for retirement. Some of this is the servicing (interest) cost, which is directly related to the amount of debt (and which will increase materially if interest rates do start to rise, which many are predicting).

“I think that the cost of living, primarily the cost of housing and daycare, is currently quite high for many individuals (particularly in certain areas like Vancouver), and that, combined with very high levels of student loans, means younger employees are just not able to put any additional money away for retirement.  There is also a growing generation of employees who are managing child care and parent care at the same time which is further impeding retirement savings.”

We keep hearing that workplace pensions are not common, but it appears from your research that participation rates are high (when a plan is available).

“This survey only included employees who were participating in their employers’ workplace retirement savings program.  So you are correct that industry stats show that overall coverage of Canadian employees by workplace savings programs is low, but our survey showed that where workplace savings programs are available, participation rates are high.”

What could be done to improve retirement savings outcomes – you mention many don’t take advantage of retirement programs and matching; any other areas for improvement?

“In Canada, DC pension plans and other CAPs are not as mature as they are in other countries such as the UK and US.  That said, we are now seeing the first generation of Canadians retiring with a full career of DC (rather than DB) retirement savings.  Appropriately, there has been a definite swing towards focusing on decumulation (outcomes) versus accumulation in such CAPs.

“From service providers like the insurance companies that do recordkeeping for workplace CAPs, this includes enhanced tools supporting financial literacy and retirement and financial planning.  Also, many firms who provide consulting services to employers for their workplace plans encourage those employers to focus on educating members and encouraging them to use the available tools and resources.

“However, if members are required to transfer funds out of group employer programs into individual savings and income vehicles (with associated higher fees and no risk pooling) when they leave employment, they will see material erosion of their retirement savings. Variable benefit income arrangements (LIF and RRIF type plans) within registered DC plans are able to be provided in most jurisdictions in Canada, but there are still many DC plans which still do not offer these.

“It is more difficult to provide variable benefits when the base plan is a group RRSP or RRSP/deferred profit sharing plan (DPSP) combination, but the insurance company recordkeepers all offer group programs which members can transition into after retirement to facilitate variable lifetime benefits.  The most recent Federal Budget was really encouraging with its announcement of legislation to support the availability of Advanced Life Deferred Annuities (ALDAs) and Variable Pay Life Annuities (VPLAs) from certain types of capital accumulation plans.

“There is still more work to be done to implement these and to ensure that they are more broadly available and affordable, but it is a definite step in the right direction.  A key benefit of the VPLAs is the pooling of mortality risk while maintaining low fees and professionally managed investment options within a group plan.  The cost to an individual of paying retail fees and managing investments and their own longevity risk can have a crippling impact on that member’s ultimate retirement income.”

We thank Rosalind Gilbert for taking the time to connect with us.

If you don’t have access to a workplace pension plan, or do but want to contribute more towards your retirement, the Saskatchewan Pension Plan may be of interest. It’s a voluntary pension plan. You decide how much to contribute (up to $6,200 per year), and your contributions are then invested for your retirement. When it’s time to turn savings into income, SPP offers a variety of annuity options that can turn your savings into a lifetime income stream.

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

Is working longer good for your health?

There’s mounting evidence that shows Canadians have to work longer than they planned, due to the combination of high personal debt and low retirement savings.

Save with SPP took a look around to see if this “new normal” is a good or bad thing, health wise.

Interviewed in Forbes magazine, Heller Sahlgren, author of Work Longer, Live Healthier, sees working longer as a positive, health-wise.

His book makes the point that healthy people in their 60s should have no problem working, and that the work is good for them. “Continuing some form of paid work in old age is one way to ensure a healthier population,” he states in the article.

How is working healthy? The article notes that “studies have found that the mental demands of a job can be a force for staving off cognitive decline, an insight summarized by the catchphrase `use it or lose it.’”

An article in the New York Times makes a similar argument. “What is the benefit of work? Activation of the brain and activation of social networks may be critical,” states Nicole Maestas, associate professor of healthcare policy at Harvard, in a Times interview.

