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.

Dream of travelling? ­Retirement can be the time of your life – if you’ve planned ahead. Jamie Milton, partner of Uniglobe Carefree Travel of Saskatoon, meets many retirees making the most of these years.

“Travel is extremely popular among seniors. Those can be the years to see and do things you might otherwise not have had the time or money to experience earlier in life,” said Milton.

Two simple steps can get you that much closer to funding your retirement travel plans.

1. Become a member of a pension plan, such as the Saskatchewan Pension Plan. It is open to Canadians between the ages of 18 and 71 with available room to make RRSP contributions. The SPP is a good choice for those two-thirds of Canadians who do not have a workplace pension plan such as those self-employed or working for small businesses.
2. Contribute regularly as a member. Take advantage of time and compounding returns. For example, contributing $100 a month with annual investment earnings of eight per cent can grow to $150,030 in 30 years.

Find out how to become a member of the Saskatchewan Pension Plan and make your regular contributions by visiting our website.

Also See

Martin Firestone: What Snowbirds Need to Know About Travel Insurance
8 ways seniors can travel on a budget
Safe travel tips for Snowbirds
Snowbird? How to winterize your house

By Sheryl Smolkin

Today I’m interviewing Avinash Maniram, a partner and senior group benefits consultant in the Vancouver office of PBI Actuarial Consultants. Avinash is a frequent speaker on health and wellness topics at educational seminars and industry conferences.

We are going to talk about the health implications of the sedentary lifestyle many of us lead. In particular we’ll learn why “sitting is the new smoking” from a health risk perspective and what we can do about it.

Q: So before we start, let’s look at some vocabulary. How would you define physical activity?

A: Well when we’re looking at physical activity from the perspective of the World Health Organization, we’re referring to undertaking at least 150 minutes of moderate exercise or 75 minutes of more vigorous exercise per week. Moderate exercise includes walking, swimming, mowing the lawn, washing your car or gardening.  Things like running and aerobics are characterized as vigorous exercise.

Q: So what’s the flip side, for example, physical inactivity?
A: Physical inactivity, is really the failure to achieve that guideline of either 150 minutes of moderate exercise or 75 minutes of more vigorous exercise per week.

Q: What would you consider to be a sedentary lifestyle?
A:  A sedentary lifestyle is one that’s involves an excessive amount of sitting throughout the day.

Q: We’ve been hearing a lot in the media lately about the health risks of sitting too much. Is sitting actually that bad and how much is too much?
A: Recently a lot more studies have shown direct correlations between sedentary lifestyles and the incidence of various types of diseases and heart conditions. Research from the University of Toronto indicates that the impact of sitting on a person’s lifestyle or their health really kicks in for those who have been spending at least eight hours a day in a sedentary lifestyle. In fact, the average Canadian adult spends close to 10  hours a day in a sedentary state.

Q: What actually happens to our body when we sit too much?
A: Our circulation system is really developed to operate when we are in motion so when we’re spending too much time in a sedentary state, our muscles are no longer load-bearing.  They begin to atrophy and they become weaker.

Q: You mentioned heart disease but what other health conditions can too much sitting trigger?
A: What the studies have shown is that a sedentary lifestyle can impact the risk of certain types of cancers, most predominantly colon cancer and breast cancer. In the case of cardiovascular disease in Canada, approximately 25% of all cases are directly linked to a sedentary lifestyle. There are also links to diabetes. In addition, the more sedentary your lifestyle, the more prone you are to anxiety and depression.

Q: What about the impact of sitting on mortality rates? By the way, I want you to know that since we’ve started talking I’ve decided I can do this interview standing just as well as I can do it sitting so I got up from my chair.
A: That’s fantastic. Statistics Canada and the Conference Board of Canada did a study which found that if we could lower the proportion of the time that we spend sitting or in the sedentary state by just 10%, that could result in a 30% lower risk of mortality.

Q: Does sedentary behavior also impact productivity?
A: It certainly does. You can imagine if you’re sitting at your desk in the usual crunched, hunched over thinking position, over time,  circulation is impacted and as a result your brain gets less oxygen. So colloquially I guess we would call this “foggy brain. Resulting  poor mental health and sore backs can also have an impact on productivity.

