Statistics Canada

Why we struggle to save – and what we can do about it

August 12, 2021

We are routinely encouraged to save money, for retirement, for education, for emergencies, and so on.

But this advice is not always easy to follow. Save with SPP took a look around to see why saving is such a struggle, and to find out ways those who aren’t currently savers can work their way into the savings habit.

A study carried out by the Organization for Economic Co-operation and Development (OECD), and reported upon by the CBC, found that on average, Canadians saved “just 3.21 per cent of their disposable income in 2020, or about $1,277 per household.”

Americans, the article notes, save three times as much. Why?

“Canadians are currently spending more of their income to service their debts than Americans, which partly explains the lower savings rate,” says BMO senior economist Saul Guatieri in the CBC article.

And indeed, according to Statistics Canada, household debt topped 177 per cent of disposable income by late 2019, up from 168 per cent the year before. In other words, for every dollar we earn, we owe $1.77, on average. The same agency’s research found that 73.2 per cent of Canadians “have some sort of outstanding debt, or have used a payday loan at some point in the last 12 months.” Almost one-third of those surveyed told Statistics Canada they have too much debt.

The CBC article also cites the increased cost of living as a factor. Shannon Lee Simmons, a certified financial planner, tells the network that “she’s seen the amount of money Canadians are able to put away decrease for a number of reasons, including stagnating wages and the rising cost of necessities like gas, groceries, daycare and housing.”

Housing costs have bumped up to 45-50 per cent of take-home pay for some, she tells CBC.

Inflation, reports Reuters, is on the rise, and “the Bank of Canada said inflation was expected to remain at or above three per cent… for the rest of 2021.”

Blogger Jim Yih of the Retire Happy blog adds a couple of other factors. The lack of formal financial education, he writes, and the prevalent “consumption attitude” of “spending money we do not have” are a big part of the problem. He also notes that interest rates for savings accounts have been at historic lows for many years, which discourages some savers.

So what can be done?

  • Start small, suggests Simmons. “I would rather someone save a little bit than just give up altogether because they feel the goal is too unrealistic,” she tells the CBC. Having a budget is a key step as well, she says, as you can not only track spending but see opportunities to reduce costs.
  • Review your bank fees, and see if you can find a bank with lower or no fees, suggests the Canada Buzz blog.
  • Pay yourself first, advises Alterna Bank. “Automate your savings… transfer the funds to a savings, investment, registered retirement savings plan or tax-free savings account,” Alterna suggests.

The last step is a great one. Even if you did a “pay yourself first” and put one or two per cent of your pay into savings, and then lived on the 98 per cent, you would see those savings begin to grow over time. And while it may not be the “save 10 per cent, and live on 90 per cent” rule that our late Uncle Joe hammered into us over the years, you are starting on the right road. Patience and being steadfast can get you there.

The Saskatchewan Pension Plan supports a “pay yourself first” strategy. You can set up automatic contributions from your bank account each payday. The money you contribute is then carefully invested by SPP for your future. It’s a “set it and forget it” way to build retirement security, something SPP has been providing for more than 35 years.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


APR 12: BEST FROM THE BLOGOSPHERE

April 12, 2021

Canadian millennials now focused on long-term saving: report

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

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

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

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

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

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

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

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

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

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

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

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

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

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Debt – a problem that takes the shine off your golden years.

March 18, 2021

There’s an old saying that the only certainties in life are death and taxes. You could almost add a third category – debt – to that list, and Canadian seniors are dealing with more late-age debt than ever before.

Statistics Canada figures show that in 2019, “Canadian household debt represented 177 per cent of disposable income, up from 168 per cent in 2018. That means the average Canadian household owed $1.77 for every dollar they earned.

The same report found that while seniors are doing better with debt than those under age 65, a surprising 22 per cent say they are “struggling to meet their financial commitments.”

Similarly, reports the Financial Post, research from debt agency Equifax “found the average debt, not including mortgages, of Canadians 65 and over was $15,651 in the second quarter of 2017, still low compared to the Canadian average of $22,595. But senior debt grew by 4.3 per cent over the past year, outpacing every other segment of the population over 18.”

South of the border, the problems are similar. According to Forbes magazine, “the percentage of elderly households—those led by people aged 65 and older—with any type of debt increased from 38 per cent in 1989 to 61 per cent in 2016.”

