A recent poll by CIBC found that while most Canadians hope to retire by age 61, more than half (57 per cent) worry whether “they’ll actually be able to achieve that ambition.”

As well, a very high percentage — 66 per cent — of pre-retirees surveyed worry “about running out of money in retirement.”

Save with SPP reached out to CIBC to follow up on these results, and got some comments from Carissa Lucreziano, Vice-President, Financial and Investment Advice, CIBC.

Q. Quite an eye-opener to see that two-thirds of people worry they might run out of money in retirement. We wondered if you got any information on the causes of this worry – maybe more people are drawing down a lump sum of money in a registered retirement income fund (RRIF) versus receiving monthly workplace pension cheques? Or is it worry they’ll lose money in the markets? 

A. The rising cost of living is increasing faster than people expected which in turn is impacting many Canadians’ ability to save for retirement and other goals, which has them feeling less prepared for the future and worried about their retirement savings. A recent CIBC poll found that inflation is the top financial concern for 65 per cent of Canadians right now. While inflation is cyclical, many people are thinking, if inflation keeps going up at this rate, it’s going to affect my retirement plan. 

Another reason people may be worried is because they don’t know how much they will need in retirement. One third of Canadians simply hope they have enough to retire, 20 per cent have sat down to run the numbers on their own and only 14 per cent have enlisted the help of an advisor. It’s like going on a road trip without planning a route, of course you’ll be worried about getting lost. 

Given all the factors you need to consider in a retirement plan, it’s best to sit down with an experienced advisor who can map out a strategy that aligns with your goals, your current situation and how you expect your circumstances to change in the future. 

Q. We were interested in the quote in the release about the importance of having a financial plan. Wondered if you could expand (briefly) on what sorts of things should be in a plan – probably it is looking at what future retirement income will be versus expected expenses, and then including the great things listed in the release like travelling? 

A. A financial plan is your big picture, giving you a detailed look at your current financial situation to help you prioritize and manage your short- and long-term goals – like travel, renovations, and retirement. 

The key items that should be included in every financial plan are your income, expenses, net worth, investment strategy, retirement, and estate plan.  

Many advisors use a goal planning tool to build a personalized plan that addresses all your needs, while taking into consideration any “what if” scenarios to see how any major changes might affect your overall plan. What if you buy a cottage at age 55 or gift money to your children at age 75? It is important to understand the financial implications of any big moves before you make them.  

The most important thing to remember though, is that your plan should grow and change as you do. Ideally, you should be reviewing it every year or whenever there is a material change like employment, divorce, marriage or having a child. 
 

Q. It’s interesting that many people are saving for retirement more via Tax-Free Savings Accounts (TFSAs) than by traditional registered retirement savings plans (RRSPs). Wondered if you learned any of the reasons why they preferred the TFSA – tax free income when you withdraw the money? Accessible for emergency spending en route to retirement? Maybe it is not impactful on one’s Old Age Security (OAS) qualification? 

A. Right now, Canadians are prioritizing day-to-day needs over long-term planning. This means, for many, that they are saving more in their TFSA over their RRSP.   

Contributing to a TFSA is a terrific way to save for both short- and long-term goals. A TFSA gives you the flexibility to access money easily and any interest, dividends, and capital gains earned are tax-free. The funds you withdraw from your TFSA also do not count as income, so it will not affect the amount of OAS you qualify for when you are over the age of 65.  

You don’t have to choose between an RRSP or a TFSA.  However, one could give you more benefits than the other depending on your situation. An advisor can help you understand your options and how it fits into your plan.

Q. Finally, what was the one thing that surprised you the most about these results? 

What stood out to me is that most Canadians polled are relying on their best guess for how much they will need to fund their retirement. Only 14 per cent have met with an advisor to run the numbers.  

An advisor can help you get a better understanding of your big picture and put an actionable plan in place, setting you up for success! It may seem overwhelming, but you can get there with the right support. Plus, you will be able to enjoy your next chapter, knowing that you are in a good place financially. Financial wellbeing is so important. 

Our thanks to Carissa Lucreziano and CIBC for taking the time to respond to us!

