In Longevity Lifestyle by Design, author Mike Drak and a team of co-authors make the case that there’s much more to retirement than simply saving cash.

Few people, notes the preface, prepare for “the crucial part” of retirement — “how they’ll spend their days, how they’ll find meaning and purpose, how they’ll avoid feeling isolated or lonely, and whether they’ll either work part-time or volunteer, or do both.”

“If you think that by retiring all your problems will magically go away, I hate to tell you — they won’t,” writes Drak. He notes that there can be “a big difference between being retired and having a great life,” citing the example of star quarterback Tom Brady, who “unretired” after just 40 days.

He shows, via a graph, that there are three types of retirees — the “Financial Independence Retire Early (FIRE)” and comfort-oriented crowd at one extreme, and the “work till you drop” gang at the other end. Most of us are in the middle — navigating an “unfulfilled life of leisure” or “work(ing) to make ends meet.”

Unlike the super-motivated FIRE and “till you drop” groups the middle group may tend to be “unaware of what drives them, and unsure of what they want.”

The book then sets out to help those without clear goals, purposes or defined values to acquire them. We all have values, he writes, but are our daily actions in retirement aligned with them? Have you added retirement activities that “give your life meaning,” or that you “love to do,” or are a passion for you? If not, writes Drak, you may experience “retirement stress,” a life that is out of whack with what truly motivates you.

He cites research by Dan Buettner that found that “happiness/longevity = relationships, plus health + financial security + spirituality + positive attitude + purpose.”

In a section that links work to “the fountain of youth,” Drak writes that continuing to work — perhaps at something more aligned to your values and passions — should not be ruled out in retirement. Work, he writes, “keeps you young,” as well as mentally sharp. It gets you “off the couch and helps you interact with others, he adds. It also helps you avoid running out of money in retirement, he notes.

The last section of the book outlines some wise words from a variety of authors. Susan Williams writes that women need to boost their financial literacy about such things as retirement income. Citing CNN research she notes that “nearly 60 per cent of widows and divorcees wish they had been more involved in financial planning decisions” and “56 per cent discovered hidden debt, inadequate savings… or (investment choices) that affected their lifestyle and retirement savings goals.”

Drak concludes by noting that while retirement isn’t only about money, you do need “sufficient” money in retirement. People are living much longer, so don’t think of yourself as being “old” at 65, he continues. Have something good to do in retirement, work on improving relationships with spouse and family, and remember that “happy, positive, optimistic retirees are heathier and live longer.”

This is a well-written, fun-to-read and exceptionally helpful book. To paraphrase Aerosmith, retirement is a journey rather than a destination. Drak’s thoughtful work here will help you ensure that your future self doesn’t spend retirement on the couch, watching the news.

As the book suggests, while saving money is only one part of a long and happy retirement, it’s still an important one. If you don’t have any retirement savings program at work, or are self-employed, the Saskatchewan Pension Plan may be just what you’ve been looking for. SPP will invest your contributions in a pooled fund at a low management cost, and grow them into future retirement income. Check out how SPP can work for you.

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“Greyer” workforce retirements rise, creating skills gap: TD

If you think you’ve noticed more grey heads around the office of late, you’re not wrong — but things may be about to change.

According to a new report by TD Economics, cited in an article in Wealth Professional, while more older workers than usual are currently employed, their pending mass retirement “is a risk to the economy if it is not addressed.”

James Orlando of TD tells Wealth Professional that the problem is that “many Canadians who would have been eying retirement have chosen (or perhaps been forced) to work longer than expected. But older workers will not stay in the labour market en masse for ever.”

It’s a bit of a good news, bad news situation, the magazine reports. Older workers who have delayed retirement have “provided an important buffer for those businesses that would otherwise be struggling to fill skills gaps,” the article points out.

In fact, the article continues, this “greying effect” on the workforce, where workers aged 55 and over stay in their jobs, has been happening since 2020.

Had older workers been retiring at the same rate they did 20 years ago, Wealth Professional reports, there would be an eye-popping one million fewer older people in today’s workforce.

