By Sheryl Smolkin

It’s registered retirement savings plan season again and media ads from financial institutions encouraging you to open a plan and invest in their products are running 24/7. But you are really not sure whether you should opt to save your hard-earned money in the Saskatchewan Pension Plan, an RRSP or a tax-free savings plan.

There is not a single answer that will meet the needs of every individual or their family. You may opt to split your savings among the three types of plans in order to meet different savings objectives. But the fact is that SPP is the ONLY one of these three types of registered plans that has a single purpose:

“To help you save money exclusively for retirement.“

You can withdraw money from your RRSP and pay the taxes in your year of withdrawal, but when you do take money out, that contribution room is totally lost to you. You can also take money out of your TFSA and your contribution room is restored the following year. However, every time you withdraw money you interrupt the tax-free growth of your contributions plus investment earnings.

SPP is a locked-in pension plan which means your account must stay with the Plan until you are at least 55 years old. In the event of your death, the money in your account will be paid to your beneficiary. Within six months of joining SPP, you can withdraw your contributions if you decide that you do not wish to participate in the Plan. After six months, the funds are locked in.

SPP follows the same income tax rules as an RRSP except that SPP is locked in. Under tax rules contributions to SPP can be used as repayments to the Home Buyers Plan (HBP) and the Lifelong Learning Plan (LLP). However SPP withdrawals are not permitted for this purpose. A taxpayer can designate all or part of the contribution as a repayment on Schedule 7 and file it with their tax return. SPP does not track repayments to the HBP.

The plan is designed to be very flexible and to accommodate your individual financial circumstances. Even contributing $10 per month will build your SPP account and provide you with additional pension at retirement. The maximum contribution is $2,500 per year subject to available RRSP room and there is no minimum contribution.

Transfers into SPP from RRSPs and unlocked RPPs of up to $10,000 a year are also allowed and spousal contributions are permitted. Contributions you make to a spouse or common-law partner’s account reduce your RRSP deduction limit. The total amount you can deduct for a given tax year cannot be more than your RRSP deduction limit. Contribution and PAC forms have a section to designate contributions for spousal deduction.

Between the ages of 55 and 71 when you opt to retire, one of the options available is to transfer to the amount in your SPP account to either a Prescribed Registered Retirement Income Fund (PRRIF) or a Locked-in Retirement account (LIRA) with another financial institution.

You can also select an annuity option. The amount of your monthly payment will depend on which annuity option you choose, your age at retirement, your account balance, and the interest and annuity rates in effect when you retire. SPP can provide a personal pension estimate for you if you call the toll-free line at 1-800-667-7153.

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It’s been six years since I started working with SPP and wrote my first article about the plan. I joined SPP and have transferred $10,000 in every year since. According to my June 2016 statement I had $80,140.74 in my account. By the time I am 71, I hope to have a total of about $150,000 in the plan. I like the low fees (1% a year or less) and that my money is professionally managed.

In five years I intend to purchase a joint and survivor annuity to provide a guaranteed monthly payment for my husband’s and my lifetime. This stream of income will provide further income security as we age in addition to our other pension income.

We also have other registered and unregistered savings which we can use for a variety of purposes including funding an estate for our children. But I’m pleased that that over a 30 year period the average SPP balanced fund return has been 8.10% and as of the end of November 2016, balanced fund YTD returns were 5.29%.

If you want to fund a pension that will be there when you need it most, check out SPP or top up your SPP savings. Then allocate the balance of your savings for next year to other available accounts.

You will be glad you did. After all, no one wants to put all their eggs in one basket!

By Sheryl Smolkin

With Brexit, the election of Donald Trump and the stock market’s long bull run in 2016, the big question everyone is asking is what is in store for the Canadian economy in 2017?

Well, it depends who you ask and on what day. Here are a few recent predictions in the mainstream media, which may or may not pan out. You be the judge.

Not surprisingly, there’s one risk that “Trumps” them all for Canada’s economy in 2017, said Royal Bank Chief Economist Craig Wright in early January at the Economic Outlook 2017 event in Toronto.

