Can tech help us conquer our inability to save?

These days, Canadians share two unrelated traits – very few of us, the vast majority, aren’t savers. And as well, nearly all of us, a majority, have a smart phone.

Could one attribute help fix the other? Save with SPP had a look around to see if there are any money-saving apps out there, and whether people think they work.

According to Global News, a great app for those who love to clip coupons is Checkout 51. With this app, Global explains, you don’t present coupons at the cash. Instead, you scan your receipt using the app and get money back via cheque.

“After you purchase items on the list you photograph and upload your receipt via the app. The receipt gets checked and once approved (usually within 48 hours) the money you earned gets added to your account. Once you hit $20 a cheque is mailed out to you,” the article explains.

Global also recommends an app called Gas Buddy which tells you where the cheapest gas prices are in your area, using GPS.

Over at the Maple Money blog, among the apps recommended for us Canucks is Mint, which “helps you track your spending, and also alerts you to when you’ve spend too much (or if you get charged a fee for something). In addition to those things, Mint also offers a bunch of money saving tips to help you manage your money better,” the article states.

They also like Flipp which alerts you to flyers for your area after you enter your postal code.

The CBC likes a number of these apps, and also E-bates which is now known as Rakuten. With E-bates, the network notes, you are basically being paid to shop.” Every time you make a purchase through one of their verified vendors, E-bates will send you a cheque. That’s cash back on top of the regular sales your favorite stores are having – and bonus, the app rounds all the deals up for you as well. E-bates earns a commission every time you make a purchase through their website, and instead of keeping it, they pass it on to you,” the network suggests.

Save with SPP can’t vouch for any of these except for E-bates; we have used it for years and yes, when you accumulate enough savings they’ll send you a cheque. It’s sort of like using a cash back card. We will give some of these other ones a try.

Let’s face it – the cost of living never seems to go down, so any app that offers a chance to save you some cash is probably worth at least trying out.

That extra cash, money that you didn’t earn and is thus “free,” can be used for any number of good things. Saving for retirement seems near the top of the list – perhaps the newfound cash can find its way into your Saskatchewan Pension Plan account, where it will grow into future retirement income. And maybe it all starts with a few clicks on an app!

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

Aug 26: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

A new snag for retiring boomers – helping the kids buy a house

Troubles for the poor old boomers continue to mount.

Not only are they carrying more debt into retirement than ever before, prompting some to work longer than they planned, but they also want to help their kids. A new survey carried out by the Leger group for FP Canada finds that nearly half of boomers with kids under 18 intend to help them buy a home, even if it postpones their retirement.

The survey is covered in a recent Advisor’s Edge article. The Housing Affordability Survey found that “48 per cent of these parents intend to help their children buy a home, up from 43 per cent of parents surveyed in 2017,” Advisor’s Edge reports.

As well, 39 per cent of those surveyed “expect to postpone their retirement to help their kids buy a home,” which is up from 27 per cent two years ago, the article notes.

The reason for a delayed retirement may be that 30 per cent of respondents planned to dip into their retirement savings to help the kids, up from 21 per cent in 2017. As well, 26 per cent said they would tap into their own home equity to aid the children, up from 23 per cent a couple of years ago.

Thirty-four per cent, the article notes, report that “the financial strain of helping their children” is creating problems with their ability to pay down debt. That’s up from 22 per cent in 2017.

“Even though it’s natural to want to help your children, it’s essential to carefully consider the impact on your own financial security before helping with such a huge purchase,” Kelley Keehn, a consumer advocate for FP Canada, states in the article.

This is a great point. More and more retirees are finding that the biggest costs of retirement come near the end, when a growing number of seniors find they need long-term care in nursing homes, a cost that can be quite significant. You want to help the kids, sure, but you must avoid (if you can) the danger of leaving yourself short when you are too old to work, and your savings are beginning to dry up.

The takeaway from this is that our kids are facing a much more expensive life than we have experienced. Of course they will need some help. That’s a good reason to increase your own commitment to your retirement savings. If you have a little more income in retirement, why, you will have a little bit more to help the kids, right?

An easy way to prevent being short on cash in retirement is to join the Saskatchewan Pension Plan. The money you put away now, while you’re working, will grow into a future stream of income that will supplement whatever you get from government pensions, workplace retirement programs, equity, and so on. It’s a wise step to take!

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, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22

Is low unemployment actually a sign that boomers aren’t retiring?

