Offering pension plans for Americans who don’t have them at work seen as way to deliver retirement security: TIME

Creating more pension plans for U.S. workers who lack them at work is seen as one of four key measures that can be taken to improve retirement security there, reports Time magazine.

Writer Thasunda Brown Duckett begins her article by suggesting that “a financially secure retirement should not be a dream but a right. Yet, 40 per cent of Americans are projected to run short of money in retirement.”

The system in place in past years, she continues, where most people had workplace pensions and Social Security as reliable sources of retirement income, has changed. “For most workers today, those reliable sources no longer exist or aren’t enough,” she contends.

“Even among those already in retirement, many have encountered financial challenges, especially amid recent high inflation, necessitating a return to work and a pause on their retirement dreams. Still others reach retirement age only to realize they have not saved enough to make ends meet,” she writes.

Further, she notes, “Our current retirement system focuses almost entirely on helping workers save for retirement; it does little to help retirees turn their savings into the income they need, or make sure that income will last as long as they live.”

So what can be done to help fix this situation, and to deliver better retirement security? Duckett offers up four solutions.

The first step is to increase worker access to pension plans.

“Almost half of private-sector workers—more than 55 million—do not have the option of an employer-sponsored retirement plan. That figure is even more alarming for small-business workers:  78 per cent of those who work for companies with less than 10 employees—roughly 20 million Americans—don’t have a workplace retirement plan option. The federal government and more states should create individual retirement accounts (IRA) for workers without employer plans available to them. To date, 19 states have enacted such IRA-for-all plans for private-sector workers, which would require employers that don’t offer retirement plans to allow their workers to be automatically enrolled in plans facilitated by their state.”

Step two, she continues, is automatically enrolling workers in pension plans.

“More employers should adopt auto-enrolment policies for their retirement savings plan to jump-start their employees’ retirement savings and make sure workers are participating in this essential benefit. They should also include measures that enable workers to grow their savings as they advance in their careers and allow them to seamlessly take those savings with them if they change jobs,” she writes.

The third step, Duckett continues, is to boost financial literacy when it comes to retirement savings.

“Every worker should also be provided with clear, simple information to compare savings and income options and make informed choices in order to reach their retirement goals. Employers should implement workplace financial education programs so that employees continue to learn and take action. When we know better, we do better,” she writes.

The final step is helping people with the tricky “decumulation” phase, where retirement savings is turned to retirement income. The goal is to draw down the savings without running out of money while you are still alive.

“We need to adjust our focus from simply helping people save to also making sure those savings last. Every worker should have access to low-cost investment options that provide ample retirement income,” she concludes.

This is a great article. Here in Canada, the Saskatchewan Pension Plan is an example of a pension plan that’s available for those who don’t have a pension at work. Other organizations, such as the College of Applied Arts & Technology Pension Plan, OPTrust, and Common Wealth, are now offering pension coverage to previously uncovered workers.

The idea of auto-enrolment – where you are automatically signed up for the company plan, with the right to opt out – seems preferable to waiting for people to opt in. This idea has been tried out in the U.K. and has boosted pension coverage, so maybe it needs to be seriously considered here.

Financial literacy, particularly around retirement savings, is very important. It is very hard, while working, to visualize how the money might work when you are retired. More information for pre-retirees can only help.

As for decumulation, again, our retirement system seems better at the accumulation phase than at the drawdown stage. People aren’t given guidelines on how to make their money last, and are left to their own devices on how to get there.

So, if you aren’t covered by a workplace plan, consider SPP, an open, voluntary defined contribution plan that currently delivers retirement security to more than 30,000 Canadians. Any Canadian with available registered retirement savings plan room can sign up.

Worried about running out of money in retirement? SPP allows you – without taking money out of the plan – to convert some or all of your savings into a lifetime monthly annuity payment. You will get a payment on the first of every month for the rest of your life.

Great news! SPP’s flexible Variable Benefit option is no longer limited to those members living within the borders of Saskatchewan. Now all retiring SPP members across the country can take advantage of this provision, which puts you in control of how much income you want to withdraw, and when you want to withdraw it. You can also transfer in additional savings from other unlocked registered sources. For full details see SaskPension.com.

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In this second of a four-part series, Save with SPP talks to Janet Gray, CFP, of Money Coaches Canada about the difference between saving, and investing for your future

Any discussion about saving should begin by setting out the difference between saving and investing, says Janet Gray, CFP, of Money Coaches Canada.