The impact of U.S. growth on Canada depends on the policies that are put in place across the border under President-elect Donald Trump, but at a minimum Wright noted the U.S. is headed in a more competitive direction, while Canada seems to be moving the other way. “So it’s not yet clear whether Canada will see a ‘Trump bump’ or perhaps a ‘Trump slump,'” he told iPolitic reporter Ainslie Cruickshank.

The Financial Post reports that the best loonie forecaster in the world believes the Canadian dollar will beat all its G10 peers this year. The loonie will nudge an additional 0.75 per cent higher to 75.75 US cents by the end of the year, according to Konrad Bialas, chief economist at Warsaw-based foreign-exchange broker Dom Maklerski TMS Brokers SA, who topped a Bloomberg ranking of Canadian dollar forecasters in the fourth quarter. That would extend the loonie’s three percent gain from last year, which made it the best performer among its Group-of-10 peers.

In the Globe and Mail economist Todd Hirsch makes a series of bold (and some not-so-bold) predictions for Canada’s economy in 2017 and beyond. For example:

1. Canada-U.S. trade disputes will intensify.
2. The Canadian dollar will dip below 70 cents early in the year, but finish 2017 at 78 cents.
3. The Keystone XL pipeline will get Washington’s approval.
4. And for sports fans, Montreal will win the Stanley Cup; University of Calgary Dinos will win the Vanier Cup; and, the Winnipeg Blue Bombers will win the Grey Cup.

On CBC News, Paul Evans offers the following  five reasons why Canada’s economy is looking up in 2017.

1. The job market is recovering.
2. Oil could be headed higher – finally.
3. Despite of predictions to the contrary, the loonie could be headed higher.
4. Trade is picking up.
5. The TSX is near an all-time high.

Nevertheless, analysis from the Centre for Economics and Business Research (a UK think tank), published in co-operation with Global Construction Perspectives says Canadawill have the world’s 10th largest economy in 2017, but will be overtaken in a few years by South Korea.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

Today I’m interviewing Alexander Fung for savewithspp.com. In 2015 Alexander graduated from the Goodman School of Business at Brock University where he studied corporate and personal finance. He has worked as an analyst at Scotiabank and Fidelity Investments Canada. But first and foremost, he is an entrepreneur and app developer whose mission in life is to help parents raise money smart kids.

His app Dollarwise was awarded third place at the Canadian Personal Finance Conference and second place at the International Payment Conference, both held in Toronto.

Thanks for talking to me today Alexander.

Hi, Sheryl, thanks a lot for having me.

Q: You participated in The Founders Institute Program from January to June 2016. Can you tell me about the program and what you learned?
A: The Founder Institute is the world’s largest pre-seed accelerator in the world based in Silicon Valley. The purpose is to validate business ideas and then actually launch a product that helps provide some value to users. I was one of 17 people who graduated in the Toronto cohort out of about 65 companies that entered.

Q: Why do you think that parents often don’t teach their children good money habits?
A: Honestly, it’s a bit of a taboo topic. I know that as I was growing up my mom and dad hardly ever talked to me about money. Theythink kids should just be focused on school and that’s it, but in reality money is crucial in every person’s life – whether you’re saving for a wedding, saving for a vacation or buying presents for parents and family members. Money is such an essential subject to understand.

Q: Why did you decide to develop a tool to help parents and their children improve financial literacy?
A: When I was eight years old. I decided to use my cash allowances to buy myself a video game without my parents’ permission. When they found out, they were absolutely furious. What I learned from that experience was that I made an irrational decision and I should’ve talked to them about it before making the purchase. So, that event really motivated me to study finance and work in the industry.

Q: Let’s say traditionally parents give kids a cash allowance, and require that the money be used in a specific way, i.e. 25% for charity; 50% for expenses like bus fares and lunches; and 25% for fun. In your view, why isn’t this simple approach good enough?
A. The problem with a cash allowance is that it’s really hard to track. For example, a parent says, “Hey John you can’t spend more than $20 on transportation.” But the kid might not comply and parents can’t keep them accountable.

