COVID-19

Oct 4: BEST FROM THE BLOGOSPHERE

October 4, 2021

Despite pandemic, retirement savings are still ticking along: report

As the brutal financial impacts of the pandemic washed over us – businesses forced to close, workers laid off, and so on – many observers expected that retirement savings might have to be raided so people could keep afloat.

New research from the U.S. suggests otherwise, reports Yahoo! Finance.

Recent research carried out by the Investment Company Institute found that “most Americans have not taken any withdrawals from their defined contribution (DC) retirement plans,” Yahoo! Finance reports. As well, “the vast majority of U.S. savers have continued to make contributions to their plans through the pandemic,” the article notes.

“Despite the economic challenges over the past year and a half, retirement savers show deep commitment to preserving their retirement nest eggs,” Sarah Holden, ICI senior director of retirement and investor research, states in the article. “The combination of ongoing contributions and few participants taking withdrawals reflects DC plan participants’ long-term mindset and preference to keep this money earmarked for retirement and avoid dipping into it.”

Paradoxically, the pandemic – a period where many thought money would be very tight – has turned out to be a period of higher rates of savings, the article notes.

“Though many households have been faced with financial constraints over the past year and a half, the aggregate personal savings rate has increased since COVID-19 first reared its head in the beginning of 2020,” the article states.

Indeed, here in Canada, the CBC reports that the average Canadian has saved $5,000 during the pandemic, thanks to “the combined impact of reduced spending and collecting more money from government support programs,” the broadcaster reports.

With less to spend on, Canadians attacked their debt loads and were still able to stash away “$5,574 per Canadian on average in 2020, compared to $479 in the previous year,” the CBC notes.

Back in the U.S., the ICI report found that only “1.1 per cent of all DC plan participants stopped contributing to their plans in the first half of 2021,” reports Yahoo! Finance.

It’s good to hear that people generally are leaving their retirement savings alone, despite the strange economy and overall odd spending era the pandemic has brought us. No matter what’s going on today, eventually all of us will reach an age where the income we get from working declines, and the income we need from our savings escalates.

Workplace pensions certainly help with retirement income; if you are in a program at work, be sure to maximize your participation if you can. If you don’t have a workplace pension plan, the Saskatchewan Pension Plan is a voluntary DC plan that professionally invests your savings and can help you turn it into an income stream when you hang up your working hat for the last time. They’ve been doing it for 35 years – check out SPP today!

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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Aug 30: BEST FROM THE BLOGOSPHERE

August 30, 2021

How to hang on to any “pandemic cash” that may be pilling up

While some of us have had to struggle to make ends meet during the pandemic, others have – somewhat ironically – seen their personal savings shoot to new heights.

A report by CTV News looks at how some of us may have to adjust our budgets as COVID-19 restrictions begin to taper off.

The article notes that by the second quarter of 2021, Canada’s savings rate rocketed up to 13.1 per cent, more than double the previous year’s savings rate.

“Even Canadians’ credit card debts have been dropping, with rates hitting a six-year-low in June due to reduced spending,” the article informs us, citing data from Equifax.

You read that right. Credit card debt is dropping.

“Across the board in all age groups, we’re starting to see people pay more than they actually spend on a credit card, which is a real positive behaviour change in terms of consumers,” Rebecca Oakes of Equifax tells The Canadian Press in the article.

That’s great, but when things return to “normal,” will we still be saving and paying off debt?

CTV suggests a few things to do with any extra cash you may have accumulated as normality begins – and there are more tempting things to spend your money on than during the locked-down pandemic.

Finance expert David Lester is quoted in the article as suggesting one destination for extra bucks would be an emergency fund, which should be enough to cover “six to nine months of expenses.”

Next, Lester tells CTV that your retirement piggy bank should not be neglected in the rush to spend, spend, spend.

“It could go into your tax-free savings account (TFSA) or registered retirement savings plan (RRSP), but we should just get used to saving 10 to 15 per cent” for retirement, he states.

If you spend with a credit card, Lester says it’s important to pay off the card each month, and to avoid letting a credit balance begin to grow.

He recommends that you pay off credit card balances first, as soon as you get paid, “and then going to zero (balance).”

If you are setting a budget for the world after the pandemic, be realistic, adds Lester.

There were a lot of things we couldn’t do – many of them expensive – that we may not want to spend as much on post pandemic, he explains. We lived without them for a long period of time, Lester tells CTV.

