By Sheryl Smolkin

The discussion about whether or not to buy a home and if home ownership is a good investment rages on, particularly among younger people living in expensive urban areas who may be contemplating the purchase of their first property.

While purchasing property is definitely a huge financial commitment, there is also a strong emotional component in every decision to make an offer for real estate. Even if the house turns into a “money pit,” it’s YOUR money pit and no one can kick you out unless you default on the mortgage.

Sean Cooper, who bought a house at age 27 and paid off his mortgage three years later, believes the home ownership dream is still alive and well. He says, “By being laser-focused on paying down your mortgage quickly, you can reach financial freedom years sooner…..A paid off home gives you choices: you can quit the rat race, travel around the world, start your own business or take a job you truly enjoy.”

On Millennial Revolution, FIRECracker does the math to see if she and her partner The Wanderer would be richer if they bought a house in 2012, instead of investing their $500,000 down payment and renting. Based on Toronto Real Estate Board figures for the period, she estimates she would have made a respectable 7.8% if she sold in 2016. However, expenses like real estate commission, lawyers’ fees, maintenance, utilities and additional furniture would have reduced their profit. so by investing instead of buying, their gains were 2.61 times the gains from the house.

On their very first outing with a real estate agent, Jessica Moorhouse and her husband bought their first place, officially becoming homeowners. They ended up buying a two-story stacked townhouse in Toronto’s west end. “We knew that if we found a place that ticked off all of our boxes and was within our budget, we needed to act fast,” she says. “Places like the one we got do not come around often, and I am seriously so thrilled we’re living in this place!”

Those of you who already live in your own home and want to move up face the classic homeowner’s conundrum: Should you buy first or sell first? The choice depends on the people, the house and the city, realtors say, though there are some constants that hold true for most situations. “If it’s a seller’s market, then you need to be buying first. If it’s a buyer’s market, then you need to be selling first,” Ara Mamourian, broker and owner of Spring Realty in Toronto says.

And once you do own a home (or at least the bank does) the next question you will likely face is Should You Save Money or Pay Extra On Your Mortgage? Bridget Eastgaard’s spreadsheet shows that after 25 years, homeowners who opted to put $5,000 extra into a their TFSA instead of towards their mortgage, would come out $80,000 dollars richer than the person who thought it was worthwhile to put the cash towards his mortgage, just to become debt-free five years faster. Nevertheless, she acknowledges it really only works this way because mortgage rates are so low in Canada.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

And just like that, it’s August! The days are getting shorter and families are starting to think about getting the kids back to school and getting serious about the upcoming round of fall activities.

Those of you sending your kids off to college or university will be interested in The Business of University Fees by Big Cajun Man aka Alan Whitton on the Canadian Personal Finance blog. Did you know if your child is still in school he/she is probably still covered under your group medical plan at work and most universities will allow you to opt out of the university’s plan?

If you have received your first child benefit cheques and haven’t already spent them on back-to-school supplies, here are 3 Great Ways to Use Your Canada Child Benefit Payment  by Craig Sebastiano on RateHub. RESP contributions, TFSA deposits or charitable donations, anyone?

And talking about TFSAs, take a look at Robb Engen’s TFSA Dilemma and Solution on Boomer & Echo. Like many of us Robb has a ton of TFSA contribution room ($50,500) He plans to turn his $825 monthly car payment – which ends in October – into future TFSA contributions, starting in January 2017. That’s $10,000 per year to stash in his TFSA, which at that rate would catch-up all of his unused room by 2027.

Have you reviewed your life insurance lately? Are you and your partner adequately covered so if one of you dies, the other can continue to pay the family bills? Bridget Eastgaard from Money after Graduation says Cash-Value Life Insurance Is For Suckers, Buy Term Instead.

And finally, Should you work part-time in retirement? by Jonathan Chevreau on moneysense.ca includes an analysis commissioned by Larry Berman, host of BNN’s Berman Call and Chief Investment Officer of ETF Capital Management. It illustrates the powerful impact of earning just $1,000 in part-time income each month between the age of 65 and 75; or in the case of couples $2,000 a month between them.

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Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

Today I’m interviewing Bridget Eastgaard for savewithspp.com. Eastgaard blogs on “Money after Graduation,” her financial literacy website for college students and new graduates. She writes about paying off student debt, learning to budget, saving money, and investing for the future. 