Also, when you use cash allowance sometimes kids lose the money and it’s gone. When it’s misplaced, it’s gone forever really. Whereas if you use a debit card and you lose it, you can call your bank and they can lock it and your money is safe. So it’s that accountability and keeping track of kids’ behaviors that money can’t really provide.

Q: Tell me about Dollarwise and how exactly it works.
A: Dollarwise helps parents to teach their kids good money habits using a debit card and a mobile app. But unlike a traditional bank we want to make it fun and educational. We’re in discussions right now with institutions that have parents and families as clients and/or members, and we want to help them to provide more value to their clients.

Q: But how does Dollarwise itself work? What does it do?
A: It’s an application where parents are able to set up their assigned list of chores for kids to complete, and they can assign dollar values. When the kids open the app they see the list, they can complete tasks, and when their parents verify that the job’s well done, the money can be transferred into the child’s account. The application also allows children to set saving and spending goals for themselves, see where their money goes and see rules established by their parents.

Q: What’s the value proposition for families?
A: Parents are able to save time, build better relationships, and avoid costly mistakes that the kids may make. When I was growing up I got a cash allowance at infrequent intervals and I usually spent it right away.

Q: So let me get this straight then. The parents can enter data about how much they are going to pay for tasks assigned to the child and  how money can be spent. Then the child can go into the same app, and see what their parents want them to do and check off a task once they have done it. Is that correct?
A: Yes. And when the task has been properly completed the real money actually goes into the child’s bank account from the parents’ account.

Q: What’s the value proposition for financial institutions here?
A: We believe Dollarwise will help institutions attract and retain clients at a lower cost.

Q: How does the program help both children and their parents set goals and track how the child spends money?
A:  Let’s say John sees a pair of shoes that he wants at Footlocker, but he doesn’t have enough money. Typically what he would do is keep nagging his parents until they give him money to buy his shoes. Or he can set a goal using the Dollarwise application that records what he is saving for, how much it will cost and how much he is planning to save each week. And his parents are able to open the application to see his goals and monitor how he is doing.

Q: You’ve noted on the website that the children are recognized for having good and consistent behavior with your unique badge and star system. How does that work?
A: Parents can customize some of the badges the app will award based on their children’s individual goals and achievements.

Q: What kind of tools does each child require to use the app?
A: Actually all they need is a debit card. They don’t necessarily need a phone. When they get home they can always log on to the computer or their iPad to see their progress. But parents  usually have phones so they can set the goals, set restrictions and send money to their kids’ accounts.

Q: What kind of debit card are they going to get? Will they get a debit card from a specific financial institution?
A: Absolutely. The original plan was to issue our own debit card, but we learned it is too expensive and doesn’t make economic sense. Institutions will just issue their own debit cards to the kids and to the parents.

Q: Have you tested the program with parents and kids? How do they react?
A: Within six months we’ve tested our app on over 300 parents and kids. After our fourth revision feedback has been a lot more positive. They absolutely love it. Some parents told me that their kids have  asked them if they could do additional chores around the house so they can earn more money to save and buy something they actually want instead of begging their parents for more money  to buy stuff.

Q: If a parent wanted to purchase a program today where could they buy it?
A: Right now we are in the testing phase. If they wanted to sign up they could go to our website at Dollarwise.co and just hit the “subscribe button,” give us their name and email, and someone on our team will follow-up with them.

Q: But if you don’t actually have a relationship with a financial institution yet, how can you issue debit cards?
A: Right now we’re testing the prototype. So they can’t use the application right now, but they get the prototype and they can see how it looks and how it feels.

Q: How much are you going to charge parents?
A: It will be free for parents and kids. Financial institutions will pay us for a white label version of the app to which their own branding can be added.

Well, that sounds really interesting. I wish you luck. Thanks for talking to me today, Andrew.

Thank you so much Sheryl.
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This is an edited transcript of a podcast interview recorded in December 2016.