Politicians all over the continent like to point to our low levels of unemployment as a sign that our economy is booming and recovering.  And perhaps it is. A recent Bloomberg article notes that the Canadian labour market has seen “a decade-low unemployment rate” and “some of the fastest job gains on record.”

That high level of employment, the article adds, boosted “the average weekly earnings for Canadian workers… 3.4 per cent in May from a year earlier, to $1,031.” There were a whopping 32,600 jobs added that month, Bloomberg reports, citing Statistic Canada figures.

Reading these positive numbers, one might include that things look great for our younger workers – low unemployment and a high level of job creation.

Not so fast, reports Livio Di Matteo of the Fraser Institute, writing in the National Post. Sure, the story notes, we can expect that “in coming years employment and the labour force in Canada will continue growing,” but it will be “at a diminished rate, with employment growing slightly faster than the labour force.”

And the reason why, Di Matteo explains, is that low unemployment rates are “due largely to our aging population and the expected decline in labour force participation rates. Overall labour force participation in Canada has declined over the past decade in Canada, but interestingly has grown among people aged 55 and older.” In plainer terms, there are more older people in the workforce than before, meaning those at or nearing retirement age are continuing to work.

Di Matteo suggests that there will be more opportunities for younger workers when boomers begin to fully retire. In 2016, “people aged 55 and over accounted for 36 per cent of Canada’s working age population,” Di Matteo notes, adding that this figure should rise to 40 per cent by 2026. When the boomer cohort finally begins to retire, Di Matteo predicts higher demand for younger workers in “healthcare, computer system design… support services for mining, oil and gas extraction, social assistance, legal, accounting… and entertainment,” among others.

It’s a similar story south of the border, reports Market Watch. There, unemployment is “at a half-century low,” but a reason why is that there aren’t as many new entrants in the job market, the report notes.

“The U.S. doesn’t need to create as many new jobs to absorb a slower growing population of working-age Americans. Economists figure the U.S. needs to add less than 80,000 new jobs a month to hold the unemployment rate near its remarkably low rate,” the article states.

Experts are split on whether boomers are working late into life because they want to or because they have to. Sure, many love the social contacts and engagement of working – or want to travel more now that they are semi-retired. But those still saving for retirement may not be hitting their savings targets.

A report from RBC, covered in Yahoo! Finance Canada, says those boomers with “investable assets” of $100,000 or more planned on saving $949,000 for retirement, and “are falling $275,000 short.” Those with less than $100,000 saved have lesser goals, but are much farther away from them, the report states.

It will be interesting to see how the trend towards boomers hanging on to their jobs plays out, as it ultimately must.

For those of us who are still slogging away in the workforce, all these stats underline the importance of directing some of your income towards long-term savings for retirement. An excellent tool for this purpose is the Saskatchewan Pension Plan, which offers a flexible way for your savings to be invested, grown, and ultimately paid out to you as a lifetime pension in the future. It may be better to pay into your own retirement now, rather than having to work later in life to fund it.

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

Aug 19: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

What if the boomer retirement wave is a trickle, rather than a tidal wave?

We all seem to feel pretty certain that any time now, an unprecedented wave of boomer retirements (some call it the silver tsunami) will wash ashore, overloading the system and causing all kinds of problems.

Financial author and MacDonald-Laurier Institute fellow Linda Nazareth isn’t so sure.

Writing in the Globe and Mail, she likens concerns about this upcoming boomer retirement wave to “almost an urban legend.”

She says many speculate that “shortages of workers will be the bane of every industry,” and “younger workers will finally (finally!!) get to experience what it’s like to be in a seller’s market. After all, every day that huge generation gets older they are collectively getting a day closer to the golf course and out of the office.”

However, there may be a few facts getting in the way of this great story, she writes. A recent study by the OECD, Nazareth notes, suggests “there are factors at play that will keep older workers in the workforce and that will go a long way toward offsetting the impact of population aging in most developed countries, including Canada.”

The OECD research noted, she writes, that many countries, including Canada, have done away with mandatory retirement ages. Getting rid of those old rules – here it used to be retirement by age 65 – led to a “10.9 percentage point increase in the labour force participation rate… of those between 55 and 74 between 2002 and 2019,” she explains.

The OECD, Nazareth explains, chalks up the increase in older workers to “rising life expectancy,” the fact that people are living (and thus working) longer, and “educational attainment,” the idea that better-educated workers can stay on the job longer.