“Saving money is something that is imminent or short term (less than 12 months),” she explains. You are protecting its value, and the use of that money is soon – so your savings need to be “secure and liquid,” she says. An example might be putting money in a savings account or a GIC.

“Investing is where you want the money to work for you. You are delaying the use of that money” while allowing it to increase in value (hopefully) and will use it in the future for something more mid to long-term, such as retirement or a large goal. Examples would be investments in mutual funds, exchange-traded funds, bonds and other securities.

“You have to save to invest,” she explains, “but don’t need to invest to save. Investing is a longer-term thing, saving is a shorter-term thing.”

OK, we now see the distinction. But why, we asked, don’t more people save?

Gray says there are a lot of factors at play.

“There is the issue of why – why do I need to set money aside,” she explains.

Many people get hung up on their everyday living costs and can’t imagine a future where there’s no mortgage, no kids to feed, and no car payments. But for most of us, the future will be just like that – less expenses, but less income. So saving and planning is important.

“That awareness… can possibly help you to save better,” she explains.

Some people think they don’t have to save because they have a good pension plan at work. But things can change – you may change jobs, and in some fairly rare cases, pension plans serving the private sector, like Nortel or Sears, run into financial trouble.

There are those who could save, but who simply are “in denial,” or are naïve, and have developed a “keep spending” lifestyle, she says. When you “avoid looking at your finances… and you are spending without awareness,” it’s easy to simply disregard saving, she explains.

“Some with low incomes simply can’t save. They can’t find any excess to save, they are spending every bit of their income. They lack the means to save,” she says.

But for others, “knowing where your money is going” is how to turn things around and get on the path to saving. Start keeping track of where your money is going.

“Maybe you have dinner out three times a week, or travel a lot, or give expensive birthday presents to the kids,” she says.

“These are all examples of discretionary spending that can be reduced,” she says. We can all fall into the trap of spending all our money on “what’s comfortable and pleasant,” but a careful review of “all your categories of spending” can help identify areas where you could cut back and begin saving.

“I tell people that once the bills are all paid, they should include saving as a ‘bill’,” she explains. You can start small with the saving habit, maybe $10 a week, and gradually grow that amount over time, she explains.

Once you really think about spending, you will find there is a lot of room for change, she says. “Start questioning every payment amount – are there discounts, or coupons? Can you use a savings app? Are there special shopping days, like Cyber Monday, to take advantage of?”

She agrees that it is time-consuming to find dollars to save by looking at all flyers and comparison shopping, but it pays off. “If you shop for convenience, without a list, you will find that convenience costs money,” she explains. Focusing on getting as much as you can for your spending dollar will lead to savings and more satisfaction, she says.

If you are craving a pizza, “make your own, and put $25 in a savings account,” she says.

She says that a recent read of the book The Millionaire Next Door shows the importance of frugality. Really rich people, like investor Warren Buffett, got there because they didn’t spend their money on flashy items and big houses. Instead, they live in modest homes and drive older, sensible cars, she says.

“The unassuming ones are the millionaires… they are superconscious about their money. They try to avoid large fees, and refuse to pay full price for items they want,” she explains.

Even if you have a big house in a nice area, the higher costs of taxes and maintenance can impact your ability to spend when you’re older, she says. “When you see big fancy cars pulling up to the food bank, those are people who are often deep in debt,” she says.

We concluded our chat with a look at the two main savings vehicles in Canada – the registered retirement savings plan (RRSP) and the Tax-Free Savings Account (TFSA). What are the differences between the two?

“In choosing between these two, it all depends on the eventual use of the money,” she explains.

With an RRSP, you get a tax deduction on the money you contribute. That money grows tax-free until you start withdrawing money from the RRSP or from a registered retirement income fund (where RRSP funds can go after you reach age 71).

An RRSP, she notes, “is best for retirement savings, especially for those who are now working and making a good wage – say $70,000 a year or more.” Generally speaking, she explains, if you put the money into an RRSP while you are earning a higher income, the income you receive from it in the future will be taxed when you are earning a lower income/lower tax rate in retirement.

That’s why for those with a lower income – say $40,000 or so – there isn’t as much of a benefit from an RRSP, she says.

“If you are making less than $40,000 or $50,000, you don’t get the same tax benefit from an RRSP, so you might be better off with a TFSA,” she explains.

With a TFSA, there’s no tax deduction for putting money into an account, but your savings grow tax free, and there’s no income tax implications when you withdraw money from your TFSA.

