Jul 23: Best from the blogosphereJuly 23, 2018
A look at the best of the Internet, from an SPP point of view
Actual retirement savings lag even our own targets
Canadians think they should be putting away 14 per cent of what they make for their retirement. Only problem is, the same research found that on average Canucks are saving 12 per cent.
These numbers come from recent international research, conducted by Schroders, published in Benefits Canada magazine. The article found Danes were the only nationality surveyed who put away more than they think they need to save – 13 per cent savings versus a target of 12 per cent. While Canadians undersave by two per cent, Chileans, who figure they need 19 per cent savings but put away 13 per cent, have an even bigger savings gap.
Worse, the survey found most people underestimate what they will need in retirement for basic expenses. The article notes that Canadians think they will spend 42 per cent of savings on basic living expenses, but in reality, the figure is closer to 59 per cent.
“There is a real danger that people globally are underestimating the proportion of their retirement income that will need to be allocated to basic living expenses and the amount of money they will need to live comfortably in retirement, particularly in the current environment of low returns and increasing inflation,” states Lesley-Ann Morgan, global head of retirement at Schroders, in the article.
Have you done this math? If you’re thinking now that you are not putting away enough for retirement, consider joining the Saskatchewan Pension Plan. If you’re an SPP member and in the same boat, why not ramp up your contributions a bit? Better to be an oversaver than an overspender – at least according to the research!
The simplest retirement plan ever?
An article from Reuter Benefits boils retirement down to three thoughts.
First, the article notes, select the age when you want to retire. When you are at that age, the article then asks, add up your expected expenses. Then add up your expected income from all sources. If you have more expected income than expected expenses, you are good to go.
If you are not good to go, then you need more savings and less expenses. The article also recommends the use of a financial planner to help you finalize your plans.
|Written by Martin Biefer
|Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22|