So instead of a “silver tsunami,” Nazareth says the OECD data suggests that the number of older people in the workforce should actually begin to increase “by 3.4 percentage points through 2030 for the median (OECD) country.” Japan will see a startling 11.5 per cent increase in older workers by 2030, at the lower end, Germany will see a fall of 2.5 per cent in the same timeframe.  Canada should see the older worker participation rate dip by 1.7 per cent by 2030.

Nazareth concludes from the OECD data that the long-expected explosion of boomer retirements is being delayed by “longer lifespans… and higher education levels.” Another factor, she explains, is that while older folks may be working longer, they may tend to be doing so “on contracts or in part-time jobs.” Nonetheless, she concludes, “the rush to the golf greens may be a little slower than expected.”

These conclusions sure seem to line up with what those of us of a certain age – let’s say 60 – are seeing. Those of us with good workplace pensions are leaving or planning to leave the workplace, those without intend to keep working. Many are working or consulting into their 70s.

One great way to ease the transition from working to not working is to augment any workplace pension you may receive with personal savings. A great place to park your hard-earned retirement dollars is the Saskatchewan Pension Plan, which offers professional, low-cost investing, an enviable track record of growth, and best of all, many options at retirement to turn your savings into lifetime income. Be sure to click on over to check them out!

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22

Thrift stores – looking sharp while spending much less!

We’ve seen, time and time again, that the best way to save money is to spend less than you earn.  Sounds easy, but in practice, it can be difficult. That’s where thrift stores can become handy.

At the Debt.com blog, shopping for clothes at thrift stores is discussed, and a few tips are offered. First, the blog notes, “look for new clothing” at the thrift store – clothes that often still have tags on them and have never been worn. Often, the blog says, people donate clothes that don’t fit, or were gifts they didn’t like. “After some practice,” the blog advises, “it is easy to spot the never-washed creases of new clothing.”

Other tips? The blog advises that you “take your time” and check the clothing racks thoroughly. “You’ll need to spend some time pushing hangers around while searching for quality stuff,” the blog notes, adding that you need to separate “the wheat from the chaff” to find gently-used, well-cared-for clothing.

Other tips from the blog – don’t “settle” for something just because it’s cheap, focus on getting high quality only. Take note of which thrift stores offer the best stuff, and frequent those ones more.

You can, reports the Budget 101 blog, go even farther than just clothes or home furnishings. Some people are finding that a thrift store-backed wedding can save you a fortune on the cost of your big day.  “Recycling, re-purposing and some creative thinking will go a long way to cultivating a wedding experience you will be proud to share with your loved ones, and something to feel good about for years to come. What a great way to start a life together,” the blog states.

How would such a wedding look? Many wedding dresses are donated after they have been used, and are of course lightly worn. “Why purchase a brand-new dress that will serve you for just one day when you could use that money traveling and making memories on your honeymoon or purchase some new furniture,” the blog asks. A used wedding dress can be had for a tiny fraction of the thousands to tens of thousands a new one costs, the blog adds.  Other “thrifty” ideas include getting some used vases or mason jars to help with flowers or centerpieces, the blog notes.

In an article on decluttering, the Vancouver Sun notes that having “donate” and “sell” bins in your home, with donations going to your local thrift shop, is a great way to create more room in your existing space – always less expensive than moving. The decluttering “craze” in North America has actually created “an uptick” in donations to thrift shops, the article notes.

One of our family’s little savings maxims is this – you can avoid paying the full price for something by getting it on sale, getting it used, or getting it free (donated to you). Thrift stores are great, since you never know what you’re going to find on offer. It’s the only store you go to where you don’t really know what you might buy. But over the years we’ve found deals on golf clubs, tools, clothes, furniture, small appliances, dishes – the list goes on and on.

When you blast out of the bunker with a $4 sand wedge, your pleasure is doubled!

When you blast out of the bunker with a $4 sand wedge, your pleasure is doubled! And it frees up money for retirement savings – check out the Saskatchewan Pension Plan to see how your savings can be put to work for you.

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

Aug 12: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

Data expert proposes boosting CPP payouts, given lack of pensions in the workplace

Writing in the Journal Pioneer, columnist Don Mills reveals a surprising fact – the current maximum payout for the CPP is well below the poverty level.