She has a B.Sc. and an MBA in finance from the Haskayne School of Business at the University of Calgary. For the last year she’s been a product strategist at Uncommon Innovation. However, in late October she resigned to devote herself to creating new products she plans to sell on her website. Other projected future sources of revenue include speaking engagements and brand partnerships with financial institutions and service providers. 

Thank you for joining me today, Bridget.

Thank you for having me Sheryl.

Q: You live in Calgary, you just quit your full time job in the middle of a provincial economic downturn to devote yourself to developing a risky online business. What made you decide to take the jump?
A: It is pretty dismal here in Calgary right now and it feels a little crazy to take a risk like this, but in all honesty, switching to my own online business isn’t as risky as it looks at first glance. Watching my friends and family members being laid off from jobs – some of them after fifteen or twenty years – I think what’s really risky is relying on a single source of income where your employer can decide, “We don’t need you anymore,” and you’re gone.

Q: So tell me about your blog “Money after Graduation.” When did you start it and why?
A: I started it in 2011 because I graduated from my Bachelor of Science degree in 2010 and I owed almost $21,000 in student loan debt. At the time that was just an astronomical amount of money for me. I never earned more than $10,000 in a year so I couldn’t even fathom how I would pay off that debt. So I started the blog to really track repayments and keep me accountable. 

Q: What do you think are some of the most important lessons about money that young people coming out of school need to learn?
A: How much debt really holds you back. I think I didn’t realize when I borrowed for school and many people don’t realize when they borrow for school how much money that really is. When you’re taking out 20, 30, $40,000 in student loans, that’s 20, 30, $40,000 of your net future income. And I thought, “Oh, well if I just make $50,000 a year, if I make $60,000 a year it will be really easy to pay this off,” and of course I wasn’t accounting for things like taxes, and living expenses. So I think that’s just the general lack of understanding of how little money there really is when you have a lot of financial obligations in adulthood.

Q: How long did it actually take you to pay off that loan?
A: It was pretty fast actually. I was debt free within 22 months.

Q: Terrific. You write about earning more money, paying off debt, and investing to build wealth. How often do you blog and how many hits do you typically get?
A: Now I’m kind of on a pretty relaxed schedule, I’ve taken it down to about once per week. I’ve been crazy busy lately. I got married last month. On days when I post I’ll get as many as 3,000 hits per day, and on days when I don’t post the blog probably gets 2,000 visits a day.

Q: Tell me about some of your most popular blogs.
A: I wrote one that just went viral and it still remains the most popular post on the website. It’s called, “30 financial milestones you need to reach by age 30.” I wrote it at 11:30 one night because I just felt like I needed to get a post and I was in the middle of my MBA and it took off like crazy – totally unexpected – but it’s just a list of financial milestones that you should have in order by the time you turn 30.

Q: What were some of the milestones on the list?
A: Be debt free, check your credit score regularly, start an investing portfolio. Some were really general, some were more specific like I suggested you should save at least $25,000 for retirement by age 30, so it’s a mix of big and small goals.

Q: I see you’ve just completed a 90-day shopping ban. Why did you embark on this project and how has it changed your perspectives about money?
A: So that was actually inspired by my friend Cait Flanders who is the blogger behind BlondeonaBudget.com and she did a one-year shopping ban I was so taken by how much this really changed her – changed her perspective, changed her behavior – it really had a profound effect on her. 

I had done like one month shopping bans in the past and I thought, “Well I’ll try three months this time.” I knew I couldn’t do a year. Part of it is also because I had been planning to leave my job and it’s easier to do that when you have some extra money in the bank. 

And it was also to teach myself to live on a reduced income; because I am pursuing my own online business now, I’m expecting my income will probably go down for the next three to four months.

So it was kind of a test run to teach me how to live with less. It actually had a much bigger impact on me than I expected because I really found that after the first two weeks it was just very easy to live with less and I really don’t need to buy as much as I typically do.

Q: So you have several courses on your website already. The Debt Crusher course is free. Tell me a little bit about it.
A: It’s an eight-module program that I created just to help young people get out of debt. I start with setting a budget, determining your loan repayment, negotiating with your creditors, and actually walk through all the steps that you need to take to pay off your debt. It works if you have a small balance of $5,000 or it works if you have a huge balance of $50,000. I just wanted to create a really solid financial plan for young people who are struggling under the weight of student or consumer debt, so they could have help and a method to get to debt-free.