It’s felt, the article tells us, that “lower asset values and rising housing and energy costs” are reasons the older gang is still at their desks — concerns about inadequate “pension pots” is another, the article adds.

Now for the bad news.

Figures show a “17 per cent increase in the number of retirements in 2022 compared to the prior two years, with 266,000 people retiring through the end of last year,” the article reports.

This trend, the article continues, is expected to continue “and with a projected one million over-65s by 2025, this could mean 900,000 retiring based on current participation rates.”

Put another way, that’s a 50 per cent jump in the retirement rate.

Orlando tells Wealth Professional that “businesses cannot ignore the likelihood of losing both the headcount and the knowledge that is in those heads.” He states that there is a need to address the skills gap through greater training of young people and through finding room for people with “foreign credentials and experience.”

“The aging of Canada’s existing population is opening the door to make the structural changes necessary to bring in, integrate, and support all current and future Canadians. Therein lies a huge opportunity for Canada,” Orlando tells Wealth Professional.

We’ve seen similar stories that talk about mass retirements in certain key sectors, such as healthcare and in skilled trades. If there is a positive side to this story, it’s that a once-in-a-generation time of opportunity is presenting itself to younger workers willing to up their skill sets.

Changing jobs often means changes to your workplace pension and benefits. But a job change is no biggie if you’re a member of the Saskatchewan Pension Plan (SPP). Because your SPP isn’t tied to your employer but to you, you can continue contributing at your new job, even if it’s in a different province or territory. This level of portability makes SPP a pension benefit that travels well!

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Saving for retirement sounds like building wealth, but there’s a twist. After the saving is done, you’ll be wanting to convert that piggy bank into income for your golden years.

Do you bet it all on black, or is there a more sensible approach to investing for retirement? Save with SPP scouted the Interweb for some thoughts on the principles behind retirement investing.

Forbes magazine suggests retirement investors should take advantage of “tax advantaged accounts” available to them. In Canada, this would be things like a registered retirement savings plan (RRSP) or tax free savings account (TFSA).

The article suggests an “asset allocation” approach makes sense for retirement investing, with a portion of your investments targeting growth, through exposure to equities (stocks), and the rest to income, via fixed income investments, such as bonds.

You can either buy stocks and bonds directly, or via exchange-traded funds (ETFs) or mutual funds, the article adds.

Forbes believes that your age should help dictate the portion of your holdings that is in equities versus that in fixed income. In your 20s, the article notes, you should invest “90 to 100 per cent” in equities. By your 50s, you should be around 65 per cent equities and 35 per cent bonds, and once over 70, “30 to 50 per cent in stocks, 40 to 60 per cent bonds,” with the rest in cash.

At The Motley Fool Canada, dividend stocks are seen as one of the best investments in a retirement portfolio.

“You pay lower income taxes on dividend income from dividend stocks than your job’s income, interest income, and foreign income. Therefore, it is one of the best incomes to build up and grow as soon as you can. This low-taxed income will benefit you through retirement,” writes The Motley Fool’s Kay Ng.

She also notes that even if you have paid off your mortgage when you retire, you are still going to need income “to pay for home insurance, property taxes, and potentially utilities, condo, or home repair fees during retirement.”

Her article suggests real estate income trusts (REITs) are an investment well suited for your retirement portfolio. Owning REITs, she explains, is like owning shares in a property that is being rented out — you’ll get regular monthly income (like rent) and the value of the properties held by the REIT tend to go up over the long term.

The folks at MoneySense note the RRSP, now more than six decades old, is still a “go-to” for Canadian retirement investors.

The article begins by noting that the RRSP allows investments to grow on a “tax deferred basis,” meaning no taxes are owed until you take the money out in retirement. The Saskatchewan Pension Plan (SPP) operates very similarly, for tax purposes.

MoneySense agrees with the idea that Canadian dividend stocks make sense in your retirement investment portfolio, as they are taxed at a lower rate than foreign stocks in a non-registered account and aren’t taxed in a registered account.