Mills begins his op-ed piece by noting that increased life expectancy leads to a question – are Prince Edward Islanders “financially prepared for retirement?”

He then observes that only 34 per cent of the workforce in Canada “has employer-sponsored pensions,” with that number dropping to 30 per cent in his native PEI.

“The rest of Canadians must save for retirement or depend on the Canada Pension Plan (CPP) and/or Old Age Security (OAS). While CPP is healthy in terms of sustainability at current payouts, it’s only available to those who have contributed to the plan – and maxes out at $1,100 per month. Without other resources, those relying on CPP and/or OAS are facing a life of poverty or a significantly diminished standard of living,” writes Mills.

He notes that the general “rule of thumb” for retirement is that you should have income that equals 70 per cent of what you made at work. “If a household’s income leading up to retirement was $100,000 per year with two incomes, $70,000 is needed after retirement to maintain current standards,” he explains in the piece. But given the relatively modest payout of CPP, Mills notes that “a two-income household with no other retirement savings would receive less than $30,000 from CPP and have a $40,000 shortfall to maintain previous standards of living.”

He notes that while defined benefit pension plans are still common in the public sector – the type of plan that provides “guaranteed payouts that increase with inflation,” only large private sector companies have such plans. The rest, he says, have defined contribution plans which don’t guarantee a set payout (the amount contributed is what is defined, not the payout), if they have any plan at all.

“Few small- or medium-sized companies have the capacity to fund pension plans for employees – meaning only 25 per cent of those who work in the private sector have a pension. The percentage with a defined benefit (inflation protected) plan has decreased from 61 per cent to 40 per cent in the past 10 years,” he explains.

Mills says that the government needs to take steps to ensure that those without indexed DB plans also get some income guarantees in retirement.

“The federal government must commit to substantially increasing CPP payouts by committing tax revenue to this purpose, the same way taxpayers help fund public sector pensions. This includes increasing the contributions by those working and from the federal government by allocating more taxpayer money for that purpose to the CPP and OAS. At minimum, the government should guarantee a retirement income at least above the poverty line in Canada – currently $20k for an individual and $28k for a couple in P.E.I., where 10 per cent of residents currently live below the poverty line, according to the latest census,” he writes.

Mills’ column underscores the little-known fact that benefits from CPP and OAS are modest – and that if that’s all you have to live on when you retire, it is going to be tough sledding. There is also the Guaranteed Income Supplement for low-income earners which helps those without savings or workplace pensions.

Mills is correct – more and more people lack a workplace pension and must depend on CPP and OAS, which were never really designed to be the main source of retirement income, but were considered supplemental income. When these programs were launched in the 1960s, most workplaces offered pensions; as Mills notes, nearly two-thirds of workers don’t have such coverage today. This is a problem that could lead to future senior poverty.

If you don’t have a workplace pension, or want to supplement it on your own, an excellent do-it-yourself product is available through the Saskatchewan Pension Plan. You decide how much you want to contribute, and they’ll invest it for you – efficiently and at a low cost – so that your savings grow as you approach retirement. Then, they have a wide array of options for you to convert those 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, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22

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

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

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

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

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

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

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

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

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

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

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

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

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

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Why people aren’t saving – an interview with Doug Hoyes

As co-founder of Hoyes and Michalos, a debt relief firm, and a commentator on personal finance, Doug Hoyes has seen it all when it comes to debt.

And he has a straightforward view on why Canadians aren’t saving much for retirement, telling Save with SPP that these days, “people don’t save for anything.”

The savings rate, he notes, was as high as 15 per cent in 1980 and has plunged to “less than one per cent” today. In other words, people are saving less than a penny of every dollar they earn.

“People don’t save anything; it’s just not a thing we do anymore,” he explains. “I think the cost of living is high and job security is low.” The old “job for life” days are long gone, and people now expect to have multiple jobs through their working career, he explains.

“You are seeing sporadic employment, contract work – it is hard for people to put down roots and save. And house prices are rising sharply, and everything costs more. We’re not able to save, and we are seeing more people using debt to make ends meet,” he says.

Those who do try to save tend to be punished for their efforts – savings account and GICs pay interest in the low single digits, and if savers look to invest in mutual funds “there are high fees, and they take on risk,” he explains. Since low-interest lines of credit are so prevalent, for many people, debt has replaced savings, a practice that Hoyes says just isn’t sustainable in the long term.