Q: The other thing that really surprised me is that sitting is viewed as an independent risk factor. So even if I’m getting my hundred and fifty minutes a week, that’s not enough if I sit all the time.
A: Absolutely. So much of the mainstream media has been focused on getting those 150 minutes of moderate activity in a week. But if you’re sitting at a desk for eight hours a day and then you head to the gym for one hour afterwards, that doesn’t undo the eight hours of damage caused by sitting. So for every 30 minutes of sitting we should be getting up and walking around for about five minutes. Those periodic intervals of activity do a lot more to reverse the damage done by a sedentary lifestyle.

Q: Are there any guidelines for the kind of activity we should be interspersing throughout the day and how frequently? Can you give me some examples?
A: This is the neat thing. So often when we go to sessions or we read about these things, the solutions often times are so impractical that it puts them out of reach. This is one of the areas where the fixes are actually quite simple. One of the things that we can do is we can set up some mental triggers so when the phone rings, if you’re in the office, instead of taking that call sitting down you can stand up.

If you are in an office tower you can walk up or down the stairs instead of taking the elevator. Another obvious one is limiting the amount of time that you spend watching TV. For those in office settings, instead of sending an e-mail to your colleague across the floor or instead of phoning to ask them a question,  get up and walk over to have that discussion.

Q: What if any guidelines are there for parents with children who want to ensure that their kids are sufficiently active?
A: Well this is one of the biggest challenges that we have right now. If you look at the guidelines for children, they should be getting at least 60 minutes of moderate to vigorous activity per day. The experts also recommend less than two hours of screen time daily.

One suggestion is to replace the video games with outdoor activities. Sometimes you can use it as a bargaining chip. Often I find that when the kids go outside, I end up having to call them back in, because they’ve forgotten about their screens and they’re back to being playful children again.

Q: What about standing or adjustable desks or treadmill desks? How useful are they and how can employees convince their employers to pilot them or make them available?
A: Well on the surface they are very useful because they combat the immediate problem which sitting at the desk for eight hours a day. When you’re trying to sell the idea of an adjustable desk to your employer, try to convince the company that this is the right thing to do. You really just need to point to the health benefits — less time off work and less presenteeism for those who probably should be off work but insist on coming in everyday. The studies have shown that there is really no decrease to productivity with standing desks.

Q: You’ve been doing a lot of work on the impact of sedentary lifestyles. You’ve made some changes in the lives of yourself and your children. You are also a partner in your firm. Are your colleagues getting the message and have you been the catalyst for some of these changes in your own office?
A: We did a presentation on the impact of sedentary living and you could see the light bulbs go off in people’s minds. It’s something that’s really taken our little office by storm.

We see the message is getting through, just judging by the number of associates who have requested standing desks. They are not mandatory by any means but if an associate wants one we will certainly make it happen.

I’ve also noticed a lot more in-person meetings and fewer phone calls and e-mails to discuss work with our colleagues. When I do performance reviews, we go for walk, we go outside to have the discussion. Whenever there are smaller internal meetings, we may get up, buy a water or something and come back to the office and finish up.

Thanks for chatting with me today Avinash on this fascinating topic. My pleasure Sheryl.

 

 

 

Avinash Maniram, PBI Actuarial Consultants Ltd.

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This is the edited version of the transcript of a podcast recorded in November 2016.

By Sheryl Smolkin

Today I’m interviewing Michael Drak for savewithspp.com.  He is an author, blogger and speaker based in Toronto and co-author of Victory Lap Retirement with Financial Independence Hub CFO Jonathan Chevreau. Thank you for joining me today, Michael.

Thank you Sheryl.

Q: First of all tell me, what made you decide to write this book?
A: The stress at work was affecting my health, and I was reminded of this each morning as I took my blood pressure pill. I began to look into the possibility of retiring and got my hands on every retirement book that I could. I found out that most of them were just filled with numbers and rules of thumb about how much money I would need in order to retire. None of them really told me anything about what I might actually do in retirement. I think Victory Lap Retirement fills that gap.

Q: What exactly does the phrase “victory lap retirement” mean to you? How does it differ from full stop retirement?
A: To me victory lap retirement means freedom. It’s freedom to do what I want to do when I want to do it. In contrast, full stop retirement means pulling back — disengaging, sitting on the sidelines and becoming a spectator. It wouldn’t work for me at this point in my life because I still have a lot of game left in me.

Q: Is victory lap retirement essentially a synonym for an encore career or an encore job?
A: No, not really, because victory lap retirement is all about lifestyle design. The goal is to maximize the quality of your remaining years by creating a low stress, fulfilling lifestyle based on your own unique needs and values. An encore career is really work either paid or unpaid. But it can be an important component of the victory lap lifestyle. Part of my own victory lap contains a component of paid work, which I view as my fun money to fund new experiences for me and my family.