“People who carry debt into retirement, especially credit card debt, confront more stress and report a lower quality of life than those who do not,” the Forbes article notes.

Debt relief expert Doug Hoyes of Hoyes & Michalos notes that carrying debt into your senior years will almost certainly be a struggle.

He writes that there are “many reasons why people carry debt beyond their 50s, and into their 60s and even 70s,” and he adds that it is “unrealistic to think it’s as simple as seniors living beyond their means.” Contributing factors to senior debt can include layoffs and benefit cuts, the challenge of supporting adult children, and caring for aging parents, he writes.

“Once retired, a fixed income takes its toll, unable to keep up with both debt payments and living costs,” writes Hoyes.

Hoyes says there are some debt warning signs you shouldn’t ignore:

  • Your monthly credit card and other debt balances are rising
  • You can only make minimum payments
  • You use a line of credit to pay the mortgage, rent or other bills
  • You think about cashing in your Registered Retirement Savings Plan (RRSP) to pay off debt

He suggests several courses of action for seniors struggling with debt, such as consulting with a credit counsellor and working out a payment plan, or looking into a government debt relief program for seniors.

Don’t, he warns, tap your RRSP to pay off debt.

“Most registered retirement plans are protected in a bankruptcy or consumer proposal in Canada,” he writes. “We caution people against draining their retirement nest egg if this only partially solves your debt problem.”

Summing it up, while debt is easy to rack up – and we’re all used to dealing with it – it is far less manageable when you’ve left the workforce and are living on less. If you can’t pay off all your debts before you retire, at least pay off as much as possible – your retired you will thank you. Did you know that the Saskatchewan Pension Plan offers you a way to turn your retirement savings into a future income stream? By choosing from the many different SPP annuity options, you are assured of that income in retirement, no matter how long you live. That can be very helpful if you have debts to pay off along the way.

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.


Jan 4: BEST FROM THE BLOGOSPHERE

January 4, 2021

Seniors – many lacking pensions and facing depleted savings – struggle to find work

Many of us of a certain vintage – say boomers in their late 50s and early 60s – plan to work as long as we can before entering retirement.

But a report by the Globe and Mail suggests that these days, as we recover from the pandemic, jobs for older workers aren’t as easy to come by as they may once have been.

“As we survey the damage from the COVID-wrecked economy, we may find that the employment prospects for older workers are getting thin just as the supply of mature job-seekers starts to climb,” writes the Globe’s Linda Nazareth.

First, she explains, things have changed for older workers.

“The old model of work, with the notion of leaving with a gold watch and a pension for life, is over. According to Statistics Canada, 52 per cent of the employed population was covered by a pension plan in 1977, a figure that had fallen to 37 per cent by 2018. Making up the difference with private savings does not always work out, and 2020 has offered a stark reminder that volatile markets, recessions, job losses and illness can wreak havoc on the best-laid plans,” she writes.

So, she notes, without pension income or savings, the other option is to keep working.

“No surprise, then, that the labour force participation rate (the percentage of the population either working or looking for work) of those aged from 55 to 64 has been trending higher for years, climbing from 63.6 per cent in November, 2010, to 66.6 per cent in November of this year,” Nazareth writes.

The rub, unfortunately, is that the kinds of jobs older workers are now holding down may not be there once the “K-shaped recovery” is fully underway, Nazareth explains.

“Many will be caught in the sectors and occupations that find themselves in the downslide of the K, including occupations in the struggling hospitality sector, but also those in a wide swath of manufacturing and services. Automation and a competitive global economy were already taking things in that direction but picking up the pieces after the pandemic will only make things worse and increase the potential for a spate of very-much involuntary unemployment,” she warns.

She concludes the article by hoping that a full economic recovery will lead to new types of jobs to aid the older workers in their job search.

In the U.S., reports Forbes magazine, it’s a similar situation.

The unemployment rate among workers 65 and older was an alarming 10.8 per cent, the article reports. Worse, it’s lower-income workers who are most affected, the article explains.

Writer Christian Weller concludes that there are basically two camps in the U.S. “Some could glide towards a comfortable retirement after working at good wages and saving enough during the preceding years. Others were left to fend for themselves as jobs became scarce and health risks became widespread since they had too little in wealth to weather the multitude of emergencies and start retiring earlier than planned. The pandemic starkly illustrates the massive retirement gulf that epitomizes the U.S.’s aging society.”