Q: How has it been received? Have you had a lot of downloads?
A: Oh yes. I think are almost 500 by now. It’s been very popular.

Q: Your “Master Class Money” course is priced at $379 and has twelve modules. What are the goals of the course and how is it structured?
A: That course is the resource I wish I had had when I started investing in the stock market when I was 25 years old. We’re lucky because it has been kind of a bull run for the past almost seven years so I didn’t lose anything, but I didn’t have a strategy. 

There weren’t a lot of resources for young people who want to learn how to invest in the stock market and there are still not a lot of resources for just your average retail investor. It’s really up to the professionals to decide how your money is invested, but a lot of people do want to manage this alone and it is something, I think, everyone should learn and should do. 

So I created the course using my MBA in finance. It really walks the average retail investor through everything from the basics like “What is a stock? What is a bond?” to creating a portfolio based on your investment goals and risk tolerance and it even goes into some more advanced technical analysis. It’s basically a comprehensive resource that gives you the tools you need to start investing in the stock market.

Q: Is it geared only to young people or can people of all ages benefit from the course.
A: Everyone can benefit. I design it primarily for people in their 20s and 30s because they have the longest term investment horizon, but it’s the perfect resource for all ages. 

Q: So how you do market the course and are you pleased with the response to date? Are you on target for projected sales?
A: I haven’t done really aggressive marketing with the course. I’m lucky that I’ve established a presence online over the past almost five years and I have a pretty strong e:mail list so, thus far, I’ve really only pushed it out to my e:mail list and my regular readers. The response to it, honestly, has been so amazing. It was more than I expected. It really what has inspired me to quit my job and go do this full-time.

Q: What other courses do you have on the drawing board?
A: I have a few in mind, but they’re not set in stone yet. I definitely want to develop some resources for people negotiating their salary in their careers because that’s definitely something I feel really passionate about and it’s something that people just don’t know how to do and it’s really scary. I have some other kind of financial boot camp tool kit in the works that I’m developing as well.

Q: What’s your goal in terms of time for generating revenue for your new business comparable to your last full time position?
A: I haven’t thought seriously about that yet. I mean, I’d like to be back to my full-time income within six months and I essentially would love to double my original income with a year. That might be an ambitious goal, but I’m optimistic that if I hustle and work hard it can happen.

Q: What advice do you have for people who want to take control of their own employment and start a business but think they can’t afford to take the leap?
A: Just be sure that taking the leap is not hugely detrimental to your finances. I would never suggest anyone leave their job without a plan. Start your business, make sure it’s generating a little bit of revenue, create a big savings cushion, learn to live on less, and then when you take the leap it’s not going to be as big of a risk.

Q: And where does saving for retirement and a home and all that stuff fall into this business plan?
A: I just set up a fixed amount of savings every month and it’s really important to me to always meet those savings goals regardless of where my income is coming from. You never want to sacrifice your savings to take a risk. I feel that if you set your goals and then you stick to a regular payment plan, it doesn’t really matter where your income is coming from as long as it’s going to the right places.

Q: So are you saving in an RRSP or a TFSA or both?
A: I do both. So I have TSFAs and RRSPs and I’m trying to max out the RRSP but that just seems like a really hard journey when you’re in your 20s.

Q: Thank you very, very much for talking to me today Bridget.
A: Thanks Sheryl.

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This is an edited transcript of an interview conducted in September 2015.

By Sheryl Smolkin

As the old year draws to a close, many people resolve to reduce stress by getting more sleep, working out more often and eating a healthy diet. But for others, the financial pressure of taking from Peter to pay Paul is what keeps them awake at night.

If they could only find ways to get their finances under control and be sure that their family is properly protected, their anxiety level would plummet. If you fall into that category, here are some resolutions you can make to improve your finances, free up cash to save for longer term goals like retirement and give your family more financial security.

