Financially independent seniors require less government help: Frazer Stark

Writing in the Financial Post, Frazer Stark notes that the “looming crisis” of baby boomer retirements — with those boomers living longer lives than their forbears — can be solved with a little more focus on self-reliance.

“Retirees,” he writes, “face uncertainty on multiple fronts: market returns, cost inflation and their own physical health. Yet it’s the unknown length of an individual’s ultimate lifespan that creates a labyrinthine financial planning challenge.”

“Consider that a 65-year-old woman entering retirement can expect to live on average to age 87,” he explains. “This average hides variability: she still has a 10-per-cent chance of living past 100, a one-per-cent chance of living past 105 and a tiny chance of reaching 110 or even beyond that (the oldest Canadian on record passed away at 117 years and 230 days). This variability makes determining how much to safely spend from her nest egg rather tricky,” he writes.

This danger of outliving one’s savings, he explains, can be handled several ways. You can “play it safe” and avoid drawing down your savings, he writes. But that carries the cost of “not fully enjoying these special retirement years while we can.”

You could also simply ignore the problem of living into your 90s and beyond by spending “freely as you set into retirement.” This can backfire, Stark adds, and your future you may suffer as a result of early heavy spending.

Defined benefit (DB) pension plans, Stark continues, offer a form of insurance against longevity, as such pensions are paid for life. Yet, he says, we “continue to steadily transition away from the DB pension structures that offered comfortable, confident retirements to previous generations.” Less than nine per cent of private-sector workers have DB plans today, compared to 50 per cent in the late 1970s, he notes.

Because such plans are so scarce in the private sector (they are more common in the public sector), Stark writes that “some… are giving up, viewing retirement as an unattainable goal.” Recent research has found that many have “curtailed saving,” rather than cutting back on today’s expenses to save for tomorrow, he continues.

As an example, he writes that the average price of a new car in 2022 hit more than $61,000, while in the same year, “59 per cent of Canadians said they were saving nothing for retirement, or little at all.”

Only a small percentage of Canadians insure themselves against running out of money in retirement via the use of lifetime annuities, he writes.

There has been progress in rolling out low-fee retirement savings programs (Stark mentions Wealthsimple), but “a similar evolution is now essential for the decumulation phase,” when saved retirement dollars are turned into income.

“Last year, the Organization for Economic Co-operation and Development (OECD) updated its pension-program guidelines, recommending that member countries provide their retired populations access to income-for-life options, including `by non-guaranteed arrangements where longevity risk is pooled among participants,’” Stark writes.

While work is being started by government and the financial sector on programs that address longevity risk for retirees, the path to this future “remains largely untrodden, and much work remains,” he continues.

Stark sees a solution in boosting “baseline education” about finances, and developing for Canadians “a set of tools to solve the decumulation problem for themselves.” This won’t be easy, will require a lot of innovation, but will be worth it, he predicts.

“Every Canadian who can comfortably navigate their own retirement finances is one less person requiring expensive subsidized care from the public purse, which must come from either increased taxes, additional borrowing or reduced spending elsewhere. The fourth option would be to simply not provide aid, creating tremendous suffering among our vulnerable elderly population and a stain on our national conscience,” he concludes.

This is a very well-written and detailed look at an insidious problem that tends to bite you in the backside when you are too old to deal with it — running out, or running low, on retirement income.

There is a way out of this for members of the Saskatchewan Pension Plan. SPP has you covered on the savings side — your contributed dollars are invested in a low-cost, expertly managed pooled fund. But SPP also has you covered at the drawdown stage. You can choose from a variety of SPP annuity options when you retire. All of them will provide you with an income supply that never runs out — a payment nestled in your bank account at the beginning of every month.

Check out SPP today!

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Millennial homeowners said to have easier time saving for retirement

Those of us of a certain age worry about our millennial kids and grandkids, chiefly because of the massive costs they face in order to own a home, and the higher interest (and mortgage) rates they are dealing with.

If there’s a silver lining, it may be that those home-owning millennials will have an easier time saving for retirement than their peers who rent — so says an article in the Financial Post.

“Owning a home could make all the difference between millennials having enough money to retire or being forced to work longer than their parents did,” the article explains.

“If millennials — who today are in their late 20s to early 40s — rent throughout their working lives, then they must save a lot more than homeowners in order to retire in their 60s, according to the 2023 Mercer Retirement Readiness Barometer,” the article continues.

“This is a generation where being able to retire is one of the top three challenges when we look at unmet needs,” Mercer Canada’s Jillian Kennedy states in the article.