By Sheryl Smolkin

Fireworks on Parliament Hill and across the country ushered in Canada’s sesquicentennial or 150^th birthday. I’ll never forget babysitting on New Year’s Eve in 1967 and hearing Gordon Lightfoot’s Canadian Railroad Trilogy for the first time. It’s still one of my favourites!

As our contribution to Canada’s big birthday, in this space we will continue to direct you to the best from Canadian personal finance bloggers from coast to coast with an occasional foray south of the border. We hope you will let us know what you like and what we may have missed.

Recently Ed Rempel addressed the perennial question, Should I Delay CPP & OAS Until Age 70? and included some real life examples. While he illustrates that many Canadians can benefit from waiting until age 70 to start their government benefits, he agrees that if you are retired at 65 and have little income other than these two government pensions, you may have no option.

Barry Choi on “Money We Have Have” explores 5 differences between cheap and frugal people. He thinks calling a frugal person cheap is pretty insulting. “Frugal people understand the value of money and are willing to pay when it counts,” Choi says. “On the other hand, cheap people are only looking for ways to save money regardless of how it’s done.”

With credit card bills that reflect holiday excesses hitting mailboxes this month, many of us are looking for ways to save money. Canadian Finance Blog’s Tom Drake breaks down ways to save money both monthly and annually.

Think about your energy use and your water use to figure out ways to save money on your electricity bill, gas bill and water bill. Two other services that have many opportunities to cut back include the cable bill and cell phone bill.

“Reducing these five bills could easily save you over $100 a month, or more than $1,000 in a year. That’s not too shabby at all,” he notes.

For Alyssa Davies at “Mixed Up Money” an emergency fund (which she calls money to protect your other money) of three months pay is not enough. She has another account called her “comfy couch” for the months she overspends or under-saves.

When Davies wrote the blog she only had $583 in her comfy couch account but that small amount was all it took to make her feel comfortable. She says, “Whenever I need to use some of that money, I simply take it out, and replace the amount the next time I have available funds to do so. If you’re anything like me, you will want to find a magic number that allows you to breath without feeling like a giant horse is sitting on your chest.”

And finally, Retireby40 says he had a terrific 2016 and achieved 9 out of 11 goals. His approach for setting New Years goals is to set achievable objectives; make the goals specific and measurable; and, write them down so he can track his progress. Several of his goals for 2017 include increasing blog income to $36k, redesigning the blog and save $50,000 in tax-advantaged accounts.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

According to a recent TD survey, more than two-thirds of Canadians between the ages of 35 and 54 say they’re not saving enough for retirement, and one in four say not being ready for retirement is keeping them up at night. As a result, the majority of Gen-X Canadians (60%) who aren’t saving enough do not expect to be able to retire on time and half as many (29%) expect to still be working in some capacity during retirement.

The top barrier preventing Gen-Xers from retiring on time is everyday financial demands like living expenses, mortgage or rent, and childcare costs (61%), followed by existing debt (42%) and major unexpected life events such as divorce or death of a spouse (19%). Given these challenges, it’s not surprising that more than half (54%) of Gen-X Canadians surveyed say they need help meeting their financial goals, with a majority feeling guilty about not saving enough for retirement and wishing they had started earlier.

If you have fallen behind in saving for retirement, here are some ways you can get on track to achieving your savings goals and become retirement-ready.

Track your spending
More than three in five (61%) Gen-Xers attribute everyday financial demands as the reason they don’t expect to retire on time. Keeping a record of your spending is a simple way to see where your money goes each month and look for ways to cut back on expenses to free up funds and help boost your savings.

Once you’ve identified some monthly savings, consider arranging for those funds to be transferred automatically into Saskatchewan Pension Plan, a Retirement Savings Plan (RSP) or Tax-Free Savings Account (TFSA). As you identify even more savings over time, you can increase the amount transferred automatically each month. Remember to also factor in any additional money you receive throughout the year such as annual raises or bonuses.