“Maybe it was travel, maybe it was movies, maybe it was having coffee at home, or not buying expensive clothing,” he says in the article. “So see what you really don’t miss and go back through that budget line-by-line and see what you don’t have to add back on now that things are opening up. We don’t want to go back to that bad spending that we were doing before.”

Our late Uncle Joe frequently would pull us aside and recommend the 10 per cent rule – bank 10 per cent of your money off the top, and live on the remaining 90 per cent. “You will never have any problems,” he said. It’s very sensible advice.

Pay yourself first, the old adage goes. And if you are putting away that cash in a retirement account, you are paying your future self first. You’ll be making life easier down the road, because you’ll be entering retirement with money in the bank and at the ready. A great way to pay your future self first is to set up an account with the Saskatchewan Pension Plan. They’ll invest your savings, at a low cost and a historically strong rate of return, and at the appropriate time, will help you convert those savings into retirement income. After all, they’ve been delivering retirement security for an impressive 35 years!

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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Aug 16: BEST FROM THE BLOGOSPHERE

August 16, 2021

Has pandemic “self-care” spending disrupted Canadians’ retirement plans?

It seems that we are starting to near the end of the pandemic, as economies across the country begin to slowly re-open.

But, according to an article in the Globe and Mail, there is concern that Canadians have been spending so much more money on “self care” in light of the pandemic that there may be little left for the retirement savings piggy bank.

The newspaper cites a recent Bank of Nova Scotia study that found “70 per cent of Canadians started partaking in at least one self-care activity during the pandemic, with 60 per cent of those spending an average of $282 in the past 12 months.”

By self-care, the Globe says, we are talking about “online yoga classes, baking supplies, $5,000 Peloton bikes and class memberships, $85 meditation apps, or meal delivery services that take the thinking out of dinner prep.”

While those approaching retirement spent the least on these categories, the Globe says younger people spent plenty. “Although they struggle to find the money for down payments on homes and families, even in good times, the Scotiabank survey found that Canadians 18 to 34 significantly outspent others (on) self-care activities in the previous year.” Their average rate of spend was $395, the article notes.

The article says that while it is understandable that people might spend money differently during the pandemic, it is important that they get back on track now that things are returning to a more normal setting.

“It’s still important for financial advisors to help clients stick to their bigger, longer-term financial goals like debt repayment and saving for retirement,” the article tells us.

Another poll, this one from the National Institute on Retirement Security in the U.S., points out that younger people already have obstacles in the way of their retirement savings plan. The NIRS media release is featured on the Le Lezard website.

In the release, NIRS spokesman Dan Doonan notes that “Generation X and Millennials are the first two generations that will largely enter retirement without a pension,” and states that it is not surprising they are anxious about their long-off golden years.

The research shows that 64 per cent of American Millennials and 54 per cent of GenXers are “more concerned about their retirement security in the wake of the COVID-19 pandemic.”

So let’s link these two ideas. Everyone is spending more on self-care, particularly younger people, due to the pandemic – but there are worries by younger people, GenXers and Millennials, about retirement security, given the lack of a pension at work.

If you don’t have a pension at work, you need to think about funding your own retirement. Government benefits are being improved, but currently deliver a fairly modest benefit. You have the power to supplement that future income by setting up your own retirement savings program. Take a look at the Saskatchewan Pension Plan – it offers everything you need for a do-it-yourself pension plan. You can set up automatic contributions from your bank account, or chip in lump sum amounts throughout the year. SPP will invest and grow your savings, and when you turn in your parking pass and security lanyard, SPP will help you convert that nest egg into an income stream. Check out SPP today, as the plan in 2021 is celebrating its 35th year of delivering retirement security.

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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Aug 2: BEST FROM THE BLOGOSPHERE

August 2, 2021

COVID did a number on the retirement rate, but it’s climbing again

One unexpected side effect of the pandemic was a dampening of people’s plans to retire.

According to new research from RBC, covered in a story from CTV News, there was an unexpected drop of 20 per cent in the retirement rate last year – likely due to COVID-19.

RBC’s Andrew Agopsowicz tells CTV that the dip “was likely a result of uncertainty about retirement savings as the pandemic arrived.”

“It’s what held people back,” he affirms in the story.

But – perhaps an indicator of better times ahead – retirements are starting to return to normal levels, he notes.

“The return to normal could be a good period for people to make a decision they were probably going to be making (anyway),” Agopsowicz states in the story.

There has been a general rise in retirements over the last decade as the boomer generation hits age 65, the story notes, and “that trend will continue for several years.”