The article says millennials who rent “will need to save eight times their salary over the course of their career to be able to retire at age 68.” But a millennial homeowner needs to “only” save 5.25 times their salary to be able to retire three years younger, at age 65, the Post reports.

These figures are based on a millennial earning $60,000 annually and saving 10 per cent of their salary to a monthly savings plan, starting at age 25.

OK, so why are the homeowners able to save so much less?

“Homeownership gives retirees flexibility, as retirees who downsize may be able to access a significant amount of money. Renters, conversely, must pay rent every month or face eviction – whether they are 25 years old or 85 years old,” the Post reports, citing a Mercer media release.

As many of us worrying parents and grandparents already know, the big problem millennials face with housing is its cost.

“The composite benchmark price of a home in Canada rose 87.4 per cent over the last decade to February 2023, according to date from the Canadian Real Estate Association,” the article notes. These days, the article continues, “mortgage payments as a percentage of income on a ‘representative’ home stood at 64.6 per cent in the fourth quarter of 2022.”

Housing is said to be “affordable” when it represents one-third of disposable income, the article concludes.

Things sure have changed. Our late dad used to tell us, when we were kids growing up, that a mortgage should cost no more than “two years’ salary,” and that housing costs were affordable as long as they represented 25 per cent of salary. Those rules of thumb probably worked in 1965 but you’d have to make a heck of a lot of money to be able to follow them today!

The article tells us that even those millennials fortunate enough to enter the housing market still need to save a lot of money to be able to retire at 65 — we assume this is absent a pension plan at work. If you are saving on your own for retirement, check out the Saskatchewan Pension Plan. SPP will take your contributions, invest them in a pooled fund at a very low cost, and — when it is gold watch time — will help you turn your invested savings into retirement income, including the option of a lifetime annuity payment.

SPP no longer sets any limits on how much you can contribute to the plan. You can make an annual contribution of any amount up to your available registered retirement savings plan (RRSP)room. And you can transfer any amount into SPP from an existing RRSP.

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Investing is a lot like golf. Anyone can get some clubs and play the game, but very few of us get to the point where we’re breaking par. That level of skill tends to be the exclusive domain of professionals, or well-trained amateurs, rather than those teaching themselves via social media, websites, and “can’t miss” tips from friends.

With investing, again like golf, there are common mistakes to avoid that will improve your results. Save with SPP had a look around the Interweb to find out what folks think you should not do when it comes to managing your investments.

Writing in the Financial Post, Peter Hodson warns of the danger of “anchoring.”

“Do not anchor your expectations to where the stock has been in the past. Anchoring can cause you to keep a stock far longer than you should (it used to be $100, so it must be cheap now), but it can also keep you from buying a stock that has already risen (it is too expensive now). The only thing that should matter is what a stock may do going forward,” he writes.

He also warns about focusing too much on the yield of a stock.

“If the stock declines 25 per cent then of course that seven per cent (yield) was only just the `hook’ that got you into a sinking ship. It is far better to focus on companies with lower dividends that have the ability to raise them. Dividend growth stocks have been proven over time to be much better performers than high-yielding stocks.”

At the Morningstar site, we learn that diversification — often touted as a way to avoid downturns — isn’t always a safe harbour.

“2022 is an example of a year where more assets in the portfolio would not have offered more diversification. The only asset classes that have delivered positive returns are the energy sector, the U.S. dollar and some ‘niche’ markets such as Brazilian equities,” states Morningstar’s Nicolò Bragazza.

In plainer terms, moving eggs into different baskets in 2022 would have led to quite a few broken eggs.

He also adds these ideas — the false belief that “history always repeats itself” when thinking about past market performance, and “trying to predict the future” of the markets. No one knows what’s going to happen next, he explains.

The Motley Fool blog offers up a couple more.

Don’t, the blog advises, “have a short-term focus” when investing.

“Having a longer-term focus can help you wait out a crash until the market recovers, which it often does within only a few months. Indeed, the average stock market drop takes about six months before changing direction — and most take less than four months,” the article tells us.

Similarly, if things are going south with the market, don’t sell off your holdings in a panic.

“One mistake many make when the market crashes is selling out of it. They’re doing the opposite of the old investment chestnut to `buy low, sell high.’ If your portfolio plunges by, say, 30 per cent, you haven’t technically lost any money until you sell your shares and lock in that decline. Hang on and you’ll often be able to sell later, at a significantly higher price.”

