Tag Archives: Wealth Professional

Jul 8: Best from the blogosphere

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

Caring for parents hits retirement savings bottom line

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

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

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

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

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

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

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

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

Some great things about retirement

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

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

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

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

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

Apr 22: Best from the blogosphere

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

Dec 31: Best from the blogosphere – Retirement system OK

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

Retirement system OK, but more needs to be done: study

It’s a classic “good news, bad news” situation, this Canadian retirement system of ours. The good news, according to OECD research published recently in Wealth Professional, is that the developed world’s pension systems are much more stable.

The bad news is that they’re not necessarily delivering an adequate retirement benefit, the magazine notes.

“Governments are facing growing challenges from an aging population, low returns on retirement savings, low growth, less stable employment careers and insufficient pension coverage among some groups of workers,” the article notes. “These challenges are eroding belief that pensions will provide enough income for comfortable living in retirement,” the article adds.

While Canada’s system is ranked sixth best among those studied, the article points out that Canadians contribute about 10 per cent of their earnings towards government retirement programs. By comparison, Italians contribute about 30 per cent of earnings, the article notes.

There’s no question that the CPP is on much more stable footing than in years past. The giant CPPIB fund, as of mid-2018, had $366 billion in assets and had an investment rate of return of 11.6 per cent, according to a media release.

But the CPP payout, while being improved, is currently quite modest. The maximum monthly amount as of July 2018 was $1,134.17, and the average amount paid out to new CPP retirees was $673.10. The great thing about CPP is that it continues for the rest of your life and is inflation protected.

Most of us will also get Old Age Security payments, which are currently around $600 a month. This is also a lifetime benefit.

What the studies are telling us, however, is that if we don’t have a workplace pension, we need to be saving on our own for retirement. CPP and OAS were designed to supplement your workplace pension and personal savings. Many of us don’t have pensions at work, and a surprising number of us don’t have any retirement savings either.

If you are in that situation, there is still time to take action. If you don’t have a pension at work, you can create your own by joining the Saskatchewan Pension Plan. You can determine how much to contribute up to a maximum level of $6,200 a year.

If you have dribs and drabs of RRSP savings in other places, those can be consolidated in the SPP (up to $10,000 a year).

Not only will SPP invest that money for you, but at the time you want to retire, they’ll convert it into a lifetime monthly pension. By creating your own retirement income base, those helpful government benefits waiting for you in your future will be icing on the cake, rather than the cake itself.

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

 

Dec 24: Best from the blogosphere – Feds want input on how to make retirement more secure

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

Feds want input on how to make retirement more secure

Retirement security is a hard thing to define, particularly if you are not yet retired.

Some imagine it as an upgrade from working – you’ll have more time to do all the things you want, no more slogging away at the office. Others worry if they will have enough savings to fund the kind of life they have now – or even a more austere one.

Workplace pensions are far rarer than they were in decades past, leaving most of us to have to create our own retirement security.

The federal government, reports Wealth Professional, is opening public consultations on the growing problem of retirement security. It wants to take a harder look at pension regulations, as well as (and perhaps, the article says, in light of the Sears pension debacle), “insolvency and bankruptcy laws.”

The consultations want to “improve retirement security for Canadians” by looking at ways to ensure workplace plans are “well funded,” and corporate decisions are better aligned with “pensioner and employee interests.” The government, the article notes, talks about the improvements that have been made to government pensions, such as the OAS and GIS.

We learned recently that Canadians ought to have saved 11 times their salary by the time they are ready to retire. But in an era when workplace pensions are scarce, how can such saving be encouraged? And how do we ensure folks don’t dip into the savings before it’s time to live off them?

If RRSP savings were locked in people wouldn’t be able to withdraw money until they reach retirement age, and at that point, if funds were be converted to an income stream people would be assure of income for life.

A second idea might be to add a voluntary savings component to the CPP; this has been floated before.

Another idea might be to create investment funds for the OAS and the GIS. Right now these benefits are paid 100 per cent via taxpayer dollars. If, as is the case with the CPP, some of the dollars could be diverted to investment funds, maybe that taxpayer portion of future benefit costs could be reduced.

The real challenge is getting people to save more. One can argue truthfully that there are plenty of great savings vehicles out there that just aren’t being fully used. Could the feds offer some new tax incentives to put money away?

It will be interesting to see what the government finds out on this important topic.

If you don’t have a pension plan at work – and even if you do – it’s always wise to put away money for retirement, which will come sooner than you think. The Saskatchewan Pension Plan offers a simple, well-run savings vehicle that is flexible and effective. You decide how much to put away, you can ramp it up or down over your career, and you get multiple options on how to receive a pension when the golden handshake comes. Be sure to check it out.

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