1. Write it down: At the end of a month, do you have any idea where your money went? If you tap your credit or debit card each time you buy a cup of coffee, fork over $20 for every baby shower at the office and bring home take-out three days a week because you are too tired to cook, it’s not surprising that your bank account is running on empty half way through the month. Make a note in your phone or on a spreadsheet of every dollar you spend for a month and you will be able to identify money wasted that could be saved instead.
2. Use cash: It may sound old-fashioned, but if you withdraw a set amount of cash each week to cover transit, lunches, coffee, dry cleaning and other miscellaneous expenses, you will spend much less than if you use your debit card or your credit card to pay for every small expenditure.
3. Avoid credit card debt: Credit cards are a wonderful convenience if you pay them off every month and don’t have to pay interest charges. However, if you do accumulate credit card debt you could be paying as high as 20% or more on your outstanding balance which compounds every month. Furthermore, if you do not make minimum payments on the due date, you may lose your “grace period” and interest will begin to mount from the date of purchase of each item.
4. Pay off high interest debt: If you owe money, resolve to pay off high interest debt as soon as possible. In some cases you may be able to borrow money on a lower interest line of credit to pay down higher interest credit card bills. You may also be able negotiate with creditors to accept a fixed amount each month. If you are stressed because of your debts, struggling to make your minimum payments, and need a plan to get your finances back on track, the Saskatchewan Credit Counselling Society provides free, confidential debt solution services.
5. Pay yourself first: Waiting until the end of the month to direct money into savings is not a productive strategy as by then, the cupboard is typically bare. Decide on the amount you want to add to SPP, your RRSP, TFSA or unregistered savings every month and have the funds automatically transferred. After a few months you won’t even notice the difference.
6. Re-think your needs: Do you still have one or more landlines although every member of your family has a cell phone? Do you really need cable TV when all you have been watching is Netflix? Are two cars a necessity or a luxury if you are on a convenient public transit line? Will the party be more fun if you buy a new dress you may never wear again? There are loads of ways to cut corners without significantly compromising your quality of life.
7. Review your insurance: Is your family protected in the event of the death of you or your spouse or both? Your workplace benefits may include some life, disability and health insurance, but is it enough? Understand your employee benefits and augment them where required. Critical illness insurance can provide peace of mind if you succumb to a listed condition and suddenly have unexpected bills.
8. Talk to your partner: If you have a partner or a spouse, talk regularly about your finances. Make sure you both have access to each other’s computer passwords and any bank or investment accounts that are not joint. If you think managing your finances now is a problem, imagine if only one of you is left behind to provide for the family with no understanding of family finances and where important documents are kept.
9. Teach your kids: None of us were born understanding the value of a dollar or knowing how to manage money. Children learn from their parents. Give them an allowance or pay them for doing chores above and beyond their day-to-day responsibilities. Establish what they are responsible for paying for out of their own money. Don’t be afraid to say, “It’s too expensive,” or “We can’t afford that.” As your children get older and get part-time jobs, require that they save a portion of everything they earn towards their post-secondary education. Encourage them to donate time and money to the charity of their choice.
10. Make a will: Having an up-to-date will is essential to ensuring your estate is distributed as you intend it, and that your death doesn’t create a legal and administrative burden to your family. If you die without a will, a court will appoint someone to administer your estate and distribute the assets according to a formula set out in provincial estate and family laws.

Also see: Financial New Year’s resolutions

By Sheryl Smolkin

This is the last Best from the Blogosphere for 2015 and I’m taking a break, so the next one will be published on January 25, 2016. We wish all savewithspp.com readers a healthy, prosperous New Year.

As we look back on 2015 and ahead to 2016, there is much to think about. We have a new Federal government, the loonie is at an all-time low and Canadians have extended extraordinary hospitality to Syrians and other refugees from war-torn lands.

Here are some interesting stories we are following:

In TFSA vs. RRSP: How are Canadians saving? I interviewed Krystal Yee (Gen X), Tom Drake (Gen Y) and Bonnie Flatt (Boomer) to find out how Canadians are taking advantage of the tax-sheltered savings vehicles available to them.

In What Sean Cooper Really Achieved By Paying Off His Mortgage In 3 Years Robb Engen from Boomer and Echo tells us that Sean Cooper didn’t just pay off his $255,000 mortgage in three years; he taught us all a lesson in personal branding. Mr. Cooper, a pension analyst by day, mild-mannered blogger by night, took an almost Machiavellian-like approach by achieving fame through mortgage freedom at age 30.

Jim Yee offers some Year End Finance Strategies that will take advantage of ongoing changes to our tax rules. For example, in 2016, the new Liberal government will be lowering the tax rate on the middle income bracket from 22% to 20.5% so those individuals making more than $45,283/year but less than $90,563/year, deferring income to next year might save some tax dollars.

On the Financial Independence Hub, Doug Dahmer writes about the timing of CPP benefits. He says the CPP benefit for a couple can be in excess of $700,000 over their lifetime and the study demonstrates that the difference between starting your benefit at the least beneficial date and starting at the best date can be more than $300,000.