The Saskatchewan Pension Plan has been helping Canadians save for retirement for more than 35 years. Now, saving for retirement is simpler than ever before. There’s no longer a dollar limit on how much you can contribute to SPP during the limit — you can contribute any amount up to the total of your available RRSP room. And if you are making a transfer into SPP from another RRSP, you can transfer any or all of it — no limit applies. It’s a limitless opportunity for retirement saving! Check out SPP today!

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Canada, unlike France and the U.S., is not dealing with a pension crisis: Keller

In an opinion column for The Globe and Mail, Tony Keller explains why Canada isn’t having a crisis with its pension system like France and the United States are.

In France, he writes, there are protests in the streets and strikes over plans to raise the national retirement age to 64 from 62. In the U.S., he writes, there’s a “quiet… slow motion” crisis as Democrats and Republicans fail to agree on steps to stabilize the U.S. Social Security system.

“The Congressional Budget Office says that unless premiums are raised, the deficit is increased or taxpayers kick in cash, pension benefits will have to shrink 23 per cent by 2033,” Keller writes, noting that the Social Security system “continues to wend its gentle way toward the iceberg.”

There’s no crisis here, he says.

“Canada is not having a pension crisis. You may not have noticed. ‘`Absence of Crisis Expected to Continue Indefinitely, Experts Say’ is not a headline we tend to put on the front page,” he writes.

That’s because actions taken decades ago stabilized our system, Keller explains.

“Back in the 1990s, Canada was headed for a crisis. The Canada Pension Plan (CPP) (and the parallel Quebec Pension Plan (QPP)) had been created three decades earlier, and like most public pensions they were built on a pay-as-you-go model. CPP premiums deducted from workers’ paycheques paid retirees’ pensions, and once you retired, the next generation of workers would pay your pension. The CPP was a chain of intergenerational IOUs,” he writes.

The French and American systems also operate under the “pay-as-you-go” model. But such systems run into problems when there are fewer workers than retirees. Here in Canada, 19 per cent of us were seniors as of 2021; in France it is 21 per cent, Keller explains.

You have to change things up when demographics change, Keller contends.

“In the 1990s, then-Finance Minister Paul Martin and his provincial counterparts chose to face the arithmetic. They gradually doubled CPP premiums, to ensure that promised pensions would be paid, today and tomorrow. To make that possible, a large chunk of premiums now go into a savings account. The Canada Pension Plan Investment Board (CPPIB) manages the growing pile, which at the start of this year stood at $536-billion. Your premiums today partly fund your retirement tomorrow.”

This is a somewhat complex concept, but what it means is that we are still operating a “pay-as-you-go” system, but when we get to the point when there are not enough workers to pay for the pensions of retirees, money in the CPPIB cookie jar will be tapped into until the ratio returns to a sustainable level.

Keller’s article goes on to note that the Old Age Security (OAS) system, which is paid entirely out of tax dollars rather than employer and member contributions, has the potential for problems in the future; its costs keep rising as the senior population grows. One way to save money on OAS would be to increase the so-called “clawback” so only those seniors needing OAS the most would get it.

CPP was intended to supplement the workplace pensions Canadians were supposed to have; increasingly, workplace pensions are becoming less common. And OAS was designed for those who did not work (and contribute to CPP) during their careers. For a lot of people, CPP, OAS and even the Guaranteed Income Supplement are all they have to live on in retirement, and it’s a pretty modest living.

If you don’t have a workplace pension, there’s a great made-in-Saskatchewan solution out there for you — the Saskatchewan Pension Plan. SPP is a voluntary defined contribution pension plan that any Canadian with registered retirement savings plan (RRSP) room can join. Employers can also offer it as a workplace benefit. Contributions made to SPP are professionally invested in a pooled fund at a low fee. SPP grows the savings until retirement time, when options for turning savings into income include a stable of annuities. Check out SPP today!

And there’s more good news! Now, you can contribute any amount to SPP each year up to your RRSP limit. And if you are transferring money into SPP from your RRSP, there’s no longer an annual limit! Saving with SPP for retirement is now limitless!

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The Association for Canadian Pension Management (ACPM) has rolled out a new online course on retirement that will help you up your game when it comes to mastering the topics of retirement saving, and turning those savings into income.