Since the end game of retirement investing is converting savings to income, MoneySense notes the annuity — “which pays a fixed income for life” — is a good idea for some or all of your savings once you have retired.

So, let’s recap. You want to build your retirement portfolio with a mixture of dividend-producing stocks, and interest-producing (and lower risk) fixed-income investments. Real estate income is seen as beneficial both before and after retirement. When retirement begins, these sources will provide regular income, and if you want to guarantee the level of income, you can convert some or all of your holdings to an annuity.

If you’re hesitant about wading into this somewhat complex topic, another way to go is to join the SPP. SPP’s Balanced Fund is invested in Canadian, U.S. and international equities, but also bonds, mortgages, real estate, infrastructure and money market funds. The savings of SPP members are invested, at a very low cost, in a large pooled fund. And when it’s time to collect your SPP benefit, you can choose from a variety of annuity options for some or all of your account. Check out SPP today!

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Do pension protests in France send a message about retirement saving?

As protesters fill the streets of Paris, demanding that a plan to start government pensions two years later be dropped, some observers are saying the situation underscores the need for us all to be more self-reliant with retirement saving.

A report by Global News states that “retirement as a concept is changing, with people in Canada and elsewhere having to rely on themselves more than they ever have.”

First, the article notes, the fact that France is moving the retirement age forward (two years later) is a bit of a red flag.

“A lot of times a country will move those ages forward because they feel they don’t have the resources to pay the pension obligations that they’ve set the system up for. And the idea that your country can’t afford to pay you is something that makes people very nervous and understandably so,” certified financial planner Millie Gormely tells Global News.

Even Canada’s “wonderful” government retirement system can see benefits changed, Gormely warns in the article.

“I think retirement as a general concept is changing a lot. The idea of leaving school when you’re 19 or 20 years old, you go work in a factory, you stay there for 30 years, they give you a gold watch and a pension, and then you sit on the front porch whittling for a few years until you die. That’s just not the norm,” Gormely states in the article.

Workplace pensions, according to Statistics Canada aren’t available to every worker. Stats Can notes that as of 2019, 4.3 million Canadians were covered by defined benefit plans (where the payout amount is pre-determined), 1.2 million were in defined contribution plans (where what you pay in is pre-determined), and 9.6 million belong to “other” arrangements. Since there are 39 million Canadians, these stats suggest that there are millions of us without any workplace pension arrangements.

Retiring and getting the Canada Pension Plan (CPP) and Old Age Security (OAS) is great, but those government benefits don’t pay a whole lot. As of 2021, reports The Motley Fool Canada the CPP pays a maximum of $1203.75 monthly — but the average payment is $635.26. The OAS as of that date was $635.26 per month.

“It’s not that much money. And if that’s the only money that you have, you’re going to have a hard time, so, if anything, that underscores how important it is for people to be preparing for their retirement outside of what they can expect from the government,” Gormely states in the article.

“Saving up your own money to take care of yourself in the future is going to be very important for those of us who don’t have company pensions. And for younger people, especially, the sooner you start, the better off you’ll be,” she concludes.

If you don’t have a workplace retirement savings program, and are saving on your own for retirement, the Saskatchewan Pension Plan is a resource you should be aware of. SPP lets you contribute up to $7,200 a year towards your retirement — and best of all, the funds you set aside are locked-in, meaning you can’t raid that piggy bank until it’s time to retire. Find out why thousands of Canadians have made SPP their go-to for retirement saving!

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It’s inevitable for most of us to bail on our New Year’s resolutions early in the year — say, February.

But there must be some folks who succeed, right? With that in mind Save with SPP took a look around to find a few New Year’s Resolution success stories.

An article from a while ago in Canadian Living found a few.

34-year-old Steven of Saint John’s, NL resolved to “get a training plan together, and try to do it.” The “it” he was referring to was running a marathon — and by the fall, he had succeeded, the article reports.

“I just created a very long-range plan, which built up my running times bit by bit, so that it seemed more manageable,” he tells Canadian Living.