We have done most of these mistakes over the years, as well as a few other ones, like plunking down money on “can’t miss” hot tips from friends that turned out to be big losers. Buying shares in a company teetering on bankruptcy because of the belief that it will make a comeback probably has paid off for some folks — not us!

It’s a place where expertise is necessary. Most professional money advisers we know advise that ordinary people get help with their investments. Fortunately, that professional investing advice is included when you become a member of the Saskatchewan Pension Plan. SPP will invest your retirement savings in a low-cost, pooled fund that is managed by experts. You can leave the heavy lifting of reading the tea leaves on ever-changing markets to them.

News just in — contributing to SPP is now limitless. There is no longer an SPP limit (you can contribute any amount up to your full registered retirement savings plan room) on how much you can contribute to the plan each year, or transfer in from a registered retirement savings plan. Check out SPP today!

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Higher interest rates spell trouble in ’23 for borrowers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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You’re enjoying your retirement party, your last paycheque is about to be deposited, and soon you’ll be cracking into your retirement savings.

All smooth sailing? Well, it can be if retirees are aware — in advance — of some of the bumps in the road ahead. Save with SPP took a look at the most common risks faced by those of us who are retired.

If your retirement savings are invested and you plan to live off the proceeds, investment risk and inflation should be near the top of your list, reports the Financial Post.

“Turbulent markets, soaring inflation and a higher cost of living are all impacting older workers that are transitioning to full or part-time retirement,” Mercer Canada’s F. Hubert Tremblay tells the Post.

The Kiplinger website adds a few more. Will you outlive your savings, the article asks? That’s known as “portfolio failure risk,” and can happen even if you have a set withdrawal rate, such as taking out no more than four per cent of your savings each year.

“Another withdrawal method is guessing how long you’ll live and dividing your savings by 20 to 30 years—but what happens if you live 31 years,” the article asks.

They also cite “unexpected financial responsibility risk” as being a possible challenge — this would involve having to help out adult children or ageing parents — or both.

The Wealth of Geeks blog offers up a few more risks, including a surprising one — frustration.

“Retirees are frustrated with their retirement,” the article notes. “On average, retirees rate their satisfaction in retirement as 7.0 out of 10 in 2022, compared to 7.4 in 2020. Similarly, retirees ranked their alignment of life in retirement with their prior expectations at an average of 6.4 in 2022, down from 6.8 in 2020,” the article continues.

A lot of the frustration is linked to inflation — the fact that everything costs more than it did even a year ago, the article continues. Having less to spend than expected while on a fixed income becomes a source of frustration, the article explains.

Forbes magazine sees three chief risks for retirees. The first two, inflation and investment risk, we’ve covered — but the third is possibly even more important — longevity risk.

“While there are a lot of benefits to living a long time, longevity increases financial risk. You need to pay the living expenses for all those extra years. Also, your annual expenses might increase, because people generally need more medical and long-term care as they age,” the Forbes article explains.

Save with SPP has been embedded in the camp of retirement for more than eight years now, and we can add another risk to the list — carrying debt into retirement.

According to the Canadian Press, via CP24, Canadians have $1.83 in debt for every dollar they earn.

While that’s bad, having debt when retired (and living on less income) is worse. Trying to reduce debt prior to retirement is, in many people’s opinion, almost as important as retirement savings.

It’s a daunting list of potential pitfalls. The best way to arm yourself against future risks is to have retirement savings and thus, future retirement income.

If you have a pension or retirement system through work, you are ahead of the curve. If you don’t, consider the Saskatchewan Pension Plan. SPP is a pension plan any Canadian with registered retirement savings plan (RRSP) room can join. SPP will take your contributions, as well as transfers from other RRSPs, and will grow them efficiently in a pooled fund offering low investment costs. When it’s time to turn savings into retirement income, SPP has several options for you, including lifetime annuities which guarantee you’ll never run out of income. Check out SPP today!

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Canada no longer a top 10 country for retirement security: Natixis survey

A “decline in financial well-being and happiness” is cited among the reasons why Canada is no longer a top 10 nation in retirement security.

Writing in the Financial Post, Victoria Wells reports Canada has dropped to 15^th place (from 10^th place last year) on the Natixis Investment Managers ranking of the countries that offer the highest level of retirement security.

“The main reasons for the drop, Natixis IM said, are a decline in financial well-being and happiness, increased tax burdens, a rapidly aging population and environmental factors, such as a lack of biodiversity,” Wells reports.

