Tag Archives: Kelley Keehn

Canadians stressed about money, financial buffers can help: FP Canada’s Kelley Keehn

FP Canada recently released their annual 2020 Financial Stress Index. Save with SPP reached out to FP Canada’s consumer advocate Kelley Keehn, a noted financial author and educator, by email to find out about the survey’s results.

Q. Research shows money is number one worry, and that people worry about saving for retirement and debt. Is there a relationship between the two – like, if you are paying down debt you can’t save for retirement, and vice-versa? And maybe also did you find out what people think the consequences are of not having enough for retirement (working forever, a less exciting retirement, etc.)

Yes, money still is the #1 worry. FP Canada’s Financial Stress Index found yet again that people worry more about money than health, relationships or work.

The survey didn’t go into your exact questions, but I can anecdotally state that without a clear financial plan, it’s nearly impossible to figure out complex scenarios like paying down your debt vs. saving for an RRSP (or using the tax deduction to pay down on your debt), etc.  And you’re correct, that the consequences for not having saved enough for retirement means either living with less or working longer.  

Consistent with previous years, in 2020 money is the number one cause of stress for Canadians by a large margin. Money (38 per cent) outranks personal health (25 per cent), work (21 per cent) and relationships (16 per cent) as the top source of stress in Canadians’ lives. This is particularly significant given multitude of non-financial stresses related to the COVID-19 global pandemic.

The 2020 Financial Stress Index also reveals that as Canadians age, they feel less stressed about money – with 44 per cent of 18-to-34-year-olds listing money as their leading concern compared to one-in-four (25 per cent) of those aged 65+.

Q. Putting money aside for an emergency fund is a great idea – we would like to hear a bit more about this, if possible. Are people basically realizing they need to create one for the first time? Or are they moving from having a sort of contingency credit line to having actual savings? We guess it’s because of the pandemic that this is being considered more?

Before the crisis, many stats revealed that 50 per cent of Canadians were just $200 away from insolvency.  I don’t know the current numbers, but one could suggest that it’s much worse now.  And, many people don’t realize that the time to get a line of credit is when you don’t need it (i.e. not after you’ve lost your job). 

A recent Canadian Payroll Association survey revealed that it’s not the amount of income that you earn that reduces stress, it’s the financial buffer that you have.  The problem for younger Canadians is that they haven’t been in their career long enough to save (i.e. student loan debt, getting into a home). 

Q. The financial regrets part is fabulous. We wondered whether “having a better job” might refer to having a job with better benefits (or maybe just better money). We retirees sure wish we had had the brains to try and find a job with a good workplace pension earlier (this writer got such a job in his mid-30s). That sort of thing.

The survey didn’t dig deeper unfortunately.  But people really should think of their career as their fourth asset class. If you’re in a high-risk career like an entrepreneur, your investments should perhaps be less risky.  On the flip side, a professor with tenure likely takes less risk with their investments, but possibly should. It’s essential that your career is part of your financial plan (do you have a pension or not, benefits, etc.)

Q. The number one takeaway from the research – what results surprised you the most, and why?

That Canadians are still not reaching out for help and thus suffering sleepless nights.  We wouldn’t self-diagnose when it comes to our health, nor would we go on a new road trip without the help of Google maps on our phone.  Why do so many Canadians still not reach out to a financial pro like a Certified Financial Planner (CFP)?

We thank Kelley Keehn for taking the time to answer our questions, and her colleague Emma Ninham for setting things up.

Is the Saskatchewan Pension Plan part of your own financial plan? The SPP could serve as your personal defined contribution pension plan, a workplace pension or can supplement any workplace or government pension plans to which you belong. It’s a plan with a long history of successful investing returns at a very low management cost, and has averaged returns of more than eight per cent since inception. Consider checking out SPP as a way to help take the stress out of retirement saving.

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 26: Best from the blogosphere

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

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

Troubles for the poor old boomers continue to mount.

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

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

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

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

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

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

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

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

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

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

Jul 8: Best from the blogosphere

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

Caring for parents hits retirement savings bottom line

New research has found that 14 per cent of Canadians with a living parent “are expecting the impact of helping their parents financially will mean delaying their own retirement,” reports Wealth Professional.

A further 12 per cent say caring for parents will prevent them from paying off debt, the magazine notes, citing research carried out by Leger for FP Canada and Chartwell Retirement Residences.