Tackle your debt while also saving
Four in ten (42%) Gen-Xers attribute existing debt as a top reason that prevents them from retiring on time. While everyone’s financial picture is different, there are a few key steps you can take immediately to help pay down debt while building up savings:

• As you start tracking your spending and becoming more in control of your finances, take a look at where your money is going and determine where you can free up cash flow to go towards paying down debt.
• Seek out groups and communities – either online or in your neighbourhood – where you can sell stuff you no longer use or need, and use those funds to pay down your debt. One person’s junk is another person’s treasure.
• Look for tips and tools online, like this Debt Repayment Calculator, to help you become organized by determining how much you owe and prioritizing what to tackle first. You can stay on top of your debt more easily when you have a repayment plan.

According to the survey, of Gen-Xers who are already saving for the future, the majority (64%) rely on RSPs to help fund their retirement. If you have RSP savings room, this video will show you how easy it is to join the Saskatchewan Pension Plan. SPP is an easy, flexible, cost-effective way that any Canadian over age 18 can save $2,500/year. You can also transfer an additional $10,000 a year into your SPP account from another RSP.

By Sheryl Smolkin

Several years ago Globe & Mail columnist Tim Cestnick listed what he considers to be the top five opportunities for anyone looking to get their financial house in order:

• Create a pension
• Own a home
• Pay down debt
• Start a business
• Stay married

So I decided to ask 10 money writers to share their top personal finance New Year’s resolution with me, in the hope that it will encourage readers to establish and meet their own lofty goals in 2017.

Here, in alphabetical order, is what they told me:

1. Jordann Brown: My Alternate Life
   I’m still in the process of ironing out my New Year’s resolutions but here is one I’m definitely going to stick to. I plan to save $10,000 towards replacing my vehicle. It’s always been a dream of mine to buy a car with cash and as my car ages it has become apparent that I need to start focusing on this goal. I never want to have a car payment again, and that means I need to start saving today!
2. Sean Cooper: Sean Cooper Writer
   I  paid off my mortgage in just three years by age 30. My top personal finance New Year’s resolution is to ensure that my upcoming book, Burn Your Mortgage, reaches best-seller status. A lot of millennials feel like home ownership is out of reach. After reading my book, I want to them to believe buying a home is still achievable.
3. Jonathan Chevreau Financial Independence Hub
   My top New Year’s Resolution, financially speaking, is to make a 2017 contribution to our family’s Tax-free Savings Accounts (TFSAs). This can be done January 1st, even if you have little cash.  Assuming you do have some non-registered investments that are roughly close to their book value, these can be transferred “in kind”, effectively transforming taxable investments into tax-free investments.
4. Tom Drake Canadian Finance Blog
   My New Year’s resolution for 2017 is to increase my income through my home business. But this can be done rather easily by anyone through side-gigs and part-time jobs. While saving money by cutting expenses can be helpful, you’ll hit limits on how much you can cut. However, if you aim to find new sources of income in 2017, the possible earnings are limitless!
5. Jessica Moorhouse Jessica Moorhouse.com
   My personal finance New Year’s resolution is to track my spending, collecting every receipt and noting every transaction down, for at least 3 months. Doing this really helps me stay on track financially, but for me it’s definitely something that’s easier said than done!
6. Sandi Martin Spring Personal Finance
   I don’t expect much to change in our financial lives over the next year. I hope to avoid the temptation to build a new system because the boring old things we’re already doing aren’t dramatic enough. I’m prone to thinking that “doing something” is the same as “achieving something”, and I’m going to keep fighting that tendency as 2017 rolls by.
7. Ellen Roseman Toronto Star Consumer Columnist
   My personal finance resolution for 2017 is to organize my paperwork, shred what I don’t need and file the rest. I also want to list the financial service suppliers I deal with, so that someone else can step into my shoes if I’m not around. It’s something I want to do every year, but now I finally have the time and motivation to tackle it.
8. Mark Seed My Own Advisor
   I actually have three New Year’s resolutions to share:
   • Eat healthier.  We know our health is our most important asset.
   • Continue to save at least 20% of our net income. We know a high savings rate is our key to financial health.
   • After paying ourselves first, simply enjoy the money that is leftover. Life is for the living.
9. Stephen Weyman HowToSaveMoney.ca
   For 2017 I’m looking to really “settle down” and put down roots in a community. I believe this will have all kinds of family, health, and financial benefits. The time savings alone from being able to better develop daily routines will allow me to free up time to focus more on saving money, growing my business, and better preparing for a sound financial future.
10. Allen Whitton Canadian Personal Finance Blog
    I resolve to keep a much closer tab on my investments and my expenses, while planning to retire in four years. I have a pension, I have RRSPs, but I still have too large a debt load. Not sure this is possible, but I will try!”