She further notes that this dip in retirement security levels coincides with “soaring inflation, aggressive interest rate hikes and a wobbly stock market,” all factors making 2022 “one of the worst years ever to retire.”

In the article, Dave Goodsell of Natixis notes that the study found 65 per cent of Canadians surveyed are “underestimating their life expectancy,” and “61 per cent haven’t considered how much inflation will impact their finances.” A further 60 per cent, he states in the article, “aren’t planning for additional healthcare costs” as they age.

Another problem for the retirement system, the article reports, is the strain on the Canada Pension Plan (CPP) system as “the number of seniors boom in relation to younger workers who pay into CPP.”

“Investment strategies, financial planning, employee benefits and policy considerations will all need to factor in a new funding equation that accounts for inflation, interest rates and increased longevity,” Goodsell states in the article.

The top three countries for retirement security are Norway, Switzerland, and Iceland, the article concludes.

Another factor not noted in this article is the huge increase in retirements in this country. The Peterborough Examiner reports that retirements are up 50 per cent in Canada versus last year. The Examiner cites Statistics Canada data from August that showed 307,000 Canucks had retired in the last 12 months, versus 233,000 a year earlier.

As well, the Examiner article reports, 12.9 per cent of Canadians say they are planning to leave their jobs for retirement soon – that figure again is from August of this year.

So, summing it up, a record number of Canucks are heading out of the workplace for the last time, despite the fact that markets are unstable, inflation is at decades-high levels, and interest rates are soaring – the latter bit of news being good for savers but bad for debtors.

It’s worth noting that the CPP has a massive contingency fund, run by CPP Investments, that currently has $523 billion in assets according to a recent news release. So if we ever do get to a point where the contributions to CPP made by workers aren’t enough to pay CPP pensions, there’s a large keg of money that can be tapped at that time.

However, it’s best to have multiple streams of retirement income to rely on in the future. If you have a workplace pension you are ahead in that game. If you don’t, or want to augment your overall savings, a helpful tool is the Saskatchewan Pension Plan, a defined contribution plan that’s open to any Canadian with registered retirement savings room. Contributions you make to SPP are pooled, invested professionally at a low cost, and are grown prudently until you are ready to convert savings to retirement income. Check out SPP today!

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SPP touted as a do-it-yourself retirement program

A recent Financial Post article outlines a major problem – how so many Canadians lack a workplace pension plan – and then shows how the Saskatchewan Pension Plan (SPP) can provide a do-it-yourself option.

The article, written by Sigrid Forberg, notes that the old days of working your entire career for one company, and then getting a pension from them, are “long gone.”

While 5.5 million Canadians were covered by “either a defined benefit or a defined contribution plan” by the end of 2019, that means that “only 37 per cent of Canadians are covered by a pension plan – leaving the other 63 per cent to save for retirement on their own.”

In the article, Wendy Brookhouse of Black Star Wealth in Halifax looks at the options those without workplace pensions have for saving.

“There are a lot of preconceived notions, there’s lots of rules of thumb out there that may or may not serve people, you know … ‘you need a million dollars to retire,’ or ‘you need X per cent of your pre-retirement income,” says Brookhouse.

Workplace plans make the savings simple, as an amount is deducted directly from your paycheque. But if you don’t have a plan at work, putting away money on your own “might feel like a big sacrifice,” Brookhouse states in the article.

Brookhouse recommends regular savings on your own, via either a registered retirement savings plan (RRSP), a tax free savings account (TFSA), or even life insurance.

Or, the article continues, Canadians without workplace plans could take a look at the SPP.

“Another option for those without workplace pension plans is the Saskatchewan Pension Plan (SPP). This plan was created by the Saskatchewan government in 1986 to help fill the gap for residents of the province who didn’t have access to a professionally managed pension plan. The program has since been expanded to all Canadians,” the article notes.

“The goal was to provide a collective non-profit — a trusted collaboration where people could finally get the really low fees they typically would get through a professionally managed plan,” states SPP’s executive director Shannan Corey in the article.

“In 2022, you can put up to $7,000 into the fund, depending on your personal RRSP contribution room. The fund currently has 33,000 members, with about $600 million invested. The historical returns are about eight per cent and annual fees are less than one per cent,” the article states.

With SPP, your contributions are locked in until you reach age 55, the article notes. At that point (or any time before you reach age 71) you can decide to convert your SPP savings into income, either by drawing the income down and/or receiving an SPP annuity. Saskatchewan residents have the added option of a variable benefit, the article explains.

“Our plan was designed for people who had gaps,” says Corey in the article. “The flexibility that we offer can really help people navigate those ups and downs a little better.”