TFSA income, unlike money from an RRSP or RRIF, does not impact your ability to receive Old Age Security, she adds.

TFSAs are a nice place to save, and enjoy a shelter from taxation. “Almost everyone can take advantage of the features of a TFSA,” she says. If you fill yours up, help your spouse fill theirs, she advises.

So, summing it up, if you think you can’t possibly save, it may be because you don’t know where your spending is currently going. Lock the spending part down, and try to take advantage of sales, flyers, and coupons, and by spending less you’ll have more to put away in a savings vehicle. Think of savings as a bill you have to pay, set it as auto payment and increase it every month.

In the next part of our series, we’ll take a look at debt.

If you are saving for retirement on your own, take a look at the Saskatchewan Pension Plan. You can start small, and ramp up your saving over time. SPP will do the hard part – investing your money in a pooled fund at a low cost – and at the end of the day, you’ll have a new source of retirement income for life after work.

Great news! SPP’s flexible Variable Benefit option is no longer limited to those members living within the borders of Saskatchewan. Now all retiring SPP members across the country can take advantage of this provision, which puts you in control of how much income you want to withdraw, and when you want to withdraw it. You can also transfer in additional savings from other unlocked registered sources. For full details see SaskPension.com.

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Is inflation killing the retirement dreams of Canadians?

Writing in The Brantford Expositor, Pamela Heaven cites new research, which suggests that while retirement security may be improving, “Canadians aren’t buying it.”

Her article looks at recent findings from the Natixis Investment Managers’ Global Retirement Index, which reported “a higher score for retirement security than the year before.”

The research, she continues, found “improved economic conditions in the most countries, including Canada, mainly in employment growth, wages gains and interest rates.”

However, writes Heaven, “Natixis research shows that this (financial) optimism is not shared by Canadians in their everyday life.”

“Saving for retirement was already a challenge. Now, as people think about the impact of higher prices, longer lives, and the potential for reduced retirement benefits, many are doubting whether they will be able to put all the pieces together,” Dave Goodsell, head of the Natixis Center for Investor Insights, tells the Expositor.

The article notes that 32 per cent of working respondents who had more than $100,000 in “investable assets” believe that “inflation is killing their dreams of retirement.”

And, the article continues, “38 per cent think it will take a miracle to retire securely, up from the 25 per cent who said the same in 2021.”

Eighty per cent of those surveyed “say that recent history has shown them how big a threat inflation is to their retirement security.” Worse, 70 per cent fear that high public debt may lead to a cut in government retirement benefits “down the road,” the article reports.

This, the article adds, may lead to “tough choices” in retirement for some of us.

“About half expect to have no option but to live frugally in retirement, 20 per cent expect they will have to work and 21 per cent expect they will have to sell their home,” the article reports.

Canada, the article concludes, is ranked 12^th in Natixis’ “annual index among 44 countries,” with citizens of Norway, Switzerland, Iceland and Ireland being ranked as the top four countries for retirement security.

It’s an interesting article. There is no question that inflation can be a huge negative when it comes to retirement saving. If the price of everything is going up, it is harder to find money to tuck away for the future.

Those of us who have a pension arrangement through work are paying their future selves first. If retirement savings is deducted from each paycheque, after a while you don’t miss it and manage with what’s left.

If you don’t have a pension plan at work, don’t worry – you can join the Saskatchewan Pension Plan and set up pay yourself first automatic contributions from your bank account. You can start small, and then grow your contributions as things improve in the future. Your contributions to SPP are invested in a low-cost, professionally managed pooled fund, and will offer an important source of retirement income when the days of work life fade into memory.

Great news! SPP’s flexible Variable Benefit option is no longer limited to those members living within the borders of Saskatchewan. Now all retiring SPP members across the country can take advantage of this provision, which puts you in control of how much income you want to withdraw, and when you want to withdraw it. You can also transfer in additional savings from other unlocked registered sources. For full details see SaskPension.com.

Check out SPP today!

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SPP’s Shannan Corey — “we get to impact individual members’ lives”

Recently, Shannan Corey, the Saskatchewan Pension Plan’s Executive Director, was interviewed by Benefits Canada magazine.

The article speaks to Shannan’s back story — her father was an actuary, the magazine reports, and “after earning her mathematics degree at the University of Saskatchewan, she became an associate actuary, spending a few years in consulting with a focus on pensions,” the article continues.