The course consists of six sections, with questions at the end to test your new knowledge. The first section, The Importance of Saving, talks about the importance of making savings part of your financial plan. “Many imagine retirement savings can wait for later,” the course explains, adding that it is far harder to play catch up than to start saving, even a little bit, while you are younger.

Small savings, we learn, can add up due to the “compounding effect” of time — even $50 a month in retirement savings can grow to more than $16,000 in 20 years.

The second section, Individual Registered Savings Plans, looks at registered retirement savings plans (RRSPs), Tax-Free Savings Accounts (TFSAs), the Home Buyers Program and Lifelong Learning Program (these allow you to “borrow” from an RRSP to pay for buying a home or furthering your education) and the new Tax-Free First Home Savings Account.

Ideas expounded on here include how much you should be expecting to live on when you retire — a rule of thumb given here is 70 per cent of your gross, pre-retirement employment income. The course notes that money from an RRSP should be considered to be “deferred income,” since you are able to put it away and grow it tax-free until the time you take it out as future income, when it is taxed.

The Government Retirement Income section walks you through the Canada Pension Plan (CPP), Old Age Security (OAS) and the Guaranteed Income Supplement. The important points raise about CPP is that the benefit it provides it quite modest, with the average monthly after-tax payment ranging in the $700 range. And while OAS is a universal benefit, it can be subject to a partial or even full “clawback” if you earn more than a certain level of overall retirement income.

The Workplace Retirement Savings section walks you through the difference between defined benefit, target, and capital accumulation plans. Defined benefit plans provide you a lifetime benefit based on a formula that takes into account your earnings and years of membership in the plan; benefits are guaranteed. Target is similar, but lacks the guarantee. With a capital accumulation plan, what’s “defined” is usually how much money you and your employer contribute — your income will be based on how well those savings are invested. Examples of capital accumulation plans are defined contribution plans, group RRSPs, and of course the Saskatchewan Pension Plan.

The final sections talk about the critical “transition to retirement” stage, where you really need to know exactly what your retirement income will be and what expenses you will need to cover, as well as “decumulation,” which involves turning the money you have saved in a capital accumulation plan into income, either by withdrawing money periodically or converting some or all of it to an annuity, which provides a guaranteed monthly payout.

Estate planning — a complex topic that we all need to know more about — is also covered off.

ACPM has done a great job here. The ACPM Strategic Initiatives Committee (SIC), of which SPP’s Executive Director Shannan Corey is a proud member, led this project, and a broader financial literacy framework for plan sponsors is in the works. The group feel a national effort towards broader financial literacy is an important project, she notes.

Shannan says that response to the program has been good so far since the course was rolled out late last year, with close to 200 people graduating from the program.

Asked if the course might make its way into school curriculum one day, Shannan says “yes, we have talked about that and a contact of mine who teaches financial literacy for high school seniors is using the course as part of this curriculum.” It would be great, she adds, to see usership of the course expand.

“We feel it is a really great tool, but that it will take time for it to gain credibility and exposure. The financial literacy framework is going to be pretty amazing and should help get broader national exposure too — that one may have broader uptake as it is designed for plan sponsors rather than individuals,” she adds.

ACPM describes itself as “the leading advocacy organization for a balanced, effective and sustainable retirement income system in Canada,” and ACPM member organizations “manage retirement plans for millions of plan members. “

The group believes that “part of having a better retirement system is to provide education to those preparing for and contemplating retirement.”

According to ACPM, the motto for retirement savings is “the sooner the better.”

They state that their online retirement savings course is designed to be of value to all ages. “If you are in your twenties or thirties and just starting your career path, this course is for you.  If you’ve reached the point where you are building your household savings but not yet focused on retirement savings, this course is still for you. And if you’re nearing retirement but haven’t already learned how to manage and accumulate retirement savings, there are still many important lessons to be gleaned here,” states ACPM.

Finally, ACPM notes that many Canadians are not well prepared for the inevitable retirement from work that lies ahead of them.

“Nearly one in five retirees has less than $25,000 in savings and investments while more than half of Canadians do not have a financial plan for their retirement,” the group states. “It is our hope that this course will help you gain an understanding of pensions and retirement savings as you plan for your retirement.”