Without having some sort of do-it-yourself retirement program in place, your options might be limited to working longer. The article cites the views of an actuary who argues that government pension benefits, which currently must be collected by age 70, should be allowed to be deferred to age 75. Do we really want to keep working that long?

Save with SPP can attest to the effectiveness of the SPP program; both this writer and our better half are members. There are no pre-set contributions, you can contribute in dribs and drabs up to $7,000 per year. So for us, small lottery wins, insurance payouts on dental visits, rebate cheques, and bottle deposits are sources of retirement savings. We also take advantage of making lump sum transfers from our other RRSPs into SPP.

Now, with retirement in sight for the boss, our SPP estimate says we are on track for a $500 monthly lifetime annuity payment for her next year.

SPP invests your money at a very low fee compared to typical retail mutual funds, and you are getting investing expertise at a time when markets are volatile and even a little scary. It’s an option that anyone lacking a workplace plan should check out – an all-Canadian pension solution built with Saskatchewan ingenuity! Check out SPP today.

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Newly-minted retirees finding golden years expensive, thanks to inflation

Writing in the Financial Post, Victoria Wells reports that new retirees – who jumped ship on work due to the pandemic – are finding their golden years more expensive than they expected.

She notes that many folks left their jobs earlier than planned due to COVID-19.

“One-third of Canadians who recently exited the workforce say they moved up their retirement date, according to a poll of people aged 55 to 75 for RBC Insurance,” she reports.

Thirty-four per cent of those responding to the RBC survey said they “left their jobs earlier than planned” due to the pandemic, the article notes. “Another 30 per cent of those who haven’t yet made the leap to retirement says they’re planning a change in date, either sooner or later, thanks to the pandemic,” her report adds.

But, the article notes, there’s a problem – retirement is getting pricey.

“One in four said they’ve ended up spending more than expected, and 41 per cent said they’ve been hit with surprise expenses, including expensive house repairs and rising costs of health care and transportation, or having to provide unexpected financial support for family,” Wells writes.

Meanwhile, she adds, “inflation hit 6.7 per cent in March from the same time last year, the highest gain since January 1991, bringing sticker shock for consumers at the gas pump and grocery store.”

Since then, inflation has continued to climb, reports Wells, and the Bank of Canada hasn’t ruled out further rate hikes to try and combat inflation.

With those newly retired reporting higher costs, will soon-to-be-retired workers try and hold on to their gigs?

“The events of the last two years are clearly affecting Canadians — including those nearing retirement,” states Selene Soo, director of Wealth Insurance and RBC Insurance, in the article. “And with the current high inflation rate added to the mix, many are feeling concerned about their purchasing power and increasing expenses.”

Inflation is a worry for 78 per cent of those surveyed by RBC Canada, the article notes. Statistics from a C.D. Howe Institute study, authored by noted retirement expert Bob Baldwin, show that house prices have doubled in the last 20 years. As well, the study (cited in the Post article) notes, retirement assets (registered retirement savings plans, tax-free savings accounts, and workplace pensions) have jumped to $158,000 on average, more than twice what they were in 1999, there’s still concern out there.

A shocking 25 per cent of those aged 45 to 64 have no retirement assets at all, the article notes. Those without workplace pension arrangements tend to have little to no TFSA or RRSP savings, states Baldwin in the Post article.

“These realities suggest that a minority of the future elderly may have trouble maintaining their standard of living in retirement,” he states in the article.

Wells has done an excellent job of pointing out a very serious issue – the growing lack of workplace pensions.

If you are fortunate enough to have a workplace pension arrangement of any kind, be sure to sign up for it and contribute as much as you can. This is especially true if you haven’t planned (or started) to save much on your own for life after work.

If you’re not sure how to go about saving for retirement, the Saskatchewan Pension Plan may be the option you are looking for. You can contribute up to $7,000 annually to SPP, and can transfer in $10,000 more a year from other retirement savings vehicles. SPP will look after the hard work – investing your money in volatile markets – and when the time comes to give back your security badge and parking pass, SPP will turn those savings into income. Check out SPP today!

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Volunteering gets top grades from retirees: survey

So you’ve been a saver, taken advantage of any workplace pension program you have, and have arrived at the finish line – retirement!

But without the need for a commute or transit ride to work, seeing the gang there for lunch and coffee, and then noodling through the day on the way back home, what’s a person to do with all the free time?

According to a recent article in the Financial Post, the answer may be to become a volunteer.