So let’s sift through this. Basically both authors are saying that older citizens with a pension or retirement savings to fall back on are doing better than those without, and that finding and keeping a job when you’re older may not be a slam dunk.

What can we do about it if we aren’t older? Saving for retirement seems a good way to cushion your future self against shifts in the job market. If you are fortunate enough to have a pension at work, be sure you are maximizing your contributions to it. If not, you’ll need to be self-reliant, and build your own retirement nest egg. A good place to start the savings journey could be the Saskatchewan Pension Plan, celebrating its 35th year in 2021. Check them out today!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Oct 19: BEST FROM THE BLOGOSPHERE

October 19, 2020

Watch out for these 20 mistakes retirement savers are making

The journey between the here and now of work, and the imaginary future wonderworld of retirement, is a peculiar one. We all imagine the destination differently and no one’s super clear on the route!

The folks over at MSN have a great little post about 20 pitfalls we need to avoid on the retirement journey.

The first, and probably most obvious pitfall, is “not having enough savings.” The blog post notes that “32 per cent of Canadians approaching retirement don’t have any savings,” citing BNN Bloomberg research. “Middle-aged and older Canadians should start saving as early as possible,” the post warns.

If you’re already a saver, are you aware of the fees you are paying on your investments? “High fees can eat up huge amounts of your savings over time if you’re not careful,” the post states.

Many of us who lack savings say hey, no problem, I’ll just keep working, even past age 65. The post points out that (according to Statistics Canada), “30 per cent of individuals who took an early retirement in 2002 did so because of their health.” In other words, working later may not be the option you think it is.

Are you assuming the kids won’t need any help once you hit your gold watch era? Beware, the blog says, noting that RBC research has found “almost half of parents with children aged 30-35 are still financially subsidizing their kids in some way.”

Another issue for Canucks is taking their federal government benefits too early. You don’t have to take CPP and OAS until age 70, the blog says – and you get substantially more income per month if you wait.

Some savers don’t invest, the blog says. “While it may seem risky to rely on the stock market, the real risk is that inflation will eat up your savings over time, while investments tend to increase in value over long periods of time,” the MSN bloggers tell us.

Raiding the RRSP cookie jar before you retire is also a no-no, the blog reports – the tax hit is heavy and you lose the room forever. Conversely, there are also penalties for RRIF owners if they fail to take enough money out, the blog says.

Other tips – expect healthcare costs of $5,391 per person in retirement each year, avoid retiring with a mortgage (we know about this one), be aware of the equity risks of a reverse mortgage, and don’t count on your house to fully fund your retirement.

The takeaway from all of this sounds very straightforward, but of course requires a lot of self-discipline to achieve – you need to save as much as you can while eliminating debt, all prior to retirement. And you have to maximize your income from all sources. That’s how our parents and grandparents did it – once there was no mortgage or debt they put down the shovel and enjoyed the rest of their time.

If you have a workplace pension, congratulations – you are in the minority, and you should do what you can to stay in that job to receive that future pension. If you don’t have a pension at work, the onus for retirement savings is on you. If you’re not sure about investments and fees, you could turn to the Saskatchewan Pension Plan for help. They have been growing peoples’ savings since the mid-1980s, all for a very low investment fee, and they can turn those savings into lifetime income when work ends and the joy of retirement begins.

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.


Oct 5: BEST FROM THE BLOGOSPHERE

October 5, 2020

Canadian savings rate jumps to 28.2%, says Statistics Canada

For decades we’ve been told that Canadians – once known as a nation of savers – had shifted to become spenders.

No more. According to figures from Statistics Canada reported on by U.S. News and World Report, we are piling up the savings these days. The article notes that by mid-2020, Canadians were saving an incredible 28.2% of their disposable income, up from just 2-3% before the pandemic.

“There’s a pot of cash that’s basically sitting there and we’re interested in monitoring where that goes,” states Statistics Canada economist Greg Peterson in the article. “It’s a kind of notable divergence from what we usually see.”

Peterson states in the article that Statistics Canada is curious as to whether Canadians will pay down debt with their stockpile of cash, or spend it on goods and services, which would benefit the re-emerging economy.

Where did the extra money come from?