Many Canadians don’t have any sort of retirement program at the workplace. If you’re in this group, the responsibility for saving for your future retirement is squarely on your shoulders. Fortunately, the Saskatchewan Pension Plan offers a program for any Canadian with unused RRSP room. SPP, which operates on a not-for-profit basis, will invest your savings in a pooled retirement fund managed at a very low group rate. When it’s time to retire, your income options include choosing one of SPP’s lifetime annuity options, which will ensure you never run out of money. Check out SPP today!

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Aim for two-thirds of your retirement income to be guaranteed

There’s a new rule of thumb for retirement planners, reports Nicole Spector, writing for Yahoo! Finance.

While you would need a lot of hands to cover off all the various retirement rules of thumb out there, this one is refreshingly simple. It’s called the “two-thirds retirement plan.”

“With the two-thirds retirement plan, guaranteed retirement income (i.e., Social Security, pensions and annuities) is used to pay for two-thirds of living expenses during retirement. The additional third of living expenses is funded via non-fixed income (e.g., investments and retirement savings),” she writes.

Let’s Canadianize this. With this plan, your guaranteed income, such as money from the Canada Pension Plan (CPP), Old Age Security (OAS) or other government benefits — along with workplace pension income and any annuities you buy — is used to pay two-thirds of your retirement living expenses. The rest comes from other retirement savings, such as money from a registered retirement income fund (RRIF), your Tax Free Savings Account (TFSA) or non-registered investments and savings.

The article encourages readers to “do the math” to see how this idea would work for them.

“Add up the total amount of guaranteed income you expect to receive in a month,” suggests financial coach Michael Ryan in the article. “Next, estimate your monthly living expenses, including everything from housing to food… (and) leisure activities. Multiply your total monthly expenses by two-thirds.”

This sort of estimate, the article explains, is relatively easy to do if you are already retired, but harder to estimate if your golden handshake is years or decades away.

“I tell every person I work with to pretend that tomorrow is their retirement day,” Robert Massa of Qualified Plan Advisors tells Yahoo! Finance.

“If they want to live just like they are living now, they need to pay themselves at least 80 per cent of their regular paycheque in order to maintain their standard of living,” he states.

“From there, they have a basis to work with and then they can start to ask themselves what else they want from retirement and add those costs in. Then you can project forward using inflation and come up with a monthly and annual income goal and work from there,” he adds.

If, after doing the math, you don’t think government benefits will cover off two-thirds of your retirement living expenses, you need to consider finding other sources of guaranteed retirement income, the article adds. This can be done, the article notes, through converting some of your retirement savings to a lifetime annuity when you retire.

The article concludes by recommending that everyone have a good financial plan in the present — this will make us more aware of how and where our income is being spent and what we will need in the future, when we retire. And while two-thirds is a target, the closer you can get to a plan where guaranteed income covers off all of your expenses, the better, the article concludes.

An additional benefit of guaranteed fixed income — you can never run out of it, as it is paid to you for as long as you live.

Having fixed retirement income is an option for any member of the Saskatchewan Pension Plan. When it comes time to convert your savings into income, SPP’s stable of annuities is among your options. You can convert some or all of your savings to an annuity, which will land in your bank account on the first of every month for the rest of your life. Check out SPP today!

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South of the border, near-retirees fear changes to government benefits

Our friends south of the border — those of them who are nearing retirement — are worried that their government-backed Social Security system might not be there for them when they need it.

That was one of the findings of the Allspring Global Investments Annual Retirement Survey; a media release from Allspring walks us through the survey results.

The survey found that retirees with guaranteed sources of income — such as their Social Security, a pension plan, bank account or annuity — have a “more positive outlook on retirement” than those with savings vehicles without guarantees, such as investment accounts, tax-free savings accounts (IRAs) or capital accumulation-style retirement savings accounts. Those who have not yet retired, the media release notes, worry about the solvency of the Social Security system.

Another finding that may resonate with Canadians as well was the idea that American retirees are concerned about “drawing down retirement (funds) tax-efficiently.” More than half of those surveyed hired an advisor to help with tricky taxation related to receiving Social Security and Medicare, and 71 per cent say they want to learn more about taxation.