“What resonated with me from a young age was how you got to impact people’s lives. I saw the impact on individuals and on employers being able to [improve recruitment and retention] by offering a pension and it just felt like a strong connection for me,” Shannan tells Benefits Canada.

After her time as a consultant, Shannan “spent some time working in total rewards in the private sector,” the article notes. She later became a chartered professional in HR, the magazine reports, before a move to the public sector, the article adds — and in 2021 she joined SPP as its Executive Director.

“I feel like I’ve gotten to see many different avenues and I keep gravitating back towards that member perspective. So that’s why I ended up with the Saskatchewan Pension Plan. We get to impact individual members’ lives, not just in Saskatchewan, but for anyone across Canada who can join our plan. That really resonates with my personal value system,” Shannan states in the article.

Her role at SPP involves “overseeing the entire pension program, facilitating digital transformation and keeping the operations teams running,” Benefits Canada reports.

“The SPP is very regulated so there’s a lot of compliance. There’s no other plan like ours in the world, as far as I know, so we have a very unique and complicated governance structure. We spend a lot of time on governance regulations. Thinking about changing our products requires a lengthy foundation setting with the regulators in order to move towards changes. So that’s a big part of what I do,” she states in the Benefits Canada article.

Another key duty for Shannan, the magazine continues, is overseeing “business development and marketing, which is unique department to the SPP because it’s a voluntary plan and it actively recruits members,” the article notes.

Our former Executive Director Katherine Strutt is also quoted in the article.

“I noticed right away Shannan was a quick study, so that allowed her to do what she needed to take over in the brief timeframe,” says Katherine. “She’s very qualified and brings a wealth of experience to the position. And I’m grateful the board chose such a qualified individual to take over the SPP,” states Katherine, who was with SPP since 1990 before retiring a couple of years ago.

The article remarks on the fact that we are seeing more women in leading roles in the pension industry these days than in the “male-dominated” past.

“It certainly wasn’t a traditional field for women when I started out. I was fortunate to have great mentors and I think that’s key. Switch to today, the SPP has a primarily female workforce. I think it’s a great privilege and an important responsibility for me to hopefully continue with mentoring women and all the staff here,” Shannan tells Benefits Canada.

SPP has been helping Canadians save for retirement for more than 35 years. As the article notes, SPP is a voluntary plan — any Canadian with unused registered retirement savings plan room can choose to become a member. And once you do, SPP becomes a do-it-yourself retirement program, offering professional, pooled investing at a very low cost. At retirement, SPP will help turn your savings into income — including the possibility of a lifetime monthly annuity payment. Check out SPP today!

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In this first of a four-part series, Save with SPP talks to Janet Gray, CFP of Money Coaches Canada about what a money coach does and how they can help

Fresh from an interview with CTV Ottawa on record-high credit card debt, Janet Gray of Money Coaches Canada says that while money advice is a key part of her role, there is more to being a money coach than setting up budgets and financial plans.

“Yes, we coach people about money,” she begins. “But what’s a bit unusual about being a money coach is that unlike investment, insurance companies or most other financial planners, we aren’t product focused.” Money Coaches Canada doesn’t sell any investment or insurance products — their purpose is to offer advice and coaching, she explains. All the coaches are certified financial planners (CFP), she adds.

“We are CFP professionals who talk to you about how to optimally manage your money — taking the worry out of it,” she explains. “We help people to see the big picture — here’s your money in black and white, here are systems to manage your cash flow, your taxes. And assist in making your life plans like retirement or estate wishes a reality” And while money coaches can help you manage debts, they are not credit counsellors, she adds.

The money coach, she adds, is someone who can provide “a safe and non-judgmental space to have conversations about managing your money, and how to make things better.” And while getting people to understand their personal cash flow — “where is your money going” — is important, the goal is to have more of a relationship about money and life decisions between coach and client.

Money coaches can “aid in key life decisions — like having your daughter’s wedding coming up or a desired retirement lifestyle, and how to get there financially.” She notes that if you aren’t aware of where your money is currently going, it’s more difficult to save.

Some of the clients she helps already have plans, but no longer have an advisor, so things get stalled. A coach can get them back on track “to implement their plans, despite all the potholes that keep coming at us in life. It’s an ongoing lifetime relationship, not a `one and done’ thing,” she explains.

A key result of coaching is building people’s financial literacy, Gray explains. Beyond the basics of cash flow and financial plan, coaches find they spend “a lot more (time) on financial literacy; we are educating people all the time.”