A fringe benefit of the boomers getting out of the workforce may be “a near-term labour shortgage for some types of jobs,” Agopsowicz tells CTV. This will be due to a trifecta – boomer retirements, a low national birthrate, and lower levels of immigration, the story states.

In mid-July, CTV reports, Statistics Canada reported that the Canadian economy added 230,700 new jobs, “as restrictions put in place to slow the pandemic were rolled back across the country.”

Savings may have to last a long time

If you are among those planning to log out for the last time in 2021, Money Control outlines some of the steps you may want to consider to ensure your retirement stash isn’t exhausted before (ahem) you are.

Most retirees will live beyond age 85, the article notes. “We could live for up to 30 years or more post our retirement… (and) women live longer than men,” the article states.

With that in mind, you should plan for your investments to outperform inflation, the article says. If you can’t get there with fixed-income investments, “investing in equity will give you long-term growth; in between, there will be volatility.”

So, putting these two bits of information together – the stampede towards the workplace exit for boomers will soon resume its normal pace. The nest eggs boomers have built, and that younger folks are still building, will need to last for maybe 30 years. And while conventional wisdom suggests that the older you are, the less exposure to risky equities you should have, inflation hasn’t been a factor for a while but could one day reappear.

One answer is a “balanced fund” approach, where experts position their fund with exposure to both fixed income and equity, making strategic moves in advance of emerging trends. A great example is the Saskatchewan Pension Plan Balanced Fund, which has produced an average rate of return of eight per cent since its inception 35 years ago. While past returns aren’t a guarantee of future performance, the idea of having someone else decide when to get in or get out is a sound one – you can instead focus on your golf game or line dancing steps. Check out SPP today.

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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


July 19: BEST FROM THE BLOGOSPHERE

July 19, 2021

Could our passion for savings defuse the expected end-of-COVID spending boom?

In an interesting and perhaps “contrarian” article, Leo Almazora of Wealth Professional asks if Canada’s return to being a nation of savers could actually have a downside.

“For many pundits and analysts, the light at the end of the tunnel that is the COVID-19 crisis has been the prospect of a surge in spending as vaccinations allow the unleashing of pent-up demand. But based on certain interpretations of savings data, that may not be the scenario that plays out,” he writes.

He notes that during COVID – with so many spending options removed from play – savings rates jumped to almost 20 per cent in many industrialized countries, including Canada.

It was expected, Almazora notes, that once economies began reopening, the urge to spend would overcome the tendency to save. But research cited from Barron’s magazine in the article shows that “even as economies have reopened, savings rates have stayed unusually high.”

Almazora’s article contends that there were two types of COVID savers – a “forced savers” group that, while keeping their employment, had very few options to spend their money on, and “precautionary savers,” who – worried by the pandemic – save for the “next downturn or economic calamity.”

There’s a third group, he writes, who have sort of got out of the habit of spending on hotels and restaurants, and won’t be spending as much on those things going forward.

This is a very insightful piece. Three groups are described, those who can’t spend their money, those who worry about a fourth wave or some other nasty financial surprise, and those who have been converted to a new obsession – frugality.

One would assume that the “can’t spend” group will be among the first to book vacation flights and resume travel. Those who Almazora describes as “preppers” for a possible further wave of problems presumably won’t join in the fun, nor will those who have decided cooking at home and cutting back on expenses was not only fun, but has led to a piling up of cash in their savings accounts.

It will be very interesting to see how this all plays out; it may take as long to return to a “fully normal” economy as it took COVID to derail “normal” and move us to a stay-at-home/no spend reality.

This writer recalls doing research on pension plan funding – where people sock away money for retirement via workplace plans – and hearing economists suggest the act of saving money was, in effect, negative for the economy in the now. Money saved today cannot be spent today, the argument went.

While this is factually correct, that viewpoint – savings can be bad – ignores the fact that the saved money is invested, often in job-creating Canadian companies and services, and then withdrawn and spent years later by the retirees. It’s deferred spending, in a way.

As a soon-to-be double grandparent, this aging scribe has reached the opinion that any savings is always a good thing. Emergency savings when the roof leaks or the fence falls down; long-term savings for retirement income and to help the grandbabies.

If you have a workplace pension plan, be sure to not only join it, but to contribute to it to the fullest extent possible. If you don’t have a plan – or if you are a small business thinking of offering one to your team – check out the Saskatchewan Pension Plan. This scaleable retirement product works as well for one person as it does for a larger group – and they’ve been delivering retirement security for 35 years.

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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Has COVID affected Canadians’ ability to donate to charities?