A second testimonial in the same article comes from Jenn, 27, of Kitsilano. She had long resolved to start saving, aiming to get a condo one day.

“Last January I made a resolution to actually set up automatic withdrawal from my paycheque straight to a savings account each month. I don’t have enough yet for a down payment, but I’m doing OK. I think I have been successful because the money comes out as soon as I get paid so I don’t really see it or feel it,” she tells Canadian Living.

An article in the New Hampshire Bulletin offers up a couple more successes.

Ann Patchett, the article notes, successfully gave up shopping for an entire year.

“Patchett’s resolution was actually an effort to understand what was driving her to buy things she didn’t need. By the end of the year, after a thousand little decisions not to buy this or that, she had fundamentally changed,” the article notes.

It’s not easy to find a lot of “kept resolution” success stories, and perhaps some stats courtesy of the Discover Happy Habits blog explain why.

A 2016 study, the blog reveals, of Americans found that of the 41 per cent who made New Year’s Resolutions, only “nine per cent feel they are successful in keeping them.” And an earlier 2007 research project found only “12 per cent of participants who set resolutions were successful,” despite the fact that 52 per cent were “confident of success at the beginning.”

The three little successes covered off in this post are interesting. The marathon runner “had a long-range plan” broken up into easy little steps. Our Kitsilano saver made her savings plan automatic — removing temptation to spend from the equation. Our New Hampshire non-shopper found her willpower increased the longer she stuck to her plan.

Taken together, these steps should work whatever your resolution is — a long-term plan, made automatic, that you stick with.

If saving for retirement is your objective, the Saskatchewan Pension Plan can make it automatic for you. Members can have regular deposits made to their bank accounts through SPP’s pre-authorized contribution program. That way, your contributions are made regularly, perhaps each payday, meaning you’re filling your nest egg before you have a chance to spend the coins at the mall. Check out SPP today!

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Article warns of five “myths” about retirement

Writing for Kelowna’s Castanet blog, Brett Millard examines what he describes as five top “myths” about retirement.

The first such myth, he writes, is the belief that “the cost of living will be lower in retirement.”

Canadians may think “their income needs will be much lower once they stop working. After all, they won’t have those commuting costs or need to make mortgage payments,” he writes. But, the article notes, travel costs are likely to increase for the newly retired, and “plenty of Canadians have debt in retirement.”

Those of us retiring with debt are facing rising interest rates, which will “have an impact on your disposable income,” the article continues. We may also have to help struggling adult children, the article points out.

Finally, longevity — living longer — can impact your bottom line, the article notes. The longer you live, the more you’ll need to pay towards “in-home care, a care home, or renovations to make your home more accessible.”

The next myth, Millard writes, is that “registered retirement savings plans (RRSPs) are a complete retirement plan.” The article points out that RRSP income is not usually sufficient for all one’s needs, noting that most Canadians will be counting on other sources, such as “the Canada Pension Plan (CPP), Old Age Security (OAS), company pension plans, Tax Free Savings Accounts,” and such sources as non-registered investments or income from rental properties.

“RRSPs are one part of an investment plan, but a real retirement plan also includes estate planning, life insurance and tax efficiencies,” Millard’s article advises.

The next myth is that “one million dollars is enough for retirement.”

Millard writes that for a variety of reasons — such as when you start your retirement, and what other sources of retirement income you have — setting a target of $1 million might not be right for you. “The amount that any investor will need when they retire will depend on a whole array of variables, with the target amount being unique to each person,” the article notes.

Lifestyle, the activity level of your retirement, possible inheritances — these all factor into determining how much you actually need to save for retirement, the article explains.

The final two myths are that “retirement plan portfolios should be conservative,” and that you should “never carry debt into retirement.”

On the first point, the older “conservative” investment idea was based on assuming a shortish retirement, the article says.

“Now, Canadians could realistically expect their retirement to last 25 years or longer. Retirement portfolios that need to support you for this many years aren’t going to experience significant growth if they’re made up exclusively of fixed income. A conservative retirement portfolio runs the risk of running out of money,” the article notes.