Save with SPP asked how this lack of saving affects retirement plans.

“It’s become uncommon to have a pension plan (a traditional defined benefit plan) at work,” he says, “unless you work for the government. It’s just not a thing newer companies offer.” He says that from an employer’s point of view, “it is a hassle to set them up, and there is a potential for liabilities that need to be funded, and more money needing to be put in.” Sears and Nortel show the potential downside for employees and DB pensioners if the parent company runs into financial trouble, he notes.

So traditional pension plans in the private sector have generally been replaced with things “like a group RRSP, where there is zero risk (for the employer).” Employees are satisfied with a group RRSP because they “know they are not going to be there, at the same employer, for 50 years,” and a group RRSP is portable and easy to transfer, Hoyes explains.

With more and more working people dealing with debt, it’s not surprising to Hoyes that more seniors are retiring with debt, a situation he says can lead to disaster.

“In retirement, your income goes down, and while some of your expenses that were related to work go down, others will go up,” he explains. “Your rent doesn’t go down when you retire, so your cost of living is about the same.”

Retired seniors, living on less and still paying down debt, face other problems, he says. It’s more common for retirees to divert savings to “helping their adult kids.” Examples of this might include a divorced child moving home, or college and university graduates, unable to find work, staying home instead of moving out. So the seniors may use up their savings or borrow to help the children, “as any parent might,” but that drives them into a financial crisis, he explains.

With debt to pay and possibly little to no workplace pension, many seniors are heading back to work. Others, Hoyes notes, are starting to have to file for insolvency.

“Maybe you only have CPP and OAS coming in, and you have a $50,000 debt that you can’t service – you may need to file for bankruptcy and make payments through a trustee,” he explains.

We thank Doug Hoyes for speaking to Save with SPP.

If you don’t have a pension plan at work, consider opening a Saskatchewan Pension Plan account. It’s like setting up a personal pension plan. The money you set aside is invested for you at a low fee, and when you are ready to collect it, it’s available as a lifetime pension with several survivor benefit options.

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

Jul 29: Best from the blogosphere

A look at the best of the Internet, from an SPP point of view

Half of retirees plan to bring debt into retirement – those with written plans remain optimistic

Half – 46 per cent, to be exact – of Canadian pre-retirees expect to “have long-term IOUs heading into retirement,” but those with a written retirement plan are still optimistic about life in retirement, new research finds.

Fidelity Investments Canada ULC put together this research in their annual study, called Retirement 20/20, according to a recent media release.

“For Canadians, the path to retirement is becoming more complex. With higher debt loads and longer than ever life expectancy, those approaching retirement must think critically, plan ahead and take action today,” states Michelle Munro, Director, Tax and Retirement Research, in the release. “Our latest research findings show that working with a professional financial advisor and putting a plan on paper is the best way to navigate this new environment.”

The study found that 87 per cent of those surveyed who had a written retirement plan were optimistic things would be fine in retirement – for those without such a plan, 42 per cent had a negative outlook about retirement, the release notes.

Other key findings from the research:

  • About three in four of those surveyed (70 per cent) say they believe they will be working in retirement
  • More retirees (34 per cent) are working to keep mentally and physically active
  • Those with a written retirement plan feel better prepared “emotionally, socially and physically” for retirement

Save with SPP used a written plan to prepare for retirement. It certainly helped cement the choice of when to leave full-time work behind. The key things were to note all sources of retirement income (income at the start, and then later, government programs and so on) and at the same time, to note all expenses. Five years later, this plan is still working, and of course there have been unexpected expenses that messed up the plan occasionally. But the ship is still sailing on course.

One of our friends actually prepared for retirement by figuring out what the retirement income was and then living on it – in practice mode – for a few months prior to the big day. That took all the surprises out of it for he and his spouse. Clever.

12 great things about retirement

Many of us (certainly this writer) obsess about the financial side of retirement, but there’s a lot of other less tangible aspects about it that we must not lose sight of.

US News and World Report lists a dozen great things about retirement, including “newfound freedom,” being able to “quit the rat race,” catching up on all the movies you didn’t have time to see, being able to work if you like (but not work if you don’t like), time with kids and grandbabies, volunteering, and time for travel.

You can’t put a dollar value on these things – in a sense, the time to do what you wish is priceless. So no matter how the finances work out, you’ll still benefit from being away from the office on permanent hiatus.

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, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22