Canadians are struggling with record levels of personal debt. Figures from early 2018 show household debt has topped 170.4 per cent. This means the typical Canadian owes $1.70 for every dollar they earn.

Save With SPP recently asked noted personal finance expert Jamie Golombek, Managing Director, Tax and Estate Planning for CIBC Financial Planning & Advice, for his views on how to avoid the pitfall of debt, how to dig out from under it, and how to make saving part of your overall plan.

“The first thing people need to do is have a written budget,” says Golombek. “The budget needs to show the cash that is coming in, and the monthly expenses that are going out.” This simple step will give people a better handle on their cash flow, he says.

His second tip was to “plan ahead for major expenses.” Setting money aside for big ticket items, as well as emergencies, such as layoffs or major home repairs, helps you avoid being “caught by surprise later,” Golombek explains.

His third suggestion is to try and “distinguish between your wants and needs, especially when it comes to major expenditures,” he says. That’s a big issue, because we live in a society where people expect instant gratification, rather than saving up and then buying the things they really want later, he explains.

Golombek speculates that we are in this high-debt situation because of two main factors – housing prices in various Canadian cities and towns have skyrocketed, while interest rates have “plummeted to a near 60-year low.” That’s creating the temptation of buying when debt is relatively cheap, he explains. But credit card interest can still be in the 20 per cent range, he adds.

As well, he says, “there are so many easy ways to spend money these days.” There are apps that hook your phone up to your credit card, so you can pay by tapping the phone, or using a thumbprint. Spending, he says, has never been easier.

How to dig out from under it?
“The best way to go is to have a financial plan, one that looks out to the long term. Take a look at the big picture for the next five, 10 or 20 years,” he explains. Things like time off, education, retirement and also debt reduction should be part of your plan. “This plan will tell you how much you can afford to spend, and how much you need to save,” he says.

We thank Jamie Golombek for talking to us – and remember that if you are planning to save for retirement, a good place to invest is the Saskatchewan Pension Plan.

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

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

1,000 boomers a day are turning 65 and gearing up for retirement
The crowd of people punching the clock at work for the last time is growing, writes Jim Yih, author of the Retire Happy blog. He notes that 7 million Canucks will be retiring in the next decade.

“We hear too many doom and gloom scenarios about what retirement holds from so many sources,” writes Yih. Instead, he offers some key retirement readiness tips from those who are already over the wall.

First, he says your health and fitness should be a priority. “Your health is the basement you build on, so it needs to be as solid as possible,” he advises.

Next, be prepared for retirement, he writes. Know your sources of income, be prepared for relationship and psychological impacts of not working, think about working part time and generally “educate yourself to avoid retirement shock,” Yih advises.

Where possible, Yih states, you should avoid retiring with debt. That’s not easy, he writes, given that about 59 per cent of us are indeed in debt at retirement age. But debt in retirement can be a black hole that can lead to “a downward spiral” in income, he warns.

His last advice is about retirement savings – “start saving earlier, and save more,” he writes.

It’s a great blog to check out.

If you are thinking about retirement savings, another great resource is the Saskatchewan Pension Plan. Visit their site and find out how you too can make retirement savings easy and automatic.

Blog focuses on the ins and outs of investing
One of our Save With SPP readers suggested we take a look at the Stocktrades blog — and we thank our reader for the suggestion.

Investing is not for the faint of heart. The blog helps do-it-yourself investors through the often complicated maze of terms and tactics. There’s a lot of helpful information on this blog and if you are into picking your own stocks, bonds, ETFs and the like, this will be a helpful resource.

It’s certainly worth reading, so we again thank our reader for the tip.

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

Many of us, as we reach that certain age, begin to notice the little aches, pains and extra pounds that the “golden years” seem to want to pack on.  We can’t turn back the hands of time, perhaps, but we can equip ourselves to be ready for its onslaught.

So notes Alyson Rodgers, author of Health and Fitness for Seniors: Exercise Solutions for Baby Boomers. This short, helpful book makes the important point that we all “can still benefit from exercise, regardless of age, medical condition, or genetics.”

Rodgers advocates “regular but moderate exercise,” ranging from 15 minutes to one hour, three to five times a week. The trick – moderation – will avoid the burnout of overdoing exercise, and the physical pain that can accompany it, she writes. A shorter, more sensible program of exercise will be easier to stick with, she notes.

It’s best to “work it in at a comfortable pace, and to keep it challenging,” she writes.  Her book outlines specific, easy-to-follow exercises for a variety of different situations and for different medical and physical conditions.