One of the most eye-opening findings was that “you either reach your savings target, or you don’t.”

“The survey found that a retirement savings plan can help keep workers on track, but it represents several assumptions,” Allspring’s media release states. “Retirement expenses vary widely, while many retirees participate in part-time work and others stop working earlier than expected. Many will adjust their spending—by force or by choice.”

In plainer terms, your retirement spending must align with your new (and usually lesser) retirement income. You can’t sustain a system where you spend more than you take in.

The Allspring research draws a rather surprising conclusion from this, noting that “each year of early retirement before 65 significantly increases the chance of running out of money in retirement,” but also that “even working 10 hours a week after 65 significantly decreases the risk of running out of money in retirement.”

Among the conclusions of the research was that “women, African Americans and Hispanics” are experiencing a wealth gap. “The financial services industry needs to do better in serving these groups,” the media release notes, adding that only 69 per cent of women (versus 87 per cent of men) are “confident their savings will last.” As well, the release states, African Americans generally were more impacted by the pandemic and now expect their retirement will be delayed by two years.

The article makes the point that those with guaranteed income have a more positive outlook. Here in Canada, the chief retirement benefits (Canada Pension Plan and Old Age Security) are lifetime benefits. But if the rest of your income is being drawn down from a registered retirement income fund (RRIF), or you are living off savings, the risk of running out of money is certainly possible.

A solution available to members of the Saskatchewan Pension Plan is the annuity. SPP offers several different types, but all of them will result in a monthly payment that you’ll receive on the first of every month for life. It’s an option worth considering for some or all of your SPP savings when you reach the “time to collect” stage. Check out SPP today!

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Do pension protests in France send a message about retirement saving?

As protesters fill the streets of Paris, demanding that a plan to start government pensions two years later be dropped, some observers are saying the situation underscores the need for us all to be more self-reliant with retirement saving.

A report by Global News states that “retirement as a concept is changing, with people in Canada and elsewhere having to rely on themselves more than they ever have.”

First, the article notes, the fact that France is moving the retirement age forward (two years later) is a bit of a red flag.

“A lot of times a country will move those ages forward because they feel they don’t have the resources to pay the pension obligations that they’ve set the system up for. And the idea that your country can’t afford to pay you is something that makes people very nervous and understandably so,” certified financial planner Millie Gormely tells Global News.

Even Canada’s “wonderful” government retirement system can see benefits changed, Gormely warns in the article.

“I think retirement as a general concept is changing a lot. The idea of leaving school when you’re 19 or 20 years old, you go work in a factory, you stay there for 30 years, they give you a gold watch and a pension, and then you sit on the front porch whittling for a few years until you die. That’s just not the norm,” Gormely states in the article.

Workplace pensions, according to Statistics Canada aren’t available to every worker. Stats Can notes that as of 2019, 4.3 million Canadians were covered by defined benefit plans (where the payout amount is pre-determined), 1.2 million were in defined contribution plans (where what you pay in is pre-determined), and 9.6 million belong to “other” arrangements. Since there are 39 million Canadians, these stats suggest that there are millions of us without any workplace pension arrangements.

Retiring and getting the Canada Pension Plan (CPP) and Old Age Security (OAS) is great, but those government benefits don’t pay a whole lot. As of 2021, reports The Motley Fool Canada the CPP pays a maximum of $1203.75 monthly — but the average payment is $635.26. The OAS as of that date was $635.26 per month.

“It’s not that much money. And if that’s the only money that you have, you’re going to have a hard time, so, if anything, that underscores how important it is for people to be preparing for their retirement outside of what they can expect from the government,” Gormely states in the article.

“Saving up your own money to take care of yourself in the future is going to be very important for those of us who don’t have company pensions. And for younger people, especially, the sooner you start, the better off you’ll be,” she concludes.

If you don’t have a workplace retirement savings program, and are saving on your own for retirement, the Saskatchewan Pension Plan is a resource you should be aware of. SPP lets you contribute up to $7,200 a year towards your retirement — and best of all, the funds you set aside are locked-in, meaning you can’t raid that piggy bank until it’s time to retire. Find out why thousands of Canadians have made SPP their go-to for retirement saving!