“Disposable incomes jumped sharply on higher government transfers – namely emergency wage benefits – while household spending fell amid COVID-19 shutdowns,” the article tells us. That seems right. Back in the spring, when the first pandemic-related restrictions began, there wasn’t much to spend money on other than groceries and gas. Things have been slowly improving ever since.

And certainly many Canadians have been counting on the CERB benefit during these months of the pandemic.

Let’s face it; we are in a crisis situation and it’s always good to have a little money in the wallet to help tide you through.

A survey out in early September from Sun Life finds that nearly half of us “feel less financially secure due to COVID-19.”

Forty-four per cent of those surveyed by Sun Life who say their mental health has been affected by the pandemic cite “financial stress as the main factor,” a Sun Life media release notes.

Younger Canadians appear to be the most worried group, the survey finds.

So, putting it all together, we’ve suddenly changed back to a nation of savers, and it’s quite possibly the uncertainty of our recovering economy that’s to blame. While things are returning slowly to a more normal state, there are still people out there who haven’t been able to get back to work – not everything has re-opened, or re-opened fully.

Having a little cash on hand for emergencies makes a lot of sense in this situation.

However, if you are sitting on excess cash for the short-term, consider earmarking a little bit of it for your retirement savings as well. A good place to tuck away a few loonies can be the Saskatchewan Pension Plan. You can set up SPP as a “bill payment” using your online banking website, and direct some of your extra dollars to them, either a little or a lot. With SPP there are no pre-defined contributions; it is up to you to decide how much to chip in. Your future you will thank you for any stray dollars you can send his or her way.

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.


Knowing where our money goes can help us save

November 14, 2019

We talk, often at great length, about ways to save money – to squirrel a little away each month for our life after work.

And while we all seem to wish we could save more, an answer to the question “why aren’t we saving” can be found by looking at where we are spending our cash. Where, Save with SPP wants to know, are our “non-savings” going?

According to Statistics Canada data from 2016, reported on in the Slice.ca blog, Canadians spent an average of $84,489 per household in that year. That’s what they spent, remember, not what they made – most of us spend more than we earn.

The blog reports that Canadians spent the most on shelter – 19 per cent of the total. “In 2016, according to StatsCan, the average Canadian household spent $16,293, or a little over 19 per cent of their total expenditure, on their principal accommodation,” the blog reports.

Next on the list is income tax, weighing in at 18.1 per cent. “They say that the only things that are certain in life are death and taxes. In Canada, $15,310 – or 18.1 per cent – of the average household’s total expenditure went to income tax in 2016,” the blog explains.

The third biggest category is called “private transportation,” our vehicles, which cost us $10,660 per year, Slice.ca notes. The category makes up 12.6 per cent of the total.

Next biggies are food, at seven per cent ($6,176) and “household operations,” which includes phones and Internet — $4,705, or 5.5 per cent, Slice.ca reports. Rounding out the top 10 (Slice.ca actually gives the top 20) are insurance and pension contributions ($5,067, or six per cent), clothing and accessories ($3,371, or four per cent), restaurant dining ($2,608, or three per cent), healthcare ($2,574 or three per cent) and utilities ($2,460 or 2.9 per cent). Savings didn’t make the top 20.

We can’t do much about most of these categories, but some are “non-essential” and could be targeted for spending cuts. If we were to save even 10 per cent of what we spend on vehicles, phones and Internet, clothing and restaurant dining, we’d have a whopping $2,134.40 to add to our retirement savings each year. Saving five per cent would provide a $1,067.20 boost to your savings.

Global News reports that we Canucks “splurge on guilty pleasures.” Citing research from Angus Reid and Capital One, the broadcaster reports that 72 per cent of us “dine out several times a month,” 71 per cent “regularly order takeout,” and half of us buy coffee daily.

MoneySense notes that a lack of personal savings has a variety of negative impacts for Canadians. Citing research from Abacus Data, the publication notes that only 34 per cent of us could “come up with $1,000 right away without borrowing or using credit.”

Debt seems to be missing from these spending stats.

According to the Financial Post via MSM Money  the cost of paying our debts is cutting into our ability to pay other expenses.

“More than half of Canadians say they’re increasingly concerned about their ability to pay debts as disposable income shrank by a fifth since June,” the Post reports, citing data from insolvency practice MNP Ltd.