“There is great information available that they hopefully can share with their kids — do they know about Tax Free Savings Accounts, and when they can be opened? Do they understand the importance of having a power of attorney document? These are things to know that can help them support their kids’ financial literacy as well” she explains.

Money, she says, is a topic many people are uncomfortable talking about. Years ago, she jokes, people didn’t like talking about sex — but now, it’s money and finances.

“I was on CTV Ottawa today talking about the fact that the average credit card debt in Canada is around $21,000. But we’ve seen clients with triple that debt or more. And it’s not the credit card interest rates that are the problem — they haven’t changed much. It’s the fact that everything else is going up — rent, mortgage interest, gas, and groceries. So there is less left over to pay off credit card debt.”

Gray has been a CFP for 23 years and helping Money Coaches Canada clients for about nine years. “It becomes like a relationship, and I also benefit from those ongoing relationships. I get to know these people and can counsel them for everything — financial decisions, are you still on track. And when you get close to people, and know them, they have someone to talk to about their finances in plain English.” Trust builds up and the relationships tend to grow over the longer term, she says.

She had one client who, facing terminal cancer, wanted to make sure his wife had a trusted advisor to talk to about money after he was gone.

“That’s a key point — it’s not just about money, it’s about lifestyle,” she concludes.

In part two of our four-part series, we’ll ask Janet Gray about one of our favourite topics — saving. Watch for part two next month.

What’s 36 years old, has more than 33,000 members, and manages more than $700 million in retirement assets? Why it’s the Saskatchewan Pension Plan! Find out what SPP can do for you when it comes to saving for retirement — check out SPP today!

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The Saskatchewan Pension Plan is making its Variable Benefit retirement option – previously available only to Saskatchewan residents – available to all members across the country.

This great news – which delivers more flexibility for retirees – was announced via this media release.

With the Variable Benefit, retiring members can choose to leave their savings with SPP, where they will continue to be invested, and can decide how much money they want to receive from SPP, and when. And as well, members can still consolidate their unlocked savings from other registered retirement savings within SPP even after they select the VB option.

“SPP has always been committed to giving members control of their retirement savings – both

in how they contribute and how they choose to collect once it’s time to retire,” says Shannan

Corey, Executive Director. “Until now, legislation has limited the choices members outside of

Saskatchewan had for collecting their pension funds. We’re excited that we can now extend that freedom of choice to all of our members, regardless of where they choose to live.”

The option has been very popular with Saskatchewan SPP members, says Shannan.

“Members outside of Saskatchewan have been asking for the Variable Benefit for some time,” she says. “Until recently, legislation meant that wasn’t possible. They had to either choose an

SPP Annuity or switch their money to a financial institution. Now, members who live all across

Canada have access to the flexibility of a Variable Benefit.”

The removal of interprovincial barriers for the Variable Benefit is the latest major SPP improvement in recent months. Earlier, SPP removed pre-existing limits on how much members can contribute to SPP each year, and on how much they can transfer into SPP from an unlocked registered plan.

“We’ve made significant changes to SPP this year in order to make the plan as flexible and

beneficial for our members as possible,” Shannan says. “For a plan with almost 40 years of history, we’re constantly searching for ways to evolve to better serve our members. Everyone’s situation is different; how much they’ve saved and how they want to spend their retirement. This is just one more way we can help them live the retired life they’ve always dreamed of.”

For further details about the SPP and the Variable Benefit option, please visit.

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These four strategies can help you retire early

A recent CNBC article, asks Certified Financial Planner Michael Powers to offer up some savings strategies that he says — if they are followed — can help make your retirement an early one.

The first one, Powers tells CNBC, is one we hear quite often — pay yourself first.

“Paying yourself first is a strategy where you save a portion of your income before you spend anything, rather than spending first and then saving what’s left over,” the article explains.

We love this advice. If you think of your savings as a bill that must be paid each month, you’ll be regularly putting away money for the future without really thinking about it.

And that leads to the second strategy endorsed by Powers — automated savings.

“When you spend first and only save what’s leftover, you run the risk of overspending and not leaving much room to save,” the article warns. If you are able to, instead, automatically contribute to a savings arrangement (the article cites an employer retirement savings program as an example) on pay day, it becomes “much easier to put aside 10 per cent to 20 per cent of your (paycheque) before you even have the chance to spend it.”

Some employer retirement programs will match the money you contribute, the article adds.