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Article warns of five “myths” about retirement

Writing for Kelowna’s Castanet blog, Brett Millard examines what he describes as five top “myths” about retirement.

The first such myth, he writes, is the belief that “the cost of living will be lower in retirement.”

Canadians may think “their income needs will be much lower once they stop working. After all, they won’t have those commuting costs or need to make mortgage payments,” he writes. But, the article notes, travel costs are likely to increase for the newly retired, and “plenty of Canadians have debt in retirement.”

Those of us retiring with debt are facing rising interest rates, which will “have an impact on your disposable income,” the article continues. We may also have to help struggling adult children, the article points out.

Finally, longevity — living longer — can impact your bottom line, the article notes. The longer you live, the more you’ll need to pay towards “in-home care, a care home, or renovations to make your home more accessible.”

The next myth, Millard writes, is that “registered retirement savings plans (RRSPs) are a complete retirement plan.” The article points out that RRSP income is not usually sufficient for all one’s needs, noting that most Canadians will be counting on other sources, such as “the Canada Pension Plan (CPP), Old Age Security (OAS), company pension plans, Tax Free Savings Accounts,” and such sources as non-registered investments or income from rental properties.

“RRSPs are one part of an investment plan, but a real retirement plan also includes estate planning, life insurance and tax efficiencies,” Millard’s article advises.

The next myth is that “one million dollars is enough for retirement.”

Millard writes that for a variety of reasons — such as when you start your retirement, and what other sources of retirement income you have — setting a target of $1 million might not be right for you. “The amount that any investor will need when they retire will depend on a whole array of variables, with the target amount being unique to each person,” the article notes.

Lifestyle, the activity level of your retirement, possible inheritances — these all factor into determining how much you actually need to save for retirement, the article explains.

The final two myths are that “retirement plan portfolios should be conservative,” and that you should “never carry debt into retirement.”

On the first point, the older “conservative” investment idea was based on assuming a shortish retirement, the article says.

“Now, Canadians could realistically expect their retirement to last 25 years or longer. Retirement portfolios that need to support you for this many years aren’t going to experience significant growth if they’re made up exclusively of fixed income. A conservative retirement portfolio runs the risk of running out of money,” the article notes.

The “no debt” rule, the article contends, “is not realistic or practical” these days, as “close to half of Canadians carry some sort of debt.” Instead, the article suggests, work on paying down high-interest debt from credit cards, which the article describes as bad debt.

The overall message in this well-written piece is that there’s a lot of factors to consider when thinking of retirement, so rather than going by “myths,” you may want to consult a financial planner.

The government benefits most of us receive in retirement — CPP, OAS, and even the Guaranteed Income Supplement — are paid for life, and therefore cannot “run out.”

Yet many people who have RRSPs choose to continue investing them in retirement via a registered retirement income fund (RRIF), rather than choosing to convert any of their savings into income via a lifetime annuity.

If you’re a member of the Saskatchewan Pension Plan, you have the option, at retirement, to convert some or all of your account into an annuity. That way, you’ll never run out of retirement savings in the future. Check out SPP today!

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CPP benefit seen as modest in an environment where many lack workplace pensions

Writing in The Globe and Mail, David Lawrence provides a reality check for those of us thinking federal retirement benefits will cover our retirement costs.

He notes that the maximum benefit available from the Canada Pension Plan (CPP) for a new recipient in 2022 is $1,253.59 per month. But worse, not everyone gets the maximum — Lawrence writes that the average CPP payment this year is a mere $727.61 per month.

The traditional “three pillars” of Canadian retirement, he writes, are changing. While government pensions like CPP and Old Age Security (OAS) provide one pillar, and personal savings another, the third is pensions, which Lawrence says are not generally accessible to those who are self-employed or working on contract.

In fact, many people just don’t have a workplace pension, the article notes.

“While it used to be that clients were maybe worried that their pension wasn’t going to be enough, over the past 15 years we’ve encountered more clients who simply don’t have a pension [through their employer],” Tom Gilman, senior wealth advisor and senior portfolio manager with Gilman Deters Private Wealth at Harbourfront Wealth Management Inc. in Vancouver, tells the Globe.