And finally, Rob Carrick at the Globe and Mail offers some thoughts on how to prepare for a frugal retirement. Frugality is assumed to be a virtue in the world of personal finance writing, but on the outside, frugality is sometimes a synonym for cheap. He refers to a blogger on Frugalwoods who argues that making the choice to be frugal is about asserting your independent thinking about money.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

The Financial and Consumer Affairs Authority (FCAA) is warning Saskatchewan seniors to be aware of investment fraud scams. Roughly 30% of investment fraud claims received by the FCAA’s Securities Enforcement Branch come from seniors. And this number could be significantly higher as much of the investment fraud perpetrated against seniors goes unreported because they feel embarrassed, or are afraid they’ll be judged incapable of handling their own finances.

“They typically have pension plans, RRSPs, TFSAs and home equity so seniors make very appealing targets for fraudsters,” says FCAA Communications Consultant Matthew Barton. “The two big things they always tell seniors is ‘we want you to have enough money for a comfortable retirement’ and ‘You would like to leave a legacy for your children and grandchildren.’”

For example, in May 2014 Ronald Jerry Fast received a seven year sentence in one of the largest fraud schemes in Saskatchewan history.

He and his daughter Danielle Fast-Carlson ran a Ponzi scheme that defrauded approximately 250 investors of nearly $17 million. Most of the victims were elderly people from Fast’s hometown of Saskatoon.

He used money from previous investors in his Marathon Leasing Company to pay off new ones, creating the impression that he was able to deliver higher-than-normal returns to people who put their money into his business.

In another notable case, North Battleford financial advisor Adele Kaminsky entered a guilty plea in January 2015 in a wide-ranging case of investment fraud case. She sold investments in a company called Enviro-Can Private Placement through her company AK Financial Planning Services. Subsequently, she moved more than $500,000 to her personal bank account.

Here are some investment scams the FCAA says that people of all ages should know about and avoid:

Affinity Fraud: Con artists sometimes establish credibility by associating with an affinity group (like churches, sports organizations, or social clubs). They’ll spend some time getting to know the members of the group, and then they’ll ask if anyone’s interested in investing. They’ll also often tell you to keep the deal “hush-hush”, because it’s such a great opportunity. What that usually means is it’s a great opportunity for the con artist, not so great for the victims.

Ponzi Scheme: Ponzi schemes are also known as a “pyramid scheme,” because the people who invest first are at the top of the “pyramid.” They make their money by recruiting more investors to the scheme. These new investors pay fees, which go to the people who invested in the scheme before them. The people, who join the scheme later on (and make up the bottom of the “pyramid”), usually lose out when the scheme runs out of new investors.

Boiler Room Scams: These scams involve individuals claiming to represent a brokerage house and using high-pressure sales tactics, often offering investors an exceptional deal on stock. They’re called “boiler room scams” because the “salespeople” who call to offer you a “once in a lifetime deal” are usually calling from a room, called a “boiler room”, filled with other con artists on the phone doing exactly the same thing. The “brokerage house” typically owns most – or all – of the stock, which it actively promotes to drive the price up. Once the firm has sold its holdings, it stops promoting the stock. The price of the stock falls, and you lose your money.

RRSP Scams: These scams are often promoted in newspaper ads for RRSP “loans” that let you take advantage of a “loophole” in the tax laws to access your locked-in RRSP funds. In reality, the promoter encourages you use your RRSP holdings to purchase stock in a start-up company. In return he or she “promises” to loan you 60-70% of the value of the investment. The stock is often worthless. You can typically expect to get no funds from the promised loan and you may end up paying tax on the money you withdrew from your RRSP, even though you don’t have it.

Nigerian Letter Fraud: These letters have appeared in various forms through the mail or via e-mail since the late 1970s. They appear to be from a government official or higher-up who claims to have access to millions of dollars and needs help getting the money out of the country. All they need is for some kind soul to hold the money in your bank account. The sender of the letter will ask for your banking information and offer to give you a percentage of the proceeds in return for your “help”. Watch out! Once they have your banking information, they’ll empty your account.

“We encourage people even if they’ve called the police to also call the FCAA if they to report suspected fraud especially when it comes to securities, because we can open the investigation and we have tools and resources to help them out,” Barton says.