The “no debt” rule, the article contends, “is not realistic or practical” these days, as “close to half of Canadians carry some sort of debt.” Instead, the article suggests, work on paying down high-interest debt from credit cards, which the article describes as bad debt.

The overall message in this well-written piece is that there’s a lot of factors to consider when thinking of retirement, so rather than going by “myths,” you may want to consult a financial planner.

The government benefits most of us receive in retirement — CPP, OAS, and even the Guaranteed Income Supplement — are paid for life, and therefore cannot “run out.”

Yet many people who have RRSPs choose to continue investing them in retirement via a registered retirement income fund (RRIF), rather than choosing to convert any of their savings into income via a lifetime annuity.

If you’re a member of the Saskatchewan Pension Plan, you have the option, at retirement, to convert some or all of your account into an annuity. That way, you’ll never run out of retirement savings in the future. Check out SPP today!

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One of the few things that cost less when interest rates go up are annuities, long a key piece of the puzzle when turning retirement savings into income. 

Save with SPP reached out to the Canadian Life and Health Insurance Association (CLHIA) to find out if this recent higher-interest environment is making Canadians think harder about annuities. 

According to the CLHIA, Canadians purchased over $1 billion in individual pay-out annuities in 2021. This includes both life and term-certain annuities from registered and non-registered funds.

You can buy an annuity from a provider, usually an insurance company. In exchange for a lump sum, the provider will pay you a monthly income for life or for a selected period of time. We contacted Noeline Simon, Vice President of Taxation, Pensions and Reporting for CLHIA, to ask a few other questions about annuities. 

Q. With higher interest rates of late are CLHIA’s members seeing more interest in annuities? 

A. All else being equal, higher interest rates should result in higher annuity benefit payouts. This should have a favourable impact on demand for the product, however, there may be some time before we see the full evidence of this in the market.

Q. Do you see one benefit of annuities being insurance against volatility? (If markets go down, your annuity payments stay the same.) 

A. Yes. A significant benefit of guaranteed life annuities comes from the down-side protection against adverse market conditions and the annuitant out-living their anticipated savings. 

Q. Did the last 20 years or so of low interest rates sort of deaden interest in the idea of annuities versus registered retirement income fund (RRIF) conversions? 

A. The prolonged low interest rate environment did contribute to dampening annuity sales, even with increasing interest rates it will take time to change retirees’ demand for annuities.

Q. What do you see as the pros and the cons of annuities? 

A. Canadians who are retiring or nearing retirement should consider guaranteed life annuities as a part of their plan, since they provide downside protection against adverse market conditions and reduce the risk of outliving one’s savings. Life and health insurers believe that retirees really can benefit from having a range of choices in terms of products and solutions that can help them optimize their income in retirement. To this end, the CLHIA and others have advocated for a variety of decumulation tools, such as Advanced Life Deferred Life Annuities (ALDAs) and Variable Payment Life Annuities (VPLAs) and will continue to so into the future. 

We thank Noeline Simon for taking the time to answer our questions! 

Did you know that the Saskatchewan Pension Plan is also an annuity provider, and offers a variety of annuity options for its retiring members? According to SPP’s Pension Guide, SPP offers a life only annuity (no survivor or death benefits, but highest payment to you), a refund life annuity (provides a benefit to survivors on your death), joint and last survivor annuity (provides a lifetime pension on your death to a surviving spouse or common-law partner). The joint and last option allows you to choose, for your survivor, a pension equal to 60, 75 or 100 per cent of what you were getting. Contact SPP for more information about the annuity option at retirement. 

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Higher interest rates spell trouble in ’23 for borrowers

A wise colleague once told us that debt was “the slayer of retirement dreams.”

And, according to an article by Pamela Heaven in the Financial Post today’s rising interest rates are giving that slayer even more teeth.

The article notes that at least one more rate hike is expected from the Bank of Canada early this year, which will bring the policy rate to 4.5 per cent. That compares to a rate of 0.25 per cent at the beginning of 2022, the Post reports.