There is a potential downside to working later in life, reports the Money Ning blog. If you’re “not passionate” about your work, or “are working in a job that is physically demanding or extremely stressful,” the idea of keeping your job “may not be a pleasant one,” the blog states.

A paper by the Canadian Centre for Policy Alternatives, Working After Age 65: What is at Stake provides a great overview of this issue. One section deals with the health of older workers, and notes that “more than 50 per cent of retired workers over 65 have three or more chronic health conditions (such as high blood pressure, diabetes, or arthritis.”

As well, the paper notes, “one in four fully retired workers over 55 list poor health as their reason for retirement,” adding that “many older workers will have difficulty remaining in the workforce due to poor health, even if they are not financially ready to retire.”

To recap, then, working past 65 can be good for your mind – keeping it in gear, so to speak – and the social connections from work are helpful, preventing isolation. But these benefits assume your health is good, and that seems to be the delineator – older folks do tend to have more health issues than younger ones, and if your job wore you out emotionally and physically, keeping at it may not be a great idea. So you’ll need to weigh all these factors should you consider working for the longer term.

A hedge against becoming a long-serving worker is retirement savings. Those savings give you options, such as scaling back on the amount of time you put in at work, or even moving to something that’s more fun but pays less. Be sure to make retirement savings a priority, and consider the Saskatchewan Pension Plan as part of your savings toolkit. They offer an end-to-end retirement plan for you, investing your savings and turning it into a lifetime stream of 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

Is there benefit to retiring later?

Would people be better off if they worked a little longer, and collected their retirement benefits a little later?

A new study from the Canadian Institute of Actuaries (CIA) called Retire Later for Greater Benefits explores this idea, and proposes a number of changes, including moving the “target eligibility age” for the Canada Pension Plan and Quebec Pension Plan to 67 from 65, while moving the earliest age for receiving these benefits from 60 to 62. As well, the CIA’s research recommends that the latest date for starting these benefits move from 70 to 75.

Old Age Security (OAS) would see its target age move to 67 from 65. For registered pension plans (RPPs), the CIA similarly recommends moving the target retirement age to 67 from 65, and the latest retirement date to 75 from 71.

Why make such changes? An infographic from the CIA notes that we are living longer – a 65-year-old man in 2016 can expect to live for 19.9 years, while a woman can expect 22.5 more years of living. This is an approximately six-year improvement versus 1966.

So we are living longer, the study notes, but face challenges, such as “continuing low interest rates, rising retirement costs, the erosion of private pensions and labour force shortages.”

Save with SPP reached out to the CIA President John Dark via email to ask a few questions about these ideas.

Is, we asked, a goal of this proposal to save the government money on benefits? Dark says no, the aim “is not about lowering costs to the government. The programs as they are currently formulated are sustainable for at least 40 to 75 years, and we believe this proposal will have minimal if any implications on the government’s costs.

“We are suggesting using the current increments available in the CPP/QPP and OAS to increase the benefits at the later age.” On the idea of government savings, Dark notes that while CPP/QPP are paid for by employers and employees, OAS is paid directly through government revenue.

Our next question was about employment – if full government pension benefits begin later, could there be an impact on employment opportunities for younger people, as older folks work longer, say until age 75?

“We’re not recommending 75 as the normal retirement age,” explains Dark. “We are recommending that over a phase-in period of about 10 years we move from a system where people think of ‘normal’ retirement age as 65 to one where 67 (with higher benefits) is the norm.

“The lifting of the end limit from 71 to 75 is at the back end; there are currently those who continue to work past normal retirement and can continue to do so even later if they choose,” he explains. “Current legislation forces retirees to start taking money out of RRSPs and RPPs at age 71 – we think this should increase to 75 to support the increasing number of Canadians who are working longer.”

As for the idea of younger workers being blocked from employment opportunities, Dark says “if we had a very static workforce this might as you suggest cause a bit of blockage for new entrants, but as we say in the paper, Canada has the opposite problem.