If you don’t have a workplace retirement program, you can save money in your own registered retirement savings plan (RRSP), Tax Free Savings Account, Saskatchewan Pension Plan (SPP) account, or other non-registered savings vehicle. (The article is written for a U.S. audience and discusses similar U.S. savings vehicles for individuals.)

Power’s third point is one folks often overlook — “knowing your retirement number,” the article notes. The retirement number “is the amount of money you’ll need to keep yourself afloat when you’re no long working,” the article continues.

The majority of people don’t know what this number is, the article adds.

“A 2019 report from the Department of Labor explained that only 40 per cent of Americans have calculated how much money they’ll need for retirement. And when you don’t know how much money you’ll need, you may not save enough and run the risk of outliving your retirement funds,” the article warns.

So how to figure out this number?

Powers tells CNBC “you can calculate this number by estimating what your total yearly expenses in retirement would be, then subtracting how much you think you’ll receive through sources of income you expect to earn in retirement, like (government retirement benefits) and income from rental property. What’s left over is the amount of money you’ll need to withdraw from your savings and investments each year in order to cover all your expenses. Multiply this number by 25 (or you can divide it by 0.04) and you’ll be left with the amount of money you need to have saved before you’re able to comfortably retire.”

Powers’ last strategy, the article says, is that you should start saving for retirement early.

“The sooner the better,” Powers tells CNBC. “You want the magic of compound interest to be on your side, so the sooner you can start saving something, the easier it will be down the road. If your account balance grows at a rate of seven per cent per year on average, it will double roughly every 10 years thanks to compound interest.”

So, to recap — pay yourself first. Make it automatic. Know your retirement savings “number.” And start early.

If, as the article suggests, there’s a retirement savings program available at your work, be sure to join it and contribute to the max. If you don’t have such a program, have a look at what SPP can do. You can start as early as age 18. You can make savings automatic, either through pre-authorized contributions or by setting SPP up as a bill and making automatic contributions that way. You can figure out what your SPP savings will provide with our Wealth Calculator. That calculation will help you figure out your Retirement Number (along with tallying up your other sources of future retirement income).

SPP has been helping Canadians build a secure retirement for over 35 years. Check out SPP today!

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Robin Ryan’s book Retirement Reinvention is key reading for any of us — once out of the workforce — who are struggling to figure out what to do with all the time. It all requires a plan.

First, she notes, the act of retiring itself isn’t always a planned thing. It’s one of four reasons “retirement can happen,” she writes — a choice, made on your own terms, or “you are burned-out, dislike, or just done with your current career, so you quit.” The other two reasons are “your career quits you because of outdated skills and/or your age,” or you are “`forced’ to retire because the company wants you gone.”

So if you have landed in the post-work reality, she writes, “the comfort of that (past) identity is lost, along with the work community you’ve been immersed in.” That’s where a plan comes in, she continues.

You need to think about, she writes:

• “What about my identity? Who will I be?
• What about my desire to be productive and important in my own eyes?
• What about my emotional well-being?
• Who will I hang out with?
• What will do with another twenty or thirty years still to live?”

The book addresses these key questions in a well-written, example-laden way, complete with worksheets, and recommends that you plan retirement as well, or better, than you planned your work career. This is not a financial plan, but a life after work plan, the book explains.

Ryan notes that a lot of people just think retirement will be like vacation. They’ll play tennis, or golf, or lie on the beach.

“That plan, then, is to do nothing. The trouble with doing nothing is that you never know when you’re done! There is so much more to consider. How will you contribute? What will you learn? Whom will you teach? You’ll have plenty of time to lie on the beach, but you will also need to think about how you will nourish your soul.”

For those of us who just can’t visualize new things to try, she includes a detailed two-page list that includes things like dancing, dating, home brewing beer, pets, philanthropy, wine tasting and yoga.

In a chapter for those thinking of relocating when they retire, she advises that “moving quickly can be a serious mistake… if you think you want to move to be near family and grandchildren, maybe a dry run, such as renting nearby for a year, is a good way to start.” Many boomers “regret the move afterward,” she warns.

In a chapter on retirement spending, she notes that retirees spend more in their sixties than in their seventies, eighties and nineties. “This makes sense, as people in their sixties are more active and likely to do more travelling, and to enjoy sports and entertainment, and thus spend more,” she writes.

However, she continues, while a rule of thumb is that your retirement income should be around 80 per cent of what you were earning prior to retiring, “Money magazine warns that new research on household spending after retirement shows there is no predictable pattern… some households spend more — way more — than they did before retirement.”