The article quotes a TD Economics report that suggests that the impact of a rising policy rate for Canadian borrowers has “only just begun.” That’s because there is usually a lag between the start of higher rates and the end of a mortgage period or car loan, the article explains.

“Debt service costs rise with a lag as mortgages and loan payments are renewed at current market rates,” state the authors of the TD Economics report in the article.

While household debt levels actually dipped during the lockdown years of the pandemic, they are experiencing a sharp rise today, the article notes.

“Canadians who piled on debt when it was cheap now have to contend with interest payments on debt that is more expensive, and could get even more so,” the article adds.

“Up to 18 per cent of fixed-rate mortgages come up for renewal (this) year and borrowers looking to renew will be facing the highest interest rates in 20 years,” the article says, again quoting the TD Economics report.

“In the third quarter of (2022), a borrower who took out a $500,000 mortgage in 2017 was paying $700 more a month on renewal,” notes the TD report.

Well, one might think, it’s good that we all saved so much money during the pandemic’s lock-downiest days, right?

“One bright spot is the personal savings that Canadians accumulated during the pandemic, which could provide a cushion to rising debt costs. However, with interest rates expected to remain at higher levels over 2023, TD expects much of these savings will go to paying debt costs,” states the article.

If there is any positive news about higher interest rates, it’s the fact that Guaranteed Investment Certificates (GICs) are suddenly looking more attractive.

Writing in The Globe and Mail, noted columnist Rob Carrick asks why people are risking investment dollars in the volatile stock market when GICs and other fixed-income investments are offering interest rates close to five per cent.

“In the low-interest decades of the past, stocks were essential to reach your investing goals. But with 5-per-cent returns available from both bonds and GICs, how much do investors need stocks?” he asks.

It will be interesting to see, as we move along in 2023, whether more investors do begin to shift some of their investments towards less volatile fixed-income. Save with SPP can remember that crazy days of the late 1970s and early 1980s when interest rates were in the teens, and you could expect 18 per cent interest on a car loan. It doesn’t seem (today) like we are anywhere near those bad old days — thank heavens!

A balanced approach is usually a wise one when it comes for investing, and members of the Saskatchewan Pension Plan are aware of the “eggs in different baskets” nature of the SPP Balanced Fund. Looking at the asset mix of this fund, it appears that 40 per cent of investments are in Canadian, American and global equities, and the rest is in bonds, mortgages, private debt, short-term investments, real estate and infrastructure. Keep your retirement savings in balance, and check out SPP today!

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The Kids’ Money Book by Jamie Kyle McGillian is that long talked-about and much-needed resource for young people that’s designed to teach them everything they need to know about money.

It’s written in a breezy, clear, and kid-friendly way, with plenty of diagrams, quizzes and fun facts. Although the book is intended for U.S. kids it is still totally relevant for a Canadian audience.

McGillian beings by remarking how her own two daughters used to spend all their pocket money on “candy and costume jewellery,” but have now graduated to coffee, music and apps for their phones. “In the past decade, as my little spenders have grown into big spenders, the world of money has changed, thanks to technology,” she writes.

A study by U.S. investment bank Piper Jaffray found “teens spend more of their cash on food than anything else” at places like Starbucks, Chipotle, Chick-fil-A and Panera Bread. Clothing is next, at 20 per cent, with top brands being Nike, Forever 21, American Eagle and Ralph Lauren, the book notes.

After a look at the history of money from bartering all the way up to bitcoin, the book’s first quiz doles out some good advice, such as to “nurture you own interests in responsible ways, make solid decisions that reflect good judgement,” and to “put a price on fashion and ask yourself — is it worth it?” Other advice is being generous and charitable.

“Grown-ups who don’t learn money sense when they are young often learn the hard way,” the book advises. “Even if they do avoid big money mistakes, always worrying about paying bills and not having enough money to take care of the family are not fun. Learn to make smart money decisions and you’ll have a better chance of leading the kind of life that you want to,” writes McGillian.

And that’s what the book does. A chapter on the difference between wants and needs leads the reader to logical conclusions. “It’s all right to have a lot of wants, but the idea is to keep them in check,” she writes.