“Many areas are having a difficult time finding workers,” he explains, adding that “in the very near future a great many baby boomers will begin to retire. We think allowing people who want to remain in the work force can help with that.

“It’s important to remember that if you have planned retirement at 65 this proposal won’t prevent you from doing that except that OAS wouldn’t be available until 67 instead of 65 (and we expect the government would explore other options for supporting vulnerable populations who need OAS-type support at earlier ages).” Dark explains.

Would starting benefits later mean a bigger lifetime benefit, and could it help with the finnicky problem of “decumulation,” where retirement savings are turned into an income stream?

“Under our proposal,” Dark explains, “people could work just a little longer and get higher benefits for life. By itself that doesn’t make decumulation any less tricky – but perhaps a little more secure.

“For many people in defined contribution (DC) plans who have no inflation protection, longevity guarantees, or investment performance guarantees from an employer, using your own funds earlier and leaving the start of CPP and OAS to as late as possible can help provide some of the best protection against inflation for at least part of your retirement income,” he adds. And, he notes, because you waited, you will get a bigger benefit than you would have got at 65.

Finally, we asked if having a longer runway to retirement age might help Canadians save more for their golden years.

“Clearly by having a longer period of work you have more opportunity to accumulate funds, and by providing more security of retirement income it will help as well,” Dark notes. “We also know that Canadians are already starting their careers later in life – getting established in their 30s rather than their 20s, for example – and need that longer runway anyway.

“Overall, to me the most important word in the report is `nudge.’ If we can get people to think about retirement sooner and get governments to act on a number of areas that we and others have outlined we hope to improve retirement security for Canadians. This is just the start of a journey that will have lots of chapters.”

We thank John Dark, as well as Sandra Caya, CIA’s Associate Director, Communications and Public Affairs, for taking the time to speak with Save with SPP. Some additional research of the CIA’s can be found on Global News Radio, BNN Bloomberg and the Globe and Mail.

Even if the runway towards retirement age is lengthened, it’s never too early to start saving for retirement. If you don’t have a workplace pension plan, or do but want to augment it, the Saskatchewan Pension Plan may be a vehicle whose tires you should consider kicking. It’s an open DC plan with a good track record of low-cost investment success, and many options at retirement for converting your savings to a lifetime income stream.

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

“Canadian dream” far more difficult to achieve for younger Canadians

“Canadian dream” far more difficult to achieve for younger Canadians 

For boomers, the “Canadian dream” more or less echoed the dream our parents had – education, work, a house, a family, maybe even a cottage, and then a well-deserved retirement.

Research (using 2015 data) shows there is a serious flaw in this narrative for our millennial children. According to research from the Organization for Economic Co-operation and Development (OECD), featured in a National Post article, millennials are “less likely to reach middle-income levels in their 20s than their baby boomer parents.”

Why aren’t our kids making it to the middle class?

The research suggests “the middle class is shrinking — squeezed by high housing and education costs, displaced by automation and lacking the skills most valued in the digital economy.” The middle class is defined, for a single person in Canada, as requiring an income level of 75 to 200 per cent of the national median income, the article reports. For single Canucks, that’s $29,000 to about $78,000, the story notes.

One of the unfortunate aspects of this so-called dream is that in order to advance upwards, you have to achieve each step of the ladder. Education costs have skyrocketed in the last few decades, forcing younger people to have to take out huge education loans. Wages from work, the article notes, aren’t keeping up with the real cost of living. According to the OECD research, “between 2008 and 2016 real median incomes grew by an average of just 0.3 per cent per year,” compared to 1.6 per cent annually in the mid-1990s to 2000s.

So the wages from work aren’t sufficient for housing, with middle-income earners having to spend “almost a third of their income on accommodation,” the report states. In the 1990s, that figure was more like 25 per cent.  That’s why our millennials struggle to get to the “getting a house” stage, and if they can afford to start a family, is there anything left over for that dream cottage and longish retirement?