Housing costs can increase in retirement for those of us who “maintain, rather than pay off,” their mortgages, she notes. Those retirees who are frugal tend to be able to live on 80 per cent of what they made before retiring, she adds. So, you do need to pay attention to your spending and living within your means, the book says.

Many retirees don’t want to try new things, which is one of several obstacles to a successful retirement.

“People over 60 can be very good at finding the negative, making an excuse or setting up an obstacle that they’ve put in their own way. Instead of seeing that a new activity, service or job could be fun and introduce them to new people and expand their world, they only see what might be wrong with it. You must approach retirement with an `I can do it’ attitude. That is imperative. Be open and flexible. Look for opportunities — they are all around if you look for them,” she writes.

Isolation is a danger as we age, she writes. We need to “make new friends and reconnect with the old.” Be a joiner, she advises — book club, card groups, any community group may be of interest. Rekindle old friendships via Facebook. And if there’s nothing out there to join, start something, she writes. “Dinner groups… (and) movie nights are very popular,” she writes, adding that knitting groups and poker nights can also be fun. “Don’t wait for the group or activity to find you — look for people and invite them to join you,” she writes.

She concludes by advising readers to “be flexible. Your plan is just a plan. You can alter it, and you can add in new things as you test drive them. You may meet new people who take you on new adventures. If you try something and it’s not great for you, don’t do it again. Make sure any volunteer work feels rewarding. Most of all, enjoy your days!”

This is a great book. As George Harrison once sang, “if you don’t know where you’re going, any road will take you there.” As retirees ourselves, we found joining local line dancing classes — an activity neither of us had ever done before — has indeed created many new friendships, and adventures. We were on a line dancing bus trip to Nashville last year, and are going on a line dancing cruise next year. Who knew we would like line dancing? We sure didn’t, but we do now.

An important consideration for retirement is saving up for it. If you don’t have a workplace pension plan, have a good look at the Saskatchewan Pension Plan. It’s a voluntary, defined contribution pension plan — you decide how much to save, and SPP looks after the heavy lifting of investing those savings via a professionally run, low cost pooled fund. When it’s time to try something new in retirement, SPP help you turn savings into income, including the option of a lifetime monthly annuity payment. Check out SPP today!

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Three tips to help lower-income Canucks save for retirement

Let’s face it. For those of us who are earning a modest income, just making ends meet is a challenge — and putting the notion of saving for retirement on top of that seems, well, unlikely.

But it’s possible, writes Amy Legate-Wolfe of The Motley Fool Canada in an article that appears on Yahoo! Finance.

She opens her article by defining a “low income” as one that “falls below 50 per cent of the median after-tax income of Canada,” which works out to $34,200 annually.

“This amount certainly makes it hard to save for retirement if you’re just trying to get by, but it can be done,” she writes.

First, she notes, you have to start, even if you start small.

“The worst thing Canadians can do is put off saving because they fear they don’t have enough. While investing takes research, saving does not. So, a great starting point is to just start,” she encourages.

A good target for low-income savers is one per cent, she writes. “From there, consider making a one per cent increase in that amount every quarter, every six months, or whenever you get an increase in pay,” she continues.

“Even just that small amount could create savings of $4,104 in the first year! That makes you all that much closer to your retirement goals,” notes Legate-Wolfe.

Next, she advocates for safe investing when you are earning a modest income.

“If you’re putting savings aside on a low income, a large portion should be kept safe for as long as possible. In this case, consider investing in 10-year Guaranteed Investment Certificates (GIC) from banks. These fixed interest rates will add on that interest each year! For example, most banks offer a 10-year GIC, which can be around four per cent especially if you put it in a non-cashable GIC. This means you cannot take it out before that 10-year mark, however,” she writes.

After starting to divert one per cent of earnings to savings, and putting most of it into GICs, Legate-Wolfe’s final piece of advice is to consider investing a smaller portion of your overall savings in blue-chip, dividend-paying stocks. She suggests that stocks like the Bank of Montreal (BMO) in an example of a company “that provide(s) passive income through dividends on a regular basis.” The dividend income “increases your savings… (but) you can also use that cash flow to reinvest in other stocks, or your GIC.”

So, summing up the tips from this article — don’t put off starting to save for retirement, even if you have to start small. Consider safe investments like GICs first before wading into stocks. If you do consider stocks, look for dividend payers with a reliable track record.