“Average monthly disposable income after paying bills and debt obligations fell $142 to $557,” the Post reports, adding that “nearly half — 48 per cent — of the 2,002 respondents to the early September poll by market research company Ipsos said they’re left with less than $200 at the end of the month.”

This is a lot of information, but a picture emerges. We’re not, as a rule, planning on saving anything each month. In fact, credit balances are getting so high that many of us can’t cover all our bills without dipping further into debt. We can understand how we might cut back on spending, but we also have to cut back on using credit, too.

We all have the power to cut back on spending and borrowing. That will not only reduce our costs, it will reduce our stress levels. Imagine a future where you have control of all your bills – it’s an achievable dream. And as you get to that desired level of financial freedom, you’ll have more and more money to put away for retirement.

If you’re looking for a place to grow those hard-earned savings, look no further than the Saskatchewan Pension Plan. Be sure to check them out today.

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

May 6: Best from the blogosphere

May 6, 2019

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

Tax-free pension plans may offer a new pathway to retirement security: NIA

With workplace pensions becoming more and more rare, and Canadians generally not finding ways to save on their own for retirement, it may be time for fresh thinking.

Why not, asks Dr. Bonnie-Jeanne MacDonald of the National Institute on Ageing, introduce a new savings vehicle – a tax-free pension plan?

Interviewed by Yahoo! Finance Canada, Dr. MacDonald says the workplace pension plan model can work well. “Workplace pension plans are a key element to retirement income security due to features like automatic savings, employer contributions, substantial fee reductions via economies of scale, potentially higher risk-adjusted investment returns, and possible pooling of longevity and other risks,” she states in the article.

Dr. MacDonald and her NIA colleagues are calling for something that builds on those principles but in a different, tax-free way, the article explains. The new Tax-Free Pension Plan would, like an RRSP or RPP, allow pension contributions to grow tax-free, the article says. But because it would be structured like a TFSA, no taxes would need to be deducted when the savings are pulled out as retirement income, the article reports.

“TFSAs have been very popular for personal savings, and the same option could be provided to workplace pension plans. It would open the pension plan world to many more Canadians, particularly those at risk of becoming Canada’s more financially vulnerable seniors in the future,” she explains.

And because the money within the Tax-Free Pension Plan is not taxable on withdrawal, it would not negatively impact the individual’s eligibility for benefits like OAS and GIS, the article states.

It’s an interesting concept, and Save with SPP will watch to see if it gets adopted anywhere. Save with SPP earlier did an interview with Dr. MacDonald on income security for seniors and her work with NIA continues to seek ways to ensure the golden years are indeed the best of our lives.

Cutting bad habits can build retirement security

Writing in the Greater Fool blog Doug Rowat provides an insightful breakdown of some “regular” expenses most of us could trim to free up money for retirement savings.

Citing data from Turner Investments and Statistics Canada, Rowat notes that Canadians spend a whopping $2,593 on restaurants and $3,430 on clothing every year, on average. Canadians also spend, on average, $1,497 each year on cigarettes and alcohol.

“Could you eat out less often,” asks Rowat. “Go less to expensive restaurants? Substitute lunches instead of dinners? Skip desserts and alcohol?” Saving even $500 a year on each of these categories can really add up, he notes.

“If you implemented all of these cost reductions at once across all of these categories, you’d have more than $186,000 in additional retirement savings. That’s meaningful and could result in a more fulfilling or much earlier retirement,” suggests Rowat. He’s right – shedding a bad habit or two can really fatten the wallet.

If you don’t have a retirement plan at work, the Saskatchewan Pension Plan is ready and waiting to help you start your own. The plan offers professional investing at a low cost, a great track record of returns, and best of all, a way to convert your savings to retirement income at the finish line. You can set up automatic contributions easily, a “set it and forget it” approach – and by cutting out a few bad habits, you can free up some cash today for retirement income tomorrow. It’s win-win.

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

Apr 22: Best from the blogosphere

April 22, 2019

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

Savings – the spirit is willing, but the effort is weak

An interesting new report from Edward Jones is featured in a recent Wealth Professional that suggests Canadians really do place saving on the top of their list of financial priorities.

The study of 1,500 Canadians found that 77 per cent – more than three quarters of respondents – “have prioritized saving.” The story goes on to note that only 44 per cent see paying down debt as their top priority.