Q: Your coauthor Jonathan Chevreau coined the expression “findependence,” which is a mash up of the word “financial” and “independence.” Why is findependence the cornerstone and prerequisite to victory lap retirement?
A: Having financial freedom is what allows you work and live on your own terms. In other words, you can do what you want to do with your time and energy, not what someone else on whom you are financially dependent says you have to do. In short, “findependence” equals personal freedom and freedom is what life is all about in the end.

Q: How can people calculate how much they’ll need to be findependent and then reach that objective?
A: Findependence is best described on a cash flow basis. This is the way I was trained to think as a banker. It’s the point where your basic non-discretionary living expenses are covered by your passive non-work income. This is the amount of annual cash flow you need to keep a roof over your head, put food on the table and pay for the basic necessities such as heating, electricity, property taxes, etcetera.. Any additional non-discretionary expenses will be covered by the active work income that you generate during your victory lap, which we view as your fun money.

Q: As you’ve noted already, the decision to retire is not simply a financial one. In your book you counsel readers to beware of “sudden retirement syndrome.” What do you mean by this expression, and how can prospective retirees avoid it?
A: I really believe that they should put a label on retirement just like they do on cigarette packaging. Something like “Retirement could be dangerous for your health. Retire at your own risk.” Sudden retirement syndrome (not actually a medical condition) is a very dangerous thing. It’s the shock of withdrawal that occurs when a person suddenly ends their career. Not everyone goes through it, but I went through it, my father suffered from it, and I had a good friend die because  of it. Most people, unfortunately can’t relate to what you’re going through. They really can’t understand why you’re unhappy, especially when you don’t have to go to work anymore.

In my mind, it’s important to have a retirement mentor in your corner to help get you through this period to ensure that you do not do some dumb things like I did. I really believe that investment advisors should expand their offerings to include this service instead of just focusing on the investment piece. In my opinion, assuming you can just fall into retirement and everything will be okay is a disaster waiting to happen.

Q: How far in advance should victor lappers plan their exit from their current jobs or careers?
A: I’m teaching my kids that they should start aiming financial independence as soon as they start working. Victory lap planning is best done probably a few years before achieving financial independence. It’s always important to have an escape plan in place in case of emergency because these days with layoffs and mergers, you really never know what may happen. It really helps to know where you want to go in life and how you plan on getting there.

Q: How important is a social network to a successful victory lap?
A: To maximize happiness in retirement a lot of people are talking and writing books about it these days. Everyone says it’s really important to socialize with family and friends and continuing to work gives you an opportunity to surround yourself with fun, interesting people. Some people, for whatever reason tend to isolate themselves in retirement. They turn sour about life and that’s when bad things usually start to happen for them. Your social network will also provide emotional support and guidance as you work your way into your victory lap.

Q: The three stages of retirement have been described as go go, go slow, and no go. In that context, how long do you think your victory lap might last?
A: I love those descriptions of the stages and I totally agree with them. If things go according to my plan my victory lap will last into the go slow stage. This will be when I’m no longer capable of doing everything that I used to and it’s probably at this point that I would consider moving into a retirement home and letting others take care of me.

Q: Have you ever regretted your decision to leave the corporate world and embark on this new journey?
A: The only thing I really regret is that I didn’t learn about the concept of financial independence earlier in life. I really don’t understand why they don’t teach financial independence in school, and why the financial services industry doesn’t talk about it is puzzling. If I had known about financial independence I would have reached findependence that much earlier andhave left my high stress corporate job much sooner than I did. Life now is so much better on this side of the fence. It’s unbelievable.

Q: If readers are considering embarking on a victory lap retirement but are afraid to cut the ties to their former life, what advice do you have for them?
A: I acknowledge, it’s hard to leave a well paying job late in your career. The key is, if you don’t like your job, it might be better health-wise and also result in increased happiness if you make the change. I came to that conclusion for myself after reading Ernie Zelinski’s book How to Retire Happy, Wild, and Free. If on the other hand, you like what you’re doing, why would you ever retire? People have to get over the fear of taking a calculated risk and making a change for the better.

That’s great. Thank you very much for chatting with me today, Michael.
My pleasure, Sheryl.

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Michael Drak can be reached at mi**********@ya***.ca. Victory Lap Retirement is now available for orders online. It can also be purchased for Kindle or Kobo. The paperback edition is available in bookstores, and from either Amazon or Chapters.

This is an edited transcript of a telephone interview conducted in October 2016.