Those who do have a pension are “more confident” about their retirement cost of living than those without, Gilman states in the article.

He also tells the Globe that your personal “income tax profile” should help you decide whether a registered retirement savings plan (RRSP) is a better retirement savings vehicle for you than the usual alternative, the Tax Free Savings Account (TFSA). Some people need the tax deductions associated with an RRSP more than others, the article explains.

Those who are going to live off their investments need to think about how best to structure their portfolio, states Laura Barclay of TD Wealth Private Investment Counsel in Markham, Ont., in the Globe article.

“For her, the holdings that best mimic a pension plan with stable, long-term payments are high-quality, blue-chip dividend-paying stocks,” the article notes.

Barclay tells the Globe she advises her clients to look for “high-quality companies… with growing earnings,” and that also pay dividends. Diversification is also important, she states in the article.

Harp Sandhu, financial advisor with the Sandhu Advisory Group at Raymond James Ltd. in Victoria, tells the Globe he takes a “tortoise” approach with his own retirement investments — “slow and steady wins the race,” the article notes.

If you are starting to save for retirement while older, don’t pick risky investments with high returns in the short term to try and catch up, Sandhu tells the Globe. Things can go wrong with such investment choices, he tells the newspaper.

If you ever have an opportunity to join a pension plan or retirement savings arrangement through work, be sure to join, and contribute as much as you can. When retirement savings is a deduction from your paycheque, you’ll quickly forget about it and will be happy, when you retire, that you’re getting more than just standard government retirement benefits.

If there isn’t any retirement program available for you, perhaps because you work on a casual or contract basis, the Saskatchewan Pension Plan may be of interest. Any Canadian with available RRSP room can join. If you have bits of pieces saved in multiple RRSPs, you are allowed to consolidate them within the SPP — you can transfer in up to $10,000 per year. Check out SPP today — it may be the retirement solution you’ve been searching for!

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We’ve reached that age — early 60s — where we have as many friends and family retired as working. The age-old question posed to us by our younger contacts is simple: what’s it like to be retired, and to not be working?

Well, first off, the only folks we know who are fully retired — meaning, living off a pension and/or retirement savings — tend to be a little older than us. We have an old friend, Bob, who was able to retire at 55 with a workplace pension and told me he has played lots of guitar, golfed, travelled, and apart from being a course marshal in return for discount rounds, has not worked a lick in retirement. He told me he took his Canada Pension Plan (CPP) the month he turned 60. “Why leave money on the table,” he asks.

A couple of golf buddies, who are around the same age as us, are still working away without plans to retire until their 70s. One has lots of savings so the transition won’t be that big a deal, the other doesn’t have savings but can collect a federal government pension and hopes to continue working as a consultant. So, no specific plan to exit the workforce in the here and now, but a general directional plan for five or six years out.

The eldest great-grandma in our tribe is living happily off her savings in a retirement apartment, and has taken up new hobbies and games, and met new friends, while rolling along in her early ‘90s. She is able to collect Old Age Security.

The folks we know around the ‘hood are largely retired government employees or teachers, either living on their own pension or on a survivor pension. Most are doing well and a number of them (enviably) are wintering in sunnier climes.

Apart from one dog-walking friend who retired, ran out of savings, and went back to work, no one we know complains about having a lack of retirement income. This is interesting, since this writer spent much time doing communications support on research about this particular topic.

We don’t find people complaining about their workplace arrangements or government pensions, other than to occasionally grumble that the inflation increase wasn’t very much.

Things fellow retirees have warned us about are coming true:

1. Understand the rules about CPP survivor benefits — you won’t receive your partner’s full CPP entitlement upon their death, but may get topped up to what they were getting. Factor this reality into your income planning.
2. The trickiest part of having multiple streams of income is taxes, and you won’t always be able to offset your tax bill through contributing to a retirement savings program. Figure out a plan for the taxes on your income, even if it is having more taken off at source.
3. A good trick, if you have a registered retirement income fund and must withdraw from it, is to take any money you don’t need and contribute it to a Tax Free Savings Account. Many of our friends say their kids are using TFSAs as a primary retirement savings tool to avoid having their future retirement income taxed. Good for them!
4. Our late Uncle Joe sold his house and then moved into a condo before his early 70s. He then downsized from the condo to a seniors’ apartment. When he went to his reward, there was no house to sell and the related problems, and all his belongings were relatively easy to pack up and distribute. Joe always lived on 90 per cent of what he made, which is also very good advice.
5. If you aren’t doing something other than watching the news, you will have a short retirement. Join new things, meet new people, try something you haven’t, and good times may follow.