In a recent survey of members of the group ROTERO, the Post reports, “62 per cent of… members agreed that volunteering contributes to the enjoyment of retirement life.”

ROTERO, the article explains, “has been a voice for teachers, school and board administrators, educational support staff and college and university faculty in their retirement. The organization promotes healthy, active living in the retirement journey for the broader education community. Its vision is a healthy, active future for every member of the education retiree community in Canada. Volunteerism is a big part of that.”

Some of the other findings the Post reports from the survey of ROTERO’s 81,000 members are:

• 64 per cent of members volunteer regularly, compared to “the Canadian average for this age group, which hovers at around 40 per cent according to Volunteer Canada.”
• Most who volunteer average 20 hours per month.
• Asked why they volunteer, “members cited things like a desire to give back and make a difference (71 per cent), the social interactions related to the volunteer role (66 per cent) and the chance to make new friends and meet people (60 per cent).”
• A total of 72 per cent of those surveyed said they also volunteered before they retired.

“It gives a sense of purpose, an opportunity to meet and interact with others, and to contribute to the well-being of our neighbours however we can,” states one RTOERO member in the article. Or, as another member put it in the Post piece, “It feels good to help.”

Save with SPP has been embedded among the retiree population since leaving full-time work eight years ago and concurs with the views of the Post article. Most of us, while working, were part of a team and an organization that had some sort of purpose or goal that everyone played a part in. It’s not the same once you log out for the last time, but volunteering can provide you a new set of downs in terms of goals, objectives, teamwork and meeting new people.

If you want to volunteer in retirement, you’ll need to be sure you have enough income to afford to quit working! The Saskatchewan Pension Plan offers you a nice way to save for retirement – or to augment any savings you already have. With SPP’s voluntary defined contribution plan, you can contribute up to $7,000 a year towards your future – and you can transfer in up to a further $10,000 a year from other eligible retirement savings vehicles, such as a registered retirement savings plan. You’ll be amazed how your account balance can grow. Check out this made-in-Saskatchewan marvel today!

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Is working the new “not working” for older Canadians?

Writing for the Financial Post, Christine Ibbotson notes that her own research on retirement in Canada has found that more people than you would think are working later into life.

“According to Stats Canada, 36 per cent of Canadians aged 65 to 74 are still working full-time, and 13 per cent of those aged over 75 are also still working. I was surprised by this finding, and I am certainly not advocating working into your elder years or continuing to work until you die; however, obviously these stats show that a lot of Canadian retirees are not just sitting around,” she writes.

Ibbotson writes that this tendency to keep working past the traditional retirement age of 65 may be because older Canadians want to “feel purposeful.”

“Contrary to popular belief, there is no “right time” to retire and if you are in good health there is no real need for rest and relaxation every day until you die. Retirement was not intended for everyone, even though we now believe we all should have access to it. The 65-year age of retirement was chosen by economists and actuaries when social security was created, when life expectancies were much less than they are now, and only provides a generalized guideline,” she writes.

Continuing to work, she continues, has many added benefits, including “being socially connected, physically active, mentally sharp, and enjoying the benefits of additional revenue.” You may, she writes, have fewer health problems if you continue to work into your later years.

While it’s true that many of us still work part time into our 60s and beyond (raising a hand here) not because we need the money, but because we like it, that’s not always the case for everyone.

Some of us work longer than 65 because we don’t have a workplace pension, and/or have not saved very much in registered retirement savings plans (RRSPs) or tax free savings accounts (TFSAs).

Recently, we looked up the average RRSP balance in Canada and found that it was just over $101,000. The average Canada Pension Plan payment (CPP) comes in around $672 per month, and the average Old Age Security (OAS) at $613 per month (source, the Motley Fool blog).

Ibbotson is correct about working beyond age 65 – we do it because we love the work and the income, but for those without sufficient savings, we may be working because we need the income. If you have a retirement savings program at work, be sure to sign up and take maximum advantage of it. If you don’t a great option for saving on your own is the Saskatchewan Pension Plan.

A personal note here – this writer’s wife is planning her SPP pension for next year. By contributing close to the maximum each year, and regularly transferring $10,000 annually from her other RRSPs, her nest egg has grown to the point where she plans to select one of SPP’s lifetime annuity options. Her first step was to get an estimate of how much per month she will receive from SPP; she has applied for her Canada Pension Plan, and apparently Old Age Security starts automatically when she hits 65 next year.

We’ll keep you posted on how this goes, but it’s exciting for her to plan life after work, with the help of SPP.

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