According to the Seeking Alpha blog, the answer is probably no. “At 1.1%, the Canadian saving rate is today near all-time lows, while Canadian debt is at all-time highs,” the blog notes. There’s an obvious reason – wages haven’t kept up with the cost of housing, so the younger folks are straining just to cover the mortgage. There’s less left for saving.

Research by Richard Shillington has found that even boomers aren’t awash in savings as they approach retirement. His study found that 47 per cent of Canadians aged 55 to 64 have “no accrued pension benefits,” and that for this age group, the median level of retirement savings was a paltry $3,000.

There’s still time to turn this ship around. Policy makers should continue to look at ways to help new people enter the housing market, and perhaps old ideas like housing co-operatives – popular when high interest rates restricted people from owning homes – should be revisited. Ways to make education less costly would be a huge help. Improved government pension benefits are a help, but why not continue to develop new workplace pension plans – or continue to encourage private employers to join publicly-run plans? Any policy that helps Canadians move up that middle class ladder is worth exploring.

If you’re among the many Canadians lacking a pension plan at work, the Saskatchewan Pension Plan is designed with you in mind. You determine how much you want to save, and they do the rest, investing your money through your working years and arranging to pay you a monthly lifetime pension at the finish line. Even a small start can make a big difference down the road.

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

Cash back – is it really a great way to save money?

At one time, the world of credit was filled with all sorts of incentives to get you using the card – travel points, points for goods and services, and so on.  But lately, it seems that points are being joined and even overtaken by cash back credit cards and shopping sites. Save with SPP had a look around the Interweb to see what people think about this apparently popular trend.

The Centsai blog agrees that there “are plenty of financial benefits of cash back rewards cards,” but warns consumers to “make sure you don’t fall victim to traps that will wipe out those benefits.”

Cash back credit cards, the blog notes, usually “offer a base level of cash back – usually one to two per cent of all purchases.” (This blog is aimed at the US market, which is similar but not identical to Canada’s.) Some products will give you an even higher discount on pre-selected categories, such as dining out, the blog notes.

Money comes back to you either as a statement credit, or by some sort of direct payment or cheque, the blog reports.

So what’s wrong with getting some of your money back? The problem, Centsai notes, is that you have to spend quite a lot on your card to get significant cash rewards back. We are talking maybe $2 on every $100 spent. “People can easily go out-of-control with their spending by viewing each potential purchase as a rewards-earning opportunity not to be missed,” the blog explains.

As well, notes the blog, the true benefit of cash back accrues for those who pay their credit cards off in full each month. For that type of user, the blog says, cash back is win-win. Turning this idea around, those who max out their credit cards to get the cash back may find that the interest they owe is much more than the cash they got back.

If you do a lot of online shopping, Ebates might be worth a look, reports Yahoo! News. “Ebates receives a commission from retailers for sending shoppers their way,” the article notes. “The app features daily deals such as 14 per cent cash back on purchases at.. Travelocity, Microsoft and dozens of other retailers. Cash back is paid quarterly by cheque or via PayPal.”

Save with SPP has personally tried both these types of things, and what the articles are saying is true. If you are great with your credit cards and pay them off completely each month, these ideas are like free money. If, like Save with SPP, you are less than perfect with your credit cards, the benefits of the cash back are minimized – you have spent more in interest, potentially, than what you are getting back in rebates.

Credit and its evil twin, debt, are a lot like being overweight and out of shape. With a lot of work, and a lot of cutting back, you can make a dent in excess credit (or weight). But you need a lot of self-discipline, and if you have it, you’ll succeed.

So, if you’re good with your credit card and can generate extra cash via cashback products, a good destination for them is the Saskatchewan Pension Plan. Even small amounts here and there will add up over time and will augment your retirement income – a sort of future cash back reward, if you will. 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

Pets can make you healthier, feel less isolated

While there are certainly days when Save with SPP wishes there were fewer barky, early-rising and cheese-focused pets living here, the value of having them cannot be overlooked.

Writing in the Chronicle-Herald, Darren Steeves notes that “there is a ton of research on the benefits of having a pet,” including lower blood pressure, healthier hearts, and weight reduction through walking.