Other fears connected with parental care include having to take time off work to look after parents (a concern for 13 per cent of respondents), or having to quit work entirely to provide care (a fear for five per cent of those surveyed), the magazine reports.

For sure, having a parent who develops a serious illness and can’t live on their own anymore can throw a wrench in any plan. Is there much that can be done about it?

According to Sharon Henderson, VP of Marketing & Communications for Chartwell, an important thing to do is to talk with the parents about the possibility of a future health downturn.

“One of the biggest concerns we see in retirement living is the avoidance of financial conversations between adult children and their senior parents. This can create uncertainty and prevent proactive planning for support later in life,” she states in the article.

It’s important to go over the potential costs of long-term care, and to be aware of what measures the parents have put in place to help pay for it, the article advises. As well, there are tax credits available if you are acting as a caregiver, the article notes.

As Kelley Keehn of FP Canada notes in the article, “the senior years can be financially challenging, and as a result, many older Canadians turn to family members for support. That can cause a significant financial strain, and as Canadians live longer, that strain will only grow.”

Some great things about retirement

While it’s a safe bet that no one’s retirement will be completely smooth sailing, there are good things about it that we must not lose sight of, reports US News and World Report.

For starters, “a weight is lifted from your shoulders when you quit the rat race,” the article notes. There’s more time for movies and TV. You can try new things, join new clubs, and meet new people. And if you miss the routine of working, you can still do it part-time, the article suggests. There’s loads more time for family and friends, and to “give back” via volunteering, the article notes.

Other ideas include travel, enjoying the “time to do nothing,” and generally doing what you want instead of what others want you to do, the article concludes.

Whether it’s caring for a relative or doing your own thing, retirement is a time of life where you’ll appreciate having money. Sure the government provides some, but if you don’t have a workplace pension, or you want to supplement what it provides, consider saving on your own via the Saskatchewan Pension Plan. You can start small, you can ramp up your contributions as your income increases, and when it’s time to collect your savings you can receive it as a lifetime monthly pension. 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, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22

Have you committed financial infidelity?

My husband and I joke that it would be pretty hard for one of us to make a major purchase without the other finding out because all our accounts are online and both of us “visit” our money frequently. Also, our Capital One MasterCard has an annoying but useful safety feature that generates an email to each of us each time a charge is posted to our account.

However, an online poll conducted by Leger for Credit Canada and the Financial Planning Standards Council (FPSC) earlier this year revealed that 36 % of Canadians surveyed have lied about a financial matter to a romantic partner, and the same number of participants had been victims of financial infidelity from a current or former partner. Furthermore 34%  of those polled keep financial secrets from their current romantic partner.

Kelley Keehn, a personal finance educator and consumer advocate for the FPSC, which helped create the survey told the Toronto Star that, “Financial infidelity is generally defined as dishonesty in a relationship when it comes to money, but she noted that the term is vague and it requires you (as a couple) to define what that means.”

“If you have separate accounts in your relationship and you both discussed openly that your money is your money and their money is their money, and you’re free to do anything that you want, then spending and saving and not telling the other person wouldn’t be an infidelity,” she continued.

Other survey results reveal that:

  • Participants aged 18 to 34 were more likely to be victims of financial infidelity — at 47% — than those aged 65 and older, at 18%.
  • Gender and income do not play a significant role.
  • 35% of men surveyed and 37% of female participants said they experienced financial deception from a partner.

When asked about the worst forms of financial deception they experienced from a former or current partner, common offences cited were:

  • Running up a credit card without informing a partner.
  • Lied about income
  • Made a major purchase without telling me.
  • Went bankrupt without informing me.

Financial infidelity doesn’t get as much press as the other kind of infidelity but it can destroy your marriage. In fact, a 2014 BMO poll revealed that 68% of those surveyed say fighting over money would be their top reason for divorce, followed by infidelity (60%) and disagreements about family (36%).

Blogging on The Simple Dollar, Trent Hamm offers Ten Red Flags of Financial Infidelity and What to Do About It. He concludes:

Financial infidelity can be overcome, of course, but it requires honest effort from both members of the relationship. Accusations won’t solve the problem, nor will anger. It takes time, it takes communication, and it takes calmness. If you can’t bring those to the table yourself, you are a big part of the problem. Moving forward isn’t about winning or losing. It’s about finding a new direction that works for both of you.”

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Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.