For more information on investment fraud, visit www.fcaa.gov.sk.ca/investmentfraud/

By Sheryl Smolkin

Recently Rob Carrick at the Globe and Mail wrote Prepare for the worst and make 2016 the year of the emergency fund. According to Carrick, the emergency fund is how you survive a financial setback without raiding your retirement savings, adding to your line of credit debt or borrowing from relatives. “Think of an emergency fund as insurance against a short-term setback that affects your long-term financial goals,” Carrick says.

20 Reasons Why You Need am Emergency Fund by Trent Hamm on thesimpledollar.com lists all of the obvious reasons (job loss, illness, urgent medical expenses) why you may need to tap into an emergency fund plus a few you never thought of. Some more obscure examples are:

• Your identity is stolen, locking you out of your credit cards and/or bank account for a while until the issue gets straightened out.
• An unexpected professional change forces you to relocate quickly.
• A relative or friend of yours passes away suddenly in another part of the country (or the world).
• You discover your partner is cheating on you, and for your own safety and peace of mind you have to pack your bags quickly and go.

How much do you need to save in your emergency fund? Typically financial experts suggest three to six months of fixed (as opposed to completely discretionary expenses). Emergency fund calculators from RBC and moneyunder30.com can help you figure out how much you should set aside.

Jason Heath at MoneySense is not a big fan of emergency funds if that means a substantial amount of cash sitting in a bank account doing nothing. He says, “I’m all for having the potential to cover 6 months of expenses in the event of an emergency. But I’d rather someone be able to do so through a combination of modest savings and ideally, a low-interest rate debt facility like a secured line of credit.”

Gail Vax-Oxlade believes the TFSA is a perfect place to stash your emergency fund. She says, “The best thing about the TFSA is its flexibility. You can take money out of your TFSA at any time for any purpose, without losing the contribution room, which makes this account the number one choice for socking away an emergency fund. So even if you take money out in one year, you can put it back the next, without affecting that year’s contribution limit ($5,500 for 2016).”

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

This week we are back to everyone’s favourite topic – how to get ready for retirement. If you haven’t already maxed out your 2015 Saskatchewan Pension Plan, RRSP and TFSA contributions, now is the time to make sure you are “on plan” before you start spending more than you can afford in the run up to the holiday season.

If you are not a Globe & Mail regular reader, check out the new Globe Retirement series. I particularly like Boomer retirement planning: A nine-step guide to ease your mind by our perennial favourite Rob Carrick. The publication’s online fee disclosure tool will show you how the advisory fees you pay compare with other investors.

Michael James on Money writes about Retirement Spending Stages. While there is evidence that older seniors spend less, he says spending too much in the early years of retirement could mean in your later years all you have left to live on is government benefits and any pension streams you may have.

In Save like this, retire like that – My story about early retirement in style Mark Seed interviews “RBull” from Canadian Money Forum who retired in 2014 in his 50s. He estimates that his savings rate averaged a little over 20% for about 20+ years. Approximately two years before retiring he sold almost all his stock positions to purchase broad market ETFs to simplify the portfolio, increase diversity and keep fees low.

Dan Wesley who blogs at Our Big Fat Wallet is in an enviable position. His TFSA and RRSP are Maxed Out and he is trying to decide where where to put his additional savings. Options include paying down the mortgage, opening a TFSA for his wife and opening a taxable investment account.

In MoneySense, Jon Chevreau discusses Saving mistakes you’re probably making. The single biggest mistake of course is NOT saving at all, says Adrian Mastracci, president of Vancouver-based KCM Wealth Management Inc. The easiest thing in the world is to spend 100% of what you earn or even worse, fall into debt. Chevreau says at the root of the failing-to-save mistake is the failing-to-live-within-your-means error.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

I recently returned from travelling in Europe to glorious fall colours, shorter days and a chill in the air. Although we saw beautiful things in wonderful places, as we landed I couldn’t help thinking that we have so much to be thankful for this Thanksgiving, right here at home.

Whoever is elected as the next Prime Minister, Canadians will continue to enjoy considerable peace and prosperity. There are poverty and income inequality issues we definitely need to address, but unlike refugees from war-torn countries, most of us have a roof over our head and food on the table.

Here are a few interesting blogs and media stories that appeared in my absence you may find informative when you’ve had enough turkey and pumpkin pie.