Later, we learn that folks with money smarts don’t give in “to the little voice in his or her head that screams `I want it now,’” and are happy with what they have (and not unhappy about what they don’t have). That’s because they “know how to make money work” for themselves, are “usually careful and precise with money” and aren’t wasteful, the book advises.

The section on allowances advises kids not to “spend every penny of your allowance. Leave at least a little for savings and sharing.” As well, the book advises young readers to “think about it carefully” before committing to a large purchase.

The book talks about ways younger folks can earn more money than just allowance, through babysitting, car washing, caring for pets, or creating arts and crafts. There’s a chapter on how to “increase your earning power” by boosting your casual conversation skills, selling yourself and your abilities, and keeping a sense of humour.

There’s a great, simple little chapter on budgeting — set aside money for school lunch, snacks, clothes, entertainment, “drugstore and miscellaneous spending,” and you can have money left over “for saving, sharing and investing.”

On shopping, the book advises young folks to be smart consumers. “Comparison shop. Judge different brands of products against each other. Talk to friends and relatives before you buy. Find out what brands they are most satisfied with. Research the product.”

The “Investing 101” chapter provides a nice overview of bonds, stocks, exchange-traded funds (ETFs) and more. The credit card section highlights the good and importantly, bad things about credit cards — annual fees, interest charges, and the ability “to start spending more than you can actually afford.”

This is an excellent book that helps deliver the medicine of basic financial literacy with the sugar sweetness of gentle writing, lots of graphics, fun quizzes and simple examples. Well done Ms McGillian!

The Saskatchewan Pension Plan is open to Canadians 18 and older (up to age 71). Check out our video, What is a Pension Plan? (link) on our home page for an overview of this made-in-Saskatchewan retirement savings success story. It’s never too early to start saving for retirement!

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StatsCan study finds retirement income rates better than expected

Writing for the Advisor’s Edge blog, James Langton reports that — after research by Statistics Canada — that “retirement has been turning out better than expected for many Canadians.”

StatsCan recently published data from a follow-up study from a group of retirees, who were first surveyed in 2014 with a follow up two years ago, the article notes.

The research found that “retirement has been comfortable financially for more people than expected,” the article reports.

In 2014, 67.5 per cent of respondents said “they expected their retirement income to be adequate, or more than adequate, to comfortably maintain their standard of living,” the article states.

Jump ahead to 2020, and “81.6 per cent found that their retirement income was sufficient to comfortably cover their living expenses,” the article adds.

The StatsCan study found a similar increase in satisfaction levels among both women and men, the article continues. In 2014, 68.5 per cent of men and 66.4 per cent of women “expected to have an adequate retirement income,” the article reports. But by 2020, those numbers jumped to 82.2 per cent of men and 81 per cent of women, the Advisor’s Edge article tells us.

Those with disabilities and with high school education or lower also saw improvements in their retirement income, the article concludes.

In 2014, the article reports, 72.4 per cent of those with a disability and 73.5 per cent of folks with high school educations or less said they had adequate retirement income. Those numbers jumped in 2020 by “17.1 and 23.2 percentage points, respectively,” the article concludes.

According to a post on the CHIP reverse mortgage site, “the average retirement income in Canada currently sits at $65,300 per year, per household (before tax). That works out at $32,650 per person, if the household includes a couple.”

It’s not stated in the Advisor’s Edge piece at what income threshold people become happy with their retirement income, but we can probably assume they are making the average amount or better.

Some of that $32.6K per person will come from government sources, such as the Canada Pension Plan, Old Age Security, or the Guaranteed Income Supplement. Traditionally, the rest of a person’s retirement income comes from two other sources — workplace pensions and personal savings.

Employers — are you offering a retirement program for your team? Did you know that the Saskatchewan Pension Plan can help you deliver a retirement savings program at your workplace? The scaleable SPP works for both large and small businesses, and relieves you of the heavy lifting of collecting and investing contributions and distributing statements and tax slips. Check out SPP today!

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