The final thing we’ve learned is that worrying about things doesn’t help anyone. On our local news recently, a 111-year-old veteran said his advice was to be happy, and that “if you have a problem, get it fixed” rather than worrying about it. We’ll take his word for it and try to live his example.

The CPP and OAS programs are great, in that they retire you with a basic retirement income, probably enough for core expenses. If you don’t have a workplace pension to augment that government layer, take a look at the Saskatchewan Pension Plan (SPP). SPP has been building retirement futures since 1986, and can help you start saving for the days when work is a memory. Check them out today!

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Canadians “retiring in droves,” with nurses and truckers leading the way

For decades, economists and pundits have predicted that a “grey tsunami” of boomer retirements would cause all kinds of collateral damage, such as increased healthcare costs and hikes in government spending on things like Old Age Security.

Well, according to Reuters, we may be about to find out if those decades-old predictions might come true.

The Reuters article calls it The Great Retirement.

“Canada’s labour force grew in August, but it fell the previous two months and remains smaller than before the summer as tens of thousands of people simply stopped working. Much of this can be chalked up to more Canadians than ever retiring,” the Reuters article reports, citing data from Statistics Canada.

And, the article continues, it’s not so much older Boomers who are hitting the silk on work, but “a record number of Canadians aged 55 to 64” who have retired in the last year.

“That is hastening a mass exodus of Canada’s most highly skilled workers, leaving businesses scrambling, helping push wages sharply higher and threatening to further drag down the country’s sagging productivity,” Reuters adds, citing the views of economists.

“We knew from a long time ago that this wave was coming, that we would get into this moment,” states Jimmy Jean, chief economist at Desjardins Group, in the Reuters article. “And it’s only going to intensify in the coming years.”

“The risk you have, and in some sectors you’re already seeing it, is that people are leaving without there being enough younger workers to take over. So there’s a loss of human capital and knowledge,” Jean tells Reuters.

Another slightly alarming stat revealed in the Reuters piece is that those of us who are still working are older, with one in five Canadian workers being age 55 or older. So there are many, many more workers who are entering the retirement zone.

So who specifically is retiring? Reuters says nurses and truckers are leading the way to the exits. An eye-popping 34,400 folks have retired from healthcare jobs since May, the article reports, and the Ontario Nurses’ Association’s Catherine Hoy says many of these retirements were unexpected.

The pressure on healthcare workers, particularly nurses, was intense during the pandemic – and the same is true for truckers, the article notes.

Older truckers – who, like nurses, were crucial workers during the early pandemic years – are leaving the profession, creating vacancies and a huge demand for new blood in the field. Many truckers are hired right after completing their training, the article notes.

“Without trucks and people to drive trucks … goods will sit at ports and in warehouses as opposed to getting to the destination where they can be consumed,” warns Tony Reeder of Trans-Canada College in the Reuters article.

This is a very revealing article. We have noticed that almost everywhere we go, help wanted signs are out. As well, you see certain places – local restaurants are an example – that have cut back their hours due to a lack of staff. It will be very interesting to see how this wave of Boomer retirements plays out – hopefully it will create the chance for better jobs for younger people.

You can’t, of course, contemplate retirement without having some sort of plan to finance your golden years. There are many ways to save, including workplace pension programs, but not every Canadian has access to a pension. If you are looking for a way to save on your own for your work-free future, take a look at the Saskatchewan Pension Plan. It’s available to any Canadian with registered retirement savings plan (RRSP) room.

With SPP, you can contribute any amount you want (up to $7,000 per year), and you can transfer up to $10,000 from other RRSPs into SPP. SPP’s role will be to grow your savings for you via low-cost, pooled investing. And once you’re ready to escape the work world, SPP has several options for your retirement income needs, including the chance of getting a lifetime monthly annuity payment. Check them out today!

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