“In 2010, a study found public housing residents who walked dogs from the SPCA five times a week lost an average of 14.4 pounds over the course of a year. And here is the kicker: participants considered it a responsibility to the dog, rather than exercise,” he writes.

There are also great benefits for our mental health, reports Australia’s Newcastle Herald.

The article quotes Dr. Paula Parker, speaking about research conducted by the University of Manchester for the Australian Veterinary Association. She states that “the human-animal bond plays a crucial and positive role in the health and wellbeing of the community.”

Those benefits, she says in the article, include “companionship, health and social improvements and assistance for people with special needs,” and she further adds that the research suggests pets “can help people who are struggling with a serious mental illness to manage their mental health.”

And even if you don’t have a pet at home, you may find one helping you when you’re away.  Toronto Life reports that therapy dogs are now on staff at the busy Pearson Airport. “There’s a new crew of canines hanging out at Pearson, but these dogs aren’t drug sniffers. Instead, they’re part of a new therapy dog program, in partnership with St John Ambulance, designed to help travellers de-stress,” the article notes.

We know all about dogs helping those with vision and hearing problems, but increasingly dogs and cats can benefit those with other conditions, such as PTSD.

It’s clear that pets help us physically and emotionally. Looking after them gives us a sense of purpose, even once the kids are gone and the nest is relatively empty. So if you are able to have pets and haven’t yet made the plunge, you might want to consider visiting your local SPCA to see if any furry friends are looking for forever homes.

You’ll need to have savings, in retirement, to look after your four-legged friends’ food and veterinary needs. A good way to stock that future larder is to establish a Saskatchewan Pension Plan account, and put away money regularly for your future. 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

Reality check – working past age 65 may not be the best solution

When you ask people when they plan to retire, many say that they’ll keep working, even past age 65. None seem to be concerned about things like their health, or whether or not their employer will still provide benefits, or if it might be a good idea to yield the job to a younger person.

A poll out recently by CIBC suggests that a surprising one quarter of Canadians who are retired regret that choice. “Twenty-seven per cent of retired Canadians regret having left their jobs and 23 per cent of retirees have tried to re-enter the labour market,” CIBC’s research notes. “When asked why they chose to return to work, 59 per cent said it was for intellectual stimulation and 50 per cent said it was because of financial concerns.”

Certainly, leaving a full-time job means leaving colleagues and friends behind. But the financial concerns are perhaps more telling.

Recent Bank of Canada figures cited by Better Dwelling show household debt is an eye-popping $2.16 trillion, with most of the debt on mortgages. Even if you were planning to retire at 65, that debt is a factor that could throw a wrench in your plans.

An article in The Province suggests that carrying debt into retirement may be a reason people are thinking of going back to work. “When you need more of your retirement income to service debt, there is less left over to enjoy your golden years,” the newspaper points out. “Some think that they’ve got savings to help them top up what they’re short on after they retire, but that’s not necessarily the best strategy. If you need your savings to generate enough income, depleting your savings multiplies the negative impact on your financial situation at a time when you’re least able to manage through it.”

So what options do seniors have to deal with post-retirement debt? Going back to work is one, and another is a reverse mortgage. “On a national basis, reverse mortgage debt stood at $3.425 billion outstanding as of October 2018, marking its highest point in 8 years,” reports Real Estate Professional magazine.

The Money Ning blog says that while there are pros for employers in keeping older workers on the job, such as retaining their experience, and reducing government program spending, there are also cons.

“For workers who are either not passionate about their work, or who are working in a job that is physically demanding or extremely stressful, the idea of keeping that job for longer is not a pleasant one,” the blog notes. “In some cases, working past the mid-60s may not even be entirely safe,” the article continues.

Will employers still offer the same benefits to those age 65 and older? It’s certainly worth checking before you decide to stay put.

Other negatives are preventing younger workers from advancement, which affects their own ability to grow their income and save for retirement. These kids often can’t afford to buy and end up back home with their retiring parents.