Another route you can take is joining the Saskatchewan Pension Plan. You can start contributing at any level, and can increase your contributions as your circumstances improve. SPP’s experts will invest your savings for you in a low-cost, pooled fund, relieving you of the costs and stress of picking your own investments. And when it comes time to cash those savings into retirement income, SPP is there to help with many options, including the chance to receive a lifetime monthly annuity payment.

Check out SPP today!

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We run into lots of fellow seniors as we line dance our way around town, and we’re always running into discussions about whether — as retirees — we should ditch the family home and rent, or hang on.

Save with SPP decided to see what others have to say on this topic, which seems to become more and more important with each passing birthday.

The folks at MoneySense took a look at this topic a few years ago, and had some interesting thoughts.

“Those who criticize renting over home ownership often ignore some costs of owning a home. Beyond a mortgage payment and property tax, home insurance is higher when owning versus renting. Condo fees may also apply. There are maintenance costs, repairs and renovations. If mortgage rates rise to more normal levels, you can expect your mortgage payment to be higher in the future. Home ownership has costs as well as benefits,” the article tells us.

An article in The Globe and Mail looks at the issue a little differently.

Noting that two-thirds of Canadians own their own homes, the article asks if home ownership still makes financial sense for the older folks among us.

“With many older Canadians approaching retirement with little savings – and some even carrying significant debt – selling the family home and renting may mean the difference between just getting by and living a life free from financial worry,” the article suggests.

The article quotes Scott Plaskett of Ironshield Financial Planning as saying those of us with homes “can be equity-rich and cash-poor: you are worth $5 million on paper, but you can’t pay for dinner because you have no liquidity.”

Selling the house and then renting fixes the liquidity problem, the article contends.

There are pros and cons to renting, writes Jean-François Venne for Sun Life.

He quotes real estate broker Marie-Hélène Ouellette as saying “you first have to consider the pros and cons of being an owner versus a renter. The biggest difference between the options is in the level of responsibility and freedom.”

“You obviously have more freedom when renting since you can leave when your lease is up. And you have fewer responsibilities because the owner takes care of the maintenance. But renters can also have less control than owners over things like decorating, repairs and even pets. And if you’ve been a homeowner for a long time, losing control and choice isn’t always easy to handle,” she states in the article.

The article makes the point that while owning a home usually means its value increases over time, “values do sometimes drop. And as a retiree, you won’t have a lot of time to make up for a decline in value.”

As well, your money can be tied up for a while when you sell or purchase a property, the article adds.

In the article, financial planner Josée Jeffrey says that it can be an unpleasant surprise, for those who have paid off their mortgage, to have to pay rent again. And, she adds, while you no longer are paying property taxes, they may be built into your rent, which usually goes up every year.

There’s a lot to unpack here. Owning means a long commitment to paying a mortgage, as well as property taxes, maintenance, but also your heat, light, and water bill. If there’s a driveway or a lawn it’s on you to clear away the snow and weed-whack the lawn. “Maintenance” involves fixing things that break, like toilets or garage doors or ovens and fridges.

Renting liberates you from many of these responsibilities. But rent can go up — and go up quite a bit if, for instance, the place you’re renting changes ownership. Not all landlords are quick to fix things that break (some are, and bless them), and it’s true — if you are used to owning prior to renting, you’ll have an inescapable urge to bang a few nails into the wall and hang up some artwork, which is typically frowned upon.

So this is a decision you will have to think long and carefully about, concludes an article in Yahoo! Finance.

“Don’t discount emotional issues when making this important decision,” the article advises. “Do you love the idea of owning your own place and fixing it up the way you want? Or will it be a big relief after years of ownership not to worry about the lawn or a broken sump pump?”

The article concludes by stating “while your decision needs to be financially sound, make the decision that makes the most sense for you. Not being a homeowner can be freeing, scary or both. Your home, its location and amenities should fit the life you lead now.”

If you are renting or paying for a mortgage, be sure to still put something away for retirement. A little extra money when you’re older will help with things like future property tax or rental increases. A wonderful retirement savings program open to all Canadians with registered retirement savings plan room is the Saskatchewan Pension Plan. A not-for-profit, open, voluntary defined contribution plan, SPP has investment experts who will invest your retirement savings in a low-cost, pooled fund. When you’re over the walls and away from work, SPP can help you convert those savings into income — including the possibility of a lifetime monthly annuity payment. Check out SPP today!

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