In the book’s chapter on balance and flexibility exercises, Rodgers notes that targetted exercise programs can help set up your body “to defend itself against the all-too-natural slips and tumbles we all take from time to time.” Balance can be improved through standing and sitting exercises, the book notes. There are great ways to improve one’s flexibility, and an exercise ball is a great tool for helping in that regard, the book says.

In addition to boosting the body’s natural line of defence, exercise helps avoid the risk bone loss (a frequent side effect of being sedentary) and can control weight, she writes. As we get older, she notes, “our metabolisms slow down, but our eating doesn’t.”

Rodgers also says energy should be spent on making the home safer – grip bars, anti-slip mats, and de-cluttering are among the strategies listed.

This well-written and positive short guidebook is well worth a read, and is available at your local bookstore or on Amazon.ca.

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

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

Workplace pensions disappearing, putting savings onus on you
Writing in the Financial Post, Jason Heath notes that while most Canadian retirees think they saved enough for retirement (42 per cent said they had saved enough, 44 per cent wished they had saved a little more), much of that saving – about 25 per cent on average — came from their workplace pension plans. That’s a problem going forward, Heath writes, because workplace pension plans are becoming quite scarce.

“There have been trends in Canada towards reducing employee pension coverage, shifts towards temporary and contract workers and an increase in self-employment,” he writes. “These all put more personal responsibility onto today’s workers to save proactively to be tomorrow’s happy retirees.

Many of us already know that the Saskatchewan Pension Plan provides a great way for us to save on our own. Those savings can augment your company’s plan or can represent your own personal retirement plan. Sign up today – visit saskpension.com for more details.

What are the best places to retire in Canada?

MoneySense magazine recently put together a video on how to choose a place to retire in Canada.

The magazine says that retirees want to live somewhere that is close to an airport, has a thriving arts and culture scene, good weather, and good healthcare.

What places made their list? Number 1 choice was Victoria, B.C. MoneySense says B.C. has the warmest weather in Canada, and Victoria, while a bit pricey (over $574,000 for the average home), is steeped in history and culture and blessed with fine hospitals.

Taking second place was Ottawa, a larger city with more than 974,000 residents, which has many museums and art galleries, a good and mid-sized airport, and excellent healthcare. Housing is still a bit expensive, with the average price around $481,000.

Number 3 was Orillia, Ontario, which is about two hours’ north of Toronto. This beachfront town of 32,000 has lots of history and culture, a large casino nearby, and boasts affordable housing averaging under $300,000.

An unofficial runner-up selected by the Save with SPP blog might be Saskatoon, Saskatchewan, a fine, young-feeling university city with great healthcare and those long, sunny, and non-humid summer days of bright sunshine. Northern lights in the winter, too.

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

Retirement is a sort of grey area for most of us – a destination that we’d like to arrive at one day, but one we know very little about.  But research shows that life after work may have the hidden benefits of extending your life and boosting your health.

A Dutch study, published in the journal Health Economics, found that a group of male retirees who retired at age 55 were 2.6 per cent less likely to die within the next five years than those who didn’t retire early. The study, authored by economists Hans Bloemen, Stefan Hochguertel and Jochem Zweerink, is reviewed in this New York Times article.

Why is retirement seen as good for health?
The Dutch study found that those who were retired had fewer signs of digestive and cardiac trouble – less stress, less “road” eating, and less sitting in traffic.

The Times article also cites US research that concluded retirement is, for health purposes, like finding out you are 20 per cent less likely to develop a serious illness, such as diabetes or a heart condition.

A similar study in Australia found that “retirement was associated significantly with reduced odds of smoking, physical inactivity, excessive sitting and at-risk sleep patterns.” You can have a look at the Australian study, called Retirement: A Transition to a Healthier Lifestyle.

A lot of times we are sort of trapped in our thinking on the topic of retirement. We wonder (and worry) how we will manage to live on less money than we made at work. But the research points to a nice new way to frame our thinking. Retirement may be the time of life when we can really focus on our health and well-being. We’ll be liberated from the stress and strain of the workplace, and able to take the time to look after ourselves.

So as you plan your retirement, SPP can help you with the financial side. What you make of the other side – the opportunity to look after yourself – is up to you.

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

The pros and cons of annuities

Annuities are usually insurance against something bad – but there’s a kind of insurance that you can look forward to, explains Moshe Milevsky, Professor of Finance at York University’s Schulich School of Business.

In his YouTube video, Why Annuities Now?, Prof. Milevsky talks about how annuities are really insurance “against something that is a blessing, longevity.” Longevity insurance is “the insurance you buy to protect you against the cost of living for a very long time.”