By Sheryl Smolkin

The December holiday season is much anticipated by all as a glimmer of light and warmth at the darkest, coldest time of the year. It can also be exhausting, mentally challenging and play havoc with healthy habits like exercising and eating properly you have so carefully cultivated throughout the year.

Flu shot

The first thing you can do to promote your family’s health in anticipation of all the mixing and mingling is to arrange for everyone to get a flu shot. The flu vaccine is free and offered to Saskatchewan residents who are six months and older.

For detailed information about flu clinic locations, dates and times:

• Check your health region website;
• Call your public health office; or
• Call HealthLine 811.

For a list of pharmacies that offer the flu shot, check the Pharmacy Association of Saskatchewan website.

Safe driving

Also, driving can be particularly challenging in unpredictable Canadian weather. Stay safe by getting a tune-up and having your snow tires installed sooner, rather than later. Make sure all passenger seat belts are fastened and never, ever drink and drive. If you do plan to partake of alcoholic beverages, make sure you have a designated driver in your group, plus money or a credit card for a taxi.

Exercise

With days and nights that are chock full of activities, it’s often almost impossible to fit in regular exercise. If you are visiting out-of town relatives and planning to stay in a hotel, before you book a room, check the website to see if the accommodations you are considering has a gym or swimming pool. Early in the day or after the kids are asleep, you and your partner can take turns using the facilities.

In the event that you are bunking in with friends or family, check the holiday hours at local gyms and invest in a guest pass. Then if all else fails, be as active as possible. Explore the neighbourhood by walking your own or your host’s dog several times a day. After the first snowfall, ski, skate, make a snow fort or toboggan with your kids.

Managing stress

In addition, do whatever else it takes to minimize stress. For example:

• Don’t be afraid to say no or cancel if one more events during Christmas week will put you over the edge.
• Suggest that family members pick names so you have to shop for fewer gifts and can put more thought into each item you buy.
• Shop online, particularly if you are sending gifts to people out of town. Companies like Amazon and Chapters deliver and for a few extra dollars they will wrap your present and enclose a card.
• Try to maintain a normal bedtime routine for young children to minimize meltdowns. Make sure they have lots of opportunities for active play with children of similar ages.
• Let it go. Your brother-in-law may tell the same stories on every holiday and your mother-in-law may constantly question your parenting skills. But if you take a deep breath and remember it will all be over soon for another year, you may be able to avoid a serious family rift that takes a much longer time to heal.

Careful eating

Last but not least, think about what you eat. No I don’t mean you should completely forgo shortbread, chocolate, pie or eggnog. Try to taste, instead of finishing everything put in front of you. Eat one butter tart instead of two. Start with veggies and dip when you first arrive at a party to take the edge off your hunger. Pass up seconds on turkey and stuffing, Drink soda instead of high calorie pop or punch.

Besides, someone once told me there are no calories if you didn’t make or order the food and if you break a cookie in half all the calories will leak out. And even if I got it wrong, January is right around the corner. It’s a much better month to start a diet or a brand new fitness program. After all, fitness clubs depend on “resolutionists” like me to stay in business!

 

By Sheryl Smolkin

I have just returned from a three week odyssey to Australia and New Zealand, so there is a significant backlog of stories from both old favourites and newer bloggers to share with you.