So let’s recap. Boomers are carrying record debt levels as they approach retirement. Once retired, they must use their pensions or personal savings to pay down debt, leaving less money for fun and travel. That makes many crave the workplace once again, or have to do reverse mortgages to make ends meet.

Sure, it would be great to retire without debt, but it seems less possible than a generation or two ago. The takeaway here is that notwithstanding debt payments, we all need to put as much as we can away for retirement. Those savings give us options and more wiggle room at age 65, and maybe the ability to enjoy life without meetings, commuting, performance reviews and other workplace drama.

If you don’t have a pension plan at work, or if you do and want to supplement it, the Saskatchewan Pension Plan is a great place to start, with low fees, a strong investment track record, and flexible ways to turn savings into income at retirement. Check them out today at saskpension.com.

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

Now that you’ve saved for retirement, it’s time to spend wisely: Warren MacKenzie

If we save diligently, or inherit wealth, or otherwise get to retirement with money, that’s half the battle, says Warren MacKenzie, head of financial planning at Optimize Wealth and the author of three books on retirement planning.

More important, he told a recent meeting of the Ottawa Share Club, is spending your money wisely.

MacKenzie told the story of three siblings who each inherited multi-millions. After a few years, he says, “one is broke, and living in a trailer with his girlfriend.” A second has burned through three quarters of the money already on “cars, clubs and (the high life),” while the third sibling, an accountant, has most of her share left, is overwhelmed by it, and feels it was “the worst thing that ever happened to her,” he told the audience.  All three, he explains, lacked a strategy to use their wealth wisely.

MacKenzie says that many people fail to accurately estimate their retirement costs. “You need to calculate your expected expenses, and exaggerate them” to build in some room for the unexpected, he says. You “should assume you will live to age 100,” he adds, and estimate what your future medical costs might be for things like long-term care.

If you do that, and you find that there’s still a surplus, you may be wasting the opportunity to use some of your savings for other purposes, he says.

Most in the financial industry “don’t encourage people to think about a surplus,” he says. That’s because the financial sector makes money from managing your investments, but don’t want you to take the money out and spend it.

But caution about the future, fears of being “hit by lightning or a tornado,” compel many of us to hang on to our savings, even if we have more than enough to cover our needs.

Research, he noted, shows that there is a relationship between money and happiness, but it is different than one might think. Those making only $10,000 a year tend to be less happy than those making $50,000,” he says. But there is “no difference in happiness” for those making any amount that is more than $50,000.

“Money is a lot like food – too little is bad for you, but too much is bad for you too,” he explained.

In his view, those with more than sufficient wealth to cover their retirement expenses have options.

  • Do nothing, like most people, and hang on to the money for life (you’ll face income taxes and the stress of managing it)
  • Live richer and treat themselves more (spend the surplus on yourself)
  • Pass money on to the kids, but in stages (communicating with them about when they need it)
  • Give the money away (and let the kids figure things out on their own)
  • Create a multi-generational legacy (such as a foundation)

He says that communication about money between the generations is critically important; the kids should know if there is money coming, but should also know if there isn’t. A surprising 70 per cent of attempts to transfer wealth between generations fail, he pointed out. “Perhaps it is better to give money away while you are living – there are few legal disputes about smaller estates,” he says.

It’s a good thing, he says, to leave your kids no money but to pass on good values. It’s also good to leave money and values. But, he says, it is not a good idea to leave money “without passing on good values.”

Philanthropy is a positive thing that helps out the charity “but benefits the donor even more,” he said. He concluded his talk by noting that “he who knows he has enough is rich.”

Warren MacKenzie’s latest book, is The Philanthropic Family, subtitle – 5 Keys To Maximizing Your Family’s Happiness And Leaving A Lasting Legacy.  We thank the Ottawa Share Club for inviting us along to hear Warren MacKenzie’s talk.

Before you think about what to do with any retirement surplus, you need to be saving for that first day after work. An option for your saving strategy is a Saskatchewan Pension Plan account. Check out the SPP today.

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