An annuity is certainly something to think about when converting your SPP savings into retirement income. It’s a way to set up your savings to provide you with a fixed monthly income for your life – and there are ways to also provide for your survivors. Check SPP’s retirement guide for an overview of the annuity options the plan provides.

The retirement spending “smile”

Writing in the Financial Post, Jason Heath talks about the “retirement spending smile” that seems to occur for most of us. What is the smile? We generally spend more money in our early retired years, see a decline in the middle, and then see spending increase in the end – on a chart, it looks like a smile.

Research, the article notes, finds that “spending tends to rise by more than the rate of inflation in later years, on average.” This, the article notes, is likely due to the fact that in extreme old age, “few 95-year-olds cut their own grass, live independently in their homes, or avoid prescription drugs.”

The article warns us that spending may rise modestly if we are fortunate enough to live into our late 80s, and advises that idea to be part of our financial planning.

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

After nearly seven years of writing insightful and highly informative blogs for the SPP, Sheryl Smolkin has decided to retire. We certainly wish her all the best – good health, long life, and many adventures on the road ahead.

Our new blogger is Martin Biefer. Martin has been writing for 35 years, most recently with the Healthcare of Ontario Pension Plan, but before that with community newspapers in Ontario and Alberta, and for the old Southam company, in their business magazine division.

Martin retired from working full time a few years ago and returned to his hometown of Ottawa, where he lives with his wife, his large and crazy Sheltie, and his cat. He’s trying to break 100 now and then at the golf course, occasionally doubling out at the Legion darts on Wednesdays, and taking line dancing lessons at the nearby Richmond Arena.

He and his wife are SPP members. “I was fortunate enough to have a pension from work, but I still had room for RRSP savings. The SPP is so flexible. I’m actually quite excited to see what will happen when the day comes that I turn the savings into income.”

Martin plans to write not only about saving for retirement, but ways to save generally, the ins and outs of retirement, the importance of health and fitness as we age, and much more.

“I can already see the importance of growing your network of friends once you leave the workforce,” he says. “A lot of seniors find themselves isolated, and that’s not good for their mental health. We are social animals and we need lots of interaction to stay energized.”

For Martin, there are obstacles to saving these days that weren’t there in the past. “Homes are 10 times more expensive than they were when my folks bought in the 1960s. So a mortgage is a much bigger deal than it used to be. People are carrying around much more debt than ever before, and that can prevent them from saving.”

The solution, he says, “is to start small. If you can afford only $5 a week, start with that. Put that away before you pay the bills and buy the groceries. And when you can, increase it to $7.50, then $10. You won’t even miss it, and you’ll be on the road to being a saver.”

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

Whether you’re just starting out on your own, building your nest and populating it, or gearing down for the golden years, there’s one constant you can rely on. There’s always room for more money.

So how to save? The lady of this house has developed what she calls her Rules of Acquisition, which she thinks of before buying anything. Before paying full retail price, she asks – “can I get it on sale?” Better, she wonders, “can I get it used?” And finally, “can I get it free?” There’s no shame and much to be saved by checking out yard sales and thrift shops, she advises.

Here are some more suggestions from a quick search of the Internet:

The U.K. based Mumsnet site had a great discussion on the topic. The three most common ideas were shopping for sale items, reviewing insurance (home and auto) and looking for cheaper options, and avoiding restaurant meals – “packed lunches every day,” one poster advises. You can see the full website here.

Closer to home, the My Money Coach blog suggests collecting your change and depositing it in savings account, and thinking of savings more like we think of bills – putting a set amount aside each month. The blog offers helpful steps on this second point, the “pay yourself first” approach that can be automated, and concludes with discussion of the importance of a written spending plan. Here’s where you can have a look at the rest of the blog.

The Huffington Post agrees on the idea of less restaurant eating, and adds putting a nix on daily coffee shop indulgences and online shopping. Their post is here.

Our good friend Steve Martyn’s one-page financial plan focused on knowing how much you are making, and how much is going out. If you spend less than you make, you are winning the battle. Steve also advises paying very close attention to hidden fees.

Our late Uncle Joe advised us all to live on 90 per cent of earnings. “You will never have any problems in life if you do that,” he said.

Sifting through all this advice, three themes emerge:

• You need to be aware of how much you are spending, versus how much you make – a plan
• There’s usually a way to get things you want for less than full retail price – be a patient shopper
• Just as you plan your spending, plan to save; pay yourself first

You can make good use of the savings. A great destination for retirement savings is the Saskatchewan Pension Plan. If you’re a member, direct some of your savings there – and if you want to sign up, visit their site today.

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