July 15, 2021
Photo by Katt Yukawa on Unsplash

A few years ago – before the pandemic – Global News reported that Canadians were cutting back on charitable giving.

Citing research from the Fraser Institute, Global reported that in 2017 Canadians donated just 0.54 per cent of their income to charity – less than half of what Americans donated (1.25 per cent) in the same timeframe.

Given the severe economic mayhem the pandemic has wrought upon us, Save with SPP wondered if charitable giving has taken an even further plunge.

It sounds like a recovery in charitable giving is underway, states an article posted in the Globe and Mail.

According to the article, authored by the Association of Fundraising Professionals (AFP), “in the 12 months since March 2020 when the pandemic was declared, more than three-quarters of Canadians who had given previously to charity continued their philanthropy and gave larger gifts than in past years.”

And while only 70 per cent of Canadians made charitable donations in 2017, 76 per cent did in 2020, and “the average size of the gifts was much higher – up from $772 in 2017 to $965 in 2020,” the article adds.

The AFP’s chair Susan Storey is quoted as saying “Canada is a phenomenally, uniquely generous nation, and philanthropy, at its core, is about helping others and strengthening communities,” she says. “So, it’s not surprising that for those that could give, they did – and generously.”

The Canada Helps website says that while “year over year” giving grew, the overall rate of giving is expected to decline about 10 per cent due to COVID-19.

This site suggests that our charitable giving is more targeted during tough economic times.

Canada Helps reports that Canadians gave 1.6 per cent of their income to charity; however, the percentage of Canadians who make donations is down from the level of 24 per cent it reached in 2007.

Charities have had to be resourceful during the COVID-19 pandemic, when traditional avenues, such as displays in malls or street corners, weren’t available. Online donations are one solution, and in Ottawa, local branches of the Royal Canadian Legion used a drive-thru approach for last fall’s poppy campaign, reports CTV News.

“I think it’s a great idea. First off you don’t have the older veterans out in the cold and wet, obviously it’s keeping them safe from the people in the stores and malls,” Richard Coney tells CTV, praising the idea of a drive-thru poppy campaign.

Donations to Indigenous Peoples’ Charities – for example are up 2.25 per cent, as are donations to social services charities (up 2.2 per cent) and health charities (1.8 per cent).

If you’re able to help out the charity of your choice – and maybe have had to cut back due to the pandemic’s impact on your finances – consider resuming your contributions now that we are emerging from the darkness of the pandemic. There’s a lot riding on it for a lot of people.

Similarly, if you’d had to cut back on retirement savings during COVID-19, gear back into it as soon as you can. A nice feature of the Saskatchewan Pension Plan for its individual members is that you can gear up your contributions when times are good, and gear down when they aren’t. The flexible SPP – celebrating its 35th year of operations — is open to accepting monthly pre-authorized contributions, or a little bit at a time through the “online bill payment” section of most banks. It takes many small steps to complete a journey, after all!

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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


How the pandemic has changed the way we save and spend

June 10, 2021

As – touch wood – we begin to see the end of the COVID-19 pandemic, we ought to begin to see a return to normal, at least in terms of how we save money and how we spend it.

But the pandemic has changed the way we do those things, research by Save with SPP has found.

According to CTV News, the pandemic “has changed grocery shopping forever.”

It’s expected, for instance, that the trend towards online grocery shopping will continue even after the pandemic.

“The online buying, based on the numbers that we have now, I don’t think it’s ever going to go away,” Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, tells CTV. “I think more and more people will continue to buy food online, regularly, whether it’s through order and pick-up or to get the food delivered.”

And it’s not just big grocery stores, the article notes. The owner of a small Nova Scotia-based meat shop says she thinks online ordering and curbside pickup will continue after the all-clear is given on the pandemic.

The Times of India says there are six lasting money lessons from the pandemic that we all can learn.

“One thing that the pandemic has made us all realise is that we can all save way more than we think. We were forced to stop eating out, go shopping, partying, go to movie theatres or concerts etc. While these are the things we will want to do as things slowly go back to normal, we have had a glimpse of how much we can save if we do not indulge in them as often as we used to,” the article begins.

The point of having an emergency fund has been underscored by the pandemic, the Times notes. The job loss many of us experienced impacted our workplace benefits, prompting some to consider self-insuring, the article adds.

The pandemic also shows us the danger of high-interest debt – what happens with it when our work is reduced or outright ended.