Sean Cooper is anxiously awaiting the release of his first book Burn Your Mortgage. He made headlines around the world when he paid off his mortgage at 30 on a house he bought just three years before. In a recent blog he says that in spite of inflated home prices particularly in Toronto and Vancouver, the home ownership dream is still alive and well. However it is taking twice as long to save for a house because we are buying bigger houses.

Toronto Star Consumer Columnist Ellen Roseman has had lots to smile about since her media articles, petition and blog were a catalyst for the Ontario Protecting Rewards Points Act effective December 5, 2016 which provides that loyalty rewards points can’t expire. Roseman found out about the changes when she was being interviewed on CBC Marketplace. However, to date similar legislation has not been tabled in Saskatchewan.

If you are planning a winter vacation this year, chances are one or more people will approach you about buying a timeshare week or two in paradise before you fly home. Tom Drake believes the purchase of a timeshare is usually a poor choice, since they can be hard to unload, and they depreciate in value so quickly. However if you can get a timeshare on the cheap on ebay or some other online site, it may be a better deal. But you might be required to pay the current year’s maintenance fee at purchase time, or you could possibly be on the hook for closing costs and transfer fees. Be sure to read the documentation carefully to ensure that you understand the terms and requirements.

In Episode 77 of her podcast series, Jessica Moorhouse interviews Steve Cousins from Arkansas who retired as a millionaire by working a regular 9 to 5 job for the same company for 40 years. She learned that he made sure to get a university degree in a field that has a high demand for skilled workers. Cousins also says you need to understand when it makes sense to stick with the same company or if you should move on. And finally, you need to live frugally, invest wisely and have a plan how to continue earning money during retirement. For example, he has become a serial entrepreneur with four different jobs now that he is retired.

And finally, Steve Weyman on HowToSaveMoney.ca describes how he ALWAYS does extreme price comparison to make she he gets the lowest price. Take a look at his 10-step process.

• Choose your product
• Start with a light google search
• Track the lowest prices
• Check ALL  flyers using Flipp.com
• Use price comparison sites to compare prices fast
• Do a manual search of well-known stores
• Find the lowest past selling price
• Price match to save more money
• Tack on a coupon if you can

I guess I’m not up to Weyman’s standard because I don’t have the time or energy for extreme price comparison. But you’ve got to admire his persistence!

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

It’s tough to come up with ideas year after year for memorable holiday gifts, particularly for young adults. One gift that will stand the test of time is contributions to a retirement savings account with the Saskatchewan Pension Plan.

Anyone age 18 to 71 can join SPP. Participation is not restricted by where they live or membership in other plans. However, in order to contribute members must have available RRSP room. The member application form is available online and must be submitted with a photocopy of the prospective member’s birth certificate, driver’s license or passport.

Maximum annual contributions (which become locked in until retirement) are $2,500/year but up to $10,000 per year can be transferred in from another RRSP. SPP is designed to be very flexible and to accommodate individual financial circumstances. There is no minimum contribution. Even contributing $10 per month will build an SPP account and provide a plan member with additional pension at retirement.

Contributions can be made in a number of ways: directly from a bank account using the PAC system on the 1st or 15th of the month; at a financial institution using a contribution form; using a VISA or MasterCard; through online banking; or by mail to the Plan office in Kindersley. SPP also provides the option to make contribution online using your VISA or MasterCard.

This means you can make an SPP contribution as a one-time gift this Christmas or make recurrent gifts at regular or irregular intervals for future occasions. One way to encourage your friend or relative to continue contributing to SPP is to offer to match contributions up to a specified amount – much like employers do in company plans.

The Plan’s average return to members since inception (1986 – 2015) is 8.10%. The five year average is 7.57% and the ten year average is 5.25%.  SPP has independent, professional money managers. The funds are invested in a diversified portfolio of high quality investments to ensure a competitive rate of return.

Chances are that 20-somethings entering the work force today will have precarious work for at least the first few years of their career with organizations that do not offer a retirement savings plan. Once they are married and have children, retirement savings may take a back seat to mortgage payments and daycare costs.