If you have been putting off joining SPP or increasing your RRSP contributions, take a look at Create a Money Machine: The Effect of Compounding by Billy Kadeli from RetireEarly.com on the Financial Independence Hub. He tells young people how they can create their own “personal money machine” by investing early and taking advantage of compounding.

Blonde on a Budget’s Cait Flanders suggests you can Choose Your Own Financial Adventure. When faced with financial options at a key milestone or crossroads in your life, pick the smarter choice to protect your financial future instead of ending up in debt or even bankrupt.

In July, Sean Cooper wrote Take Car Insurance into Consideration When Buying Vehicles. Car insurance costs vary depending on the type of vehicle you choose. Before test driving vehicles and falling in love with one, he recommends that you get car insurance quotes for each model. By making car insurance part of your new car decision, it will give you a clearer idea about the total cost of ownership.

And on the election front….

Adam Mayers at the Toronto Star writes that Your Vote Gets a Better CPP or a bigger TFSA, but not both. Conservative Leader Stephen Harper and his Conservatives support a $10,000 TFSA limit. NDP Leader Tom Mulcair and Liberal Leader Justin Trudeau do not. But the quid pro quo is that the parties vying to defeat Harper agree on an expanded CPP.

If you or a family member have student debt, you will be interested to know that Liberal platform includes student debt relief. If elected, Trudeau would increase the Canada Student Grant for low-income students by 50% to $3,000 a year for full-time students and $1,800 for part-time students. As well, graduates would be required to start paying their debts only after they’re earning at least $25,000 a year.

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By Sheryl Smolkin

A new report from the C.D. Howe Institute says that the lower mandatory draw downs from RRIFs and similar vehicles introduced in the 2015 budget are better than the old rules but this file should nevertheless remain open.  If real yields on the types of securities a prudent retiree should hold do not rebound considerably, and if life expectancy continues to rise, authors William B.P. Robson and Alexandre Laurin say the risk of outliving tax-deferred savings will continue to be material.

By the time new withdrawal limits were announced this year, the draw down rules established in 1992 were badly outdated. Lower yields on safe investments and longer lives had put many Canadians at risk of outliving their savings. The new smaller minimums reduce that risk.

With real investment returns of 3%, as assumed in the budget illustrations, C.D. Howe projections suggest relatively constant minimum RRIF draw downs up to age 94, and a lower risk of living to see a badly depleted RRIF account balance. However, real returns on safe investments are currently negative. Re-running the projections with zero real returns suggests that most seniors still face a material risk of outliving their tax-deferred savings.

The motive for forcing holders of RRIFs and other similarly treated tax-deferred assets to draw down their savings is to accelerate the government’s receipt of tax revenue, and likewise bring revenue from income-tested programs such as Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) forward.  These payments will occur eventually – notably on the death of the account holder or her/his spouse or partner – so they amount to an implicit asset on governments’ balance sheets. The draw downs do not affect their present value; they simply make them happen sooner.

The minimum withdrawals are not a serious problem for those who, perhaps because they do not expect to live long, want to draw their tax-deferred savings down fast. Others, willing and able to work and replenish their savings after age 71, will get by. Couples can gear their withdrawals to the younger spouse’s age. High-income seniors whose incremental withdrawals do not trigger OAS and GIS clawbacks will find the burden of paying ordinary income taxes on them tolerable. Higher TFSA limits will also let more seniors reinvest unspent withdrawals in them, avoiding repeated taxation.

For others, however, forced draw downs make no sense: those whose withdrawals – reinvested in TFSAs or not – trigger claw backs; those daunted by tax planning and investing outside RRIFs; those unable to work longer; and those facing sizeable late-in-life expenses such as long-term care. The more future seniors have ample assets to finance such needs as health and long-term care, as well as the enjoyments of retirement, the better off Canada will be.

Therefore, the report says the 2015 changes should be a down payment on further liberalization. In the alternative, if more regular adjustments to keep the withdrawals aligned with returns and longevity are impractical, it is suggested that eliminating minimum withdrawals entirely may be the best way to help retirees enjoy the lifelong security they are striving to achieve.

Robson and Laurin conclude that government impatience for revenue should not force holders of RRIFs and similar tax-deferred vehicles to deplete their nest-eggs prematurely. While the 2015 budget’s changes are a step in the right direction, they say retirees need further changes to these rules if they are to enjoy the post-retirement security they are striving to achieve.

Also read:
What the new RRIF withdrawal rules will mean for you

RRIF rules need updating: C.D. Howe