“High-interest debt, like credit card or personal loan, is harmful to you financially even when you have a regular paycheque in your hand. The damage caused by them increases many folds if you are out of a job. Further, if you are unable to pay on time, the piling interest rate can increase the debt amount,” the Times tells us.

A Toronto Sun article provides seven tips – aimed at small business owners, but useful for all of us – based on lessons learned from toughing it out during the pandemic.

Keep track of your credit score, and pay down debt, the article advises. Diversify your investments. Stick to a budget, and set up an emergency fund, the article tells us. “You don’t want to be caught off guard when it comes to unexpected expenses,” we are told. Finally, the Sun says, get back on track with your retirement savings.

There’s a general theme to these messages, and it is a good one to listen to. We’ve been limited on spending, and are often involuntarily saving more, for more than a year. A spending “explosion” is expected when things are fully reopened. The experts here are warning us not to go overboard, to follow a budget, to continue to save, and to wade, rather than jump, back into the re-opened economy.

Retirement saving is a great thing to be doing in good times or bad. With the Saskatchewan Pension Plan, you are in control of how much you want to contribute to your future retirement. If money is tight, you can gear down; if money is more plentiful, you can contribute more. And the money you do contribute will be professionally invested for you. It will be waiting once you punch the timeclock for the last time. Check out SPP today.

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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


How we’re passing the time as the pandemic rolls along

April 15, 2021
Photo by Mick Haupt on Unsplash

For more than a year now, Canadians have had to deal with restrictions – sometimes fairly light, other times more of the “stay at home” variety – on what we can and cannot do.

Save with SPP took a look around to see what sort of things people are doing to keep busy at a time when so many of our usual activities are temporarily closed down or otherwise restricted.

A report from CTV News suggests that today’s situation is somewhat akin to the Great Depression of 90 years ago – so many people were out of work, or working reduced hours, that there was a huge growth in hobbies. “Stamp collecting, music making, woodworking and birdwatching” all grew in popularity in the 1920s, the article notes.

“In this time of uncertainty and instability, and a world and existence we no longer recognize, people need an anchor to familiarity and what once brought them comfort, stability, safety, and happiness,” clinical psychologist Dr. Jeff Gardere tells CTV.

Today’s pandemic hobbies include things like “tie-dying clothes, attending PowerPoint parties and partaking in TikTok challenges,” the article notes. These join more traditional activities such as walking and cooking, CTV reports.

Physical activity is of critical importance, even during the pandemic, reports CBC International.

Citing a report from the World Health Organization, CBC reports that “regular physical activity is said to be key to preventing and helping manage heart disease, diabetes and cancer and reducing depression and anxiety, cognitive decline and boosting brain health.”

The article suggests 150 to 300 minutes per week of “moderate to vigorous aerobic activity for all adults.” This can include walking, cycling, dance, play, and even “household activities like cleaning or working on your lawn and garden,” the article says.

“Every move counts, especially now as we manage the constraints of the COVID-19 pandemic,” WHO Director-General Dr Tedros Adhanom Ghebreyesus states in the article. “We must all move every day – safely and creatively.” 

Country Living magazine agrees that creative approaches to keeping active are being used – and some things that were more popular in the past have made a comeback.

The article lists such things as home gyms, handheld gaming consoles, jigsaw puzzles, swimming pools, and trampolines as ways you can do more without leaving home.

The Reviewed.com site adds a few more. TV choices, thanks to the many streaming services out there, are more numerous than ever before. Reading, arts and crafts, yoga, DIY home improvement projects and meditation are among the ideas listed.

Putting it all together, finding something to do will keep you feeling more positive – and more optimistic that we are starting to near the end of this bizarre, unhappy and eerily quiet crisis.

One activity that you might want to revisit during the pandemic is dusting off your retirement savings plan – if you have one. If your savings efforts haven’t started, are stalled, or if you want to add on to what you’re doing now, consider the Saskatchewan Pension Plan, currently celebrating its 35th year of operations. Your pension savings, small or large, are expertly invested at a low cost, and grown for that future date when you walk away from the office for the last time. With an average rate of return of 8 per cent in the balanced fund since inception, SPP is an option you should take some time to check 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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


APR 12: BEST FROM THE BLOGOSPHERE

April 12, 2021

Canadian millennials now focused on long-term saving: report

It’s hard to find many silver linings to the dark, terrible cloud that is COVID-19, but a report from Global News suggests the crisis has caused millennials to think longer-term when it comes to savings.

Carissa Lucreziano of CIBC tells Global that Canadians aged 24-35 “are very committed to saving more and investing.” That’s great news for this younger segment of our society, she states, “as actions now can have long-term benefits.”