So the spirit is willing, as they say, but debt is getting in the way. “The most recent data from Statistics Canada points to a significant debt problem for Canadians, with household levels reaching a record high of 178.5 per cent in the fourth quarter of 2018,” the article reports.

Despite that crippling debt level, when asked, Canadians see retirement saving as their top priority, followed by “funds for lifestyle expenses (like vacations), future family or child’s education, and emergency fund” topping out the top four, Wealth Professional reports.

The article goes on to say that despite those worthy savings goals, 58 per cent of those surveyed admit they have “underperformed” on their savings efforts, with only 12 per cent saying they were on track and have met their savings goals.

Let’s face it. In an era where we all owe about $1.78 for every dollar we earn, it is difficult to do much with our money other than paying down debt. And if we’re only able to make the minimum payment, those debts can take decades to pay off, which is discouraging.

Like most things that we hate having to do – such as losing weight, eating better, hitting the gym – getting out of debt requires patience and self-discipline.

According to the Motley Fool blog via MSN.ca, there are practical ways to turn things around with debt. Their first idea is to stop taking on more debt. “This means committing not to charge any more on your cards until you’ve paid off what you owe,” the blog advises. Having a budget in place will help you live with this new limit on your spending power, the blog notes.

The second step is to try and reduce your credit card interest rate. You can do this, the blog advises, by switching to a lower-interest credit card or via a debt consolidation loan.

Third idea is “to make a debt payoff plan,” the blog says. Essentially, the plan should have you paying more than the minimum on the card each month in order to pay it off more quickly, the blog advises.

Through this hard work of steady debt reduction, be sure to chart your progress, the blog advises.

Debt, like a big ocean liner, takes a long time to turn around. But once you’ve paid off a single credit card, you have extra money to pay down the next. Clearing up your debt will also, once you’ve completed it, allow you to focus on positive savings/spending goals such as retirement planning, vacations, education savings and an emergency fund. The Saskatchewan Pension Plan is a wonderful resource for long-term retirement savings, check out their website 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

Feb 25: Best from the blogosphere

February 25, 2019

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

What if they threw a retirement party, but no one came?

If 70 is the new 60, then it’s possible that the new retirement may be not retiring.

According to Statistics Canada figures quoted in the Globe and Mail, more than half of senior-age men (that’s age 65) were working in 2015, a whopping 53.5 per cent. What’s more, 22.9 per cent of 65-year-old men were working full time.

For women, 38.8 per cent were working after age 65 in 2015, “almost twice the level in 1995,” the Globe reports.

What’s going on?

The story quotes Nora Spinks of the Vanier Institute as saying retirees working into their 70s and 80s “are rewriting what is retirement, and we now refer to it as `career redefinement,’” she explains. She notes that when baby boomers were born, life expectancy was only about age 63. “Fast forward to 2018 and your life expectancy is another 15-20 years,” she says.

Is “career redefinement” simply code for not having enough savings?

Well, maybe. Bill VanGorder, a retired non-profit executive who is back at work after 90 days of retirement, says that his savings, along with those of his wife (neither, the Globe says, had pensions) were negatively affected by the market downturn of 2008. But his new career with a pole-walking venture was made possible, he tells the Globe, due to “the couple’s good health and his desire to build a business based on strong consumer demand for pole walking as a form of low-impact exercise.”

VanGorder calls the retirement at 60-65 idea “an old-fashioned myth,” and asks “why would you want to spend the last quarter of your life doing nothing?”

So it wasn’t about the money. The Globe article, citing data from the Canadian Longitudinal Study on Aging, notes that “only 37 per cent of women and 41 per cent of men said that financial considerations were a factor in their decision” to keep working after age 65.

Perhaps working after age 65 is more about “a person’s state of health and a desire to feel useful and connected to others,” the article muses.

Maybe in 10 years or so, the Globe will run an article about the trend of people retiring in their 80s. One assumes that even those working late into their lives will eventually stop. Save with SPP’s grandfather worked until 75, as did our father-in-law.

If you are planning to keep working until your 70s or 80s, the SPP can be a great resource. You can delay your SPP pension until December of the year you turn 71, rather than collecting it at an earlier age. And starting your pension later normally means you will receive a larger pension than if you had started it early.

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 and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Shelties, Duncan, Phoebe and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22