Helping a friend or relative to develop the retirement savings habit and topping up their savings is an invaluable gift. Savings of just $2,500/year earning interest at 5% will result in a retirement savings balance of $237,672.11.

So make gift giving this year easy by putting  SPP under the Christmas tree!

By Sheryl Smolkin

If you earn income in Canada, you pay taxes. My father-in-law always said, “If you make money, pay what you owe, but not any more than you have to.” So to help you manage your 2016 tax bill, here are 10 top end-of-year tax tips he definitely would have approved of:

1. Defer income: If you think you may earn less in 2017 than you have earned in 2016 and therefore be taxed at a lower rate, defer income where possible. This is less likely if you are employed and receive a regular wage or salary. However, your employer may agree to pay out a year-end bonus in January.  Also, if you are a consultant or freelancer consider wait until the beginning of 2017 to invoice certain clients.
2. Contribute to SPP: SPP plan members with RRSP contribution room can contribute a maximum of $2,500/year. Contributions made until the end of February 2017 can be reported on your 2016 tax return, but the sooner you make your contribution the better.
3. Max RRSP contributions: Your 2016 RRSP contribution limit is 18% of earned income you reported on your tax return in the previous year, up to a maximum of $25,370 minus any contributions to a company pension plan. However, unused RRSP contributions can be carried forward. Therefore if you have not maxed out your contributions every year, you may have thousands of dollars of contribution room. By using up this room you will trigger significant tax deductions when you file your 2016 tax return.
4. Spousal RRSP: Where only one spouse is employed, opening a spousal RRSP will allow income splitting at retirement. Your permissible contributions to a spousal RRSP will depend on your available RRSP contribution room and you will get the tax deduction. Also, if your spouse withdraws funds within three calendar years of your contribution, it will be attributed to you.
5. Max TFSA Contributions: As of this year, cumulative total TFSA contribution room is $46,500. Contributions are not tax-deductible, but investments accumulate tax-free and there are no tax consequences when money is withdrawn. Contribution room is also restored in the year following withdrawal. If you are holding cash or investments in an unregistered account and you have TFSA contribution room, consider moving as much as you can into your TFSA. However, keep in mind this will trigger a deemed disposition as of the date of transfer and you may have to pay any capital gains tax in the year of disposition
6. Disability tax credit: Taxpayers who meet the criteria can apply for a non-refundable disability tax credit (DTC) of $8,001 in 2016. Where the disability has been in existence for some time, you can file retroactively for up to 10 years. However, the DTC requires Canada Revenue Agency (CRA) approval. Your doctor needs to complete a T2201 Disability Tax Credit Certificate for the CRA to review and approve, and you can only proceed once you have this approval.
7. Get rid of losers: If you have an unregistered investment account, sell off investments with accrued losses at year end to offset capital gains realized in your portfolio.
8. Charitable donations: You have until December 31^st to make charitable donations that will generate a non-refundable tax credit on your 2016 tax return. You can typically claim eligible amounts of gifts to a limit of 75% of your net income. You can also claim any unclaimed donations made in the previous five years by you or your spouse or common law partner. You can find charitable donation tax credit rates for 2016 here. First-time donors who qualify can get an extra federal tax credit of 25%. For more information, see First-time donor’s super credit.
9. Donate stock: There are plenty of ways to give to charity, but the donation of shares, whether publicly-traded or private company shares, can give rise to significant tax relief. Not only will you get a charitable donation tax credit but you will not have to pay capital gains tax on any appreciation in value since you purchased the shares.
   
10. Medical/dental receipts: Make sure you have receipts for eligible medical expenses for you, your spouse or common-law partner, and dependent children under 18 that have not been otherwise reimbursed. They can be claimed on line 330 of the federal tax return. Only expenses in excess of the lesser of $2,237 for 2016 or 3% of net income can be claimed for the federal tax credit. Generally, you can claim all amounts paid, even if they were not paid in Canada.