The report also cites data from Semrush, an online data analysis company, as showing 23.6 per cent of millennials regularly visit their online banking websites, as compared to 20.7 per cent of older Canadians aged 35 to 44.

Semrush’s Eugene Levin tells Global this suggests younger people “are more conscious moneywise… they are using this time (the pandemic) to plan out their finances to either mitigate their financial insecurity or improve their financial security.”

Other findings – more people are searching for information on Tax-Free Savings Accounts (TFSAs), and investment apps like Wealthsimple and Questrade, the article reports.

CIBC data noted in the Global report found that 38 per cent of millennials have decreased spending, 34 per cent plan to add to TFSAs or Registered Retirement Savings Plans (RRSPs), and to establish emergency savings accounts.

While there is also interest in topics like payday loans and installment loans, the article finds it generally positive that younger people are thinking about long-term savings.

For sure it is positive news. Data from Statistics Canada reminds us why long-term savings are so important.

The stats show that as of 2019, 70 per cent of Canadians are saving for retirement, either on their own or via a workplace savings program – that’s up from 66 per cent in 2014, Stats Canada reports.

“Interestingly, this may reflect the fact that over the past five years, Canadians have become increasingly aware of the need to save for retirement,” reports Stats Canada. “For example, almost half of Canadians (47 per cent) say they know how much they need to save to maintain their standard of living in retirement—an increase of 10 percentage points since 2014 (37 per cent).”

Those who don’t save for retirement on their own (or via a workplace plan) will have to rely on the relatively modest government benefits, such as the Canada Pension Plan, Quebec Pension Plan, and Old Age Security, the article notes. And surely, the terrifying pandemic era has more of us thinking about our finances, both current and future.

So that’s why it is nice to see the younger generation is focusing on these longer-term goals. The best things in life, as the song goes, are free, but many other things carry a cost. The retired you will certainly be thankful that the younger you chose to stash away some cash for the future.

If, as the article notes, you don’t have a workplace pension plan and are saving on your own for retirement, there’s a plan out there for you that could really be of help. For 35 years, the Saskatchewan Pension Plan has been delivering retirement security; the plan now manages $673 million in assets for its 33,000 members. Check them out today!

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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Mar 29: BEST FROM THE BLOGOSPHERE

March 29, 2021

We talk – endlessly, it seems – about the importance of building retirement security, either via a workplace pension, your own savings, government plans, and so on.

But a new report from Market Watch suggests there’s a new investment category that more of us need to focus on – the “psychological portfolio.”

The article quotes Nancy Schlossberg, author of Too Young To Be Old: Love, Learn, Work and Play as You Grow Old, as saying any retirement planners should think of “what they’ll do in retirement, and how they’ll interact with others.”

“You have your identity so tied to work, when you are no longer working, who are you?” Schlossberg stated at a recent live personal finance event. In other words, your future you may not be the same as the current version of you.

Schlossberg goes on to define six different ways you can define your own retirement path. According to the article, the six ways are:

  • adventurers, who take on a new job they’ve never done before
  • continuers, whose work is similar to what they did before
  • easy gliders, who take retirement day by day
  • involved spectators, who immerse themselves in fields without working at it full time
  • searchers, who aren’t sure what to do next, and
  • retreaters, who can’t figure out what to do

Whatever path you select will help you build your new post-work identity, Schlossberg notes in the article.

The article concludes by quoting Marty Kurtz of the Planning Center, who appeared on the same panel with author Schlossberg, as saying “do we have a good view of reality and do we understand what our expectations are? It is not just about the money, it is about money and life and how.. they work together.” 

Dividend investing – a good approach for volatile markets ahead?

Writing in the Financial Post , author Christine Ibbotson suggests dividend investing is a good way to address volatile markets.

“When (bond) yields are likely to stay low and markets have a tendency to have future volatility, dividend strategies should be revisited. Start moving more of your investments toward high-quality dividend payers and high-quality growth-name stock picks,” she writes.

Periods of low interest rates “have always typically benefited dividend investing,” and growth stocks in particular seem to do well in a low-interest rate environment, Ibbotson notes.

She says that while many investors expect a “bull market” after COVID-19 is finally addressed, there may be a lot of market swings before then. “There will be some unexpected volatility that will at times remain elevated in the coming months as investors continue to doubt the validity and sustainability of the bull,” she predicts.

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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, and playing guitar. Got a story idea? Let Martin know via LinkedIn.