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

Half of retirees plan to bring debt into retirement – those with written plans remain optimistic

Half – 46 per cent, to be exact – of Canadian pre-retirees expect to “have long-term IOUs heading into retirement,” but those with a written retirement plan are still optimistic about life in retirement, new research finds.

Fidelity Investments Canada ULC put together this research in their annual study, called Retirement 20/20, according to a recent media release.

“For Canadians, the path to retirement is becoming more complex. With higher debt loads and longer than ever life expectancy, those approaching retirement must think critically, plan ahead and take action today,” states Michelle Munro, Director, Tax and Retirement Research, in the release. “Our latest research findings show that working with a professional financial advisor and putting a plan on paper is the best way to navigate this new environment.”

The study found that 87 per cent of those surveyed who had a written retirement plan were optimistic things would be fine in retirement – for those without such a plan, 42 per cent had a negative outlook about retirement, the release notes.

Other key findings from the research:

• About three in four of those surveyed (70 per cent) say they believe they will be working in retirement
• More retirees (34 per cent) are working to keep mentally and physically active
• Those with a written retirement plan feel better prepared “emotionally, socially and physically” for retirement

Save with SPP used a written plan to prepare for retirement. It certainly helped cement the choice of when to leave full-time work behind. The key things were to note all sources of retirement income (income at the start, and then later, government programs and so on) and at the same time, to note all expenses. Five years later, this plan is still working, and of course there have been unexpected expenses that messed up the plan occasionally. But the ship is still sailing on course.

One of our friends actually prepared for retirement by figuring out what the retirement income was and then living on it – in practice mode – for a few months prior to the big day. That took all the surprises out of it for he and his spouse. Clever.

12 great things about retirement

Many of us (certainly this writer) obsess about the financial side of retirement, but there’s a lot of other less tangible aspects about it that we must not lose sight of.

US News and World Report lists a dozen great things about retirement, including “newfound freedom,” being able to “quit the rat race,” catching up on all the movies you didn’t have time to see, being able to work if you like (but not work if you don’t like), time with kids and grandbabies, volunteering, and time for travel.

You can’t put a dollar value on these things – in a sense, the time to do what you wish is priceless. So no matter how the finances work out, you’ll still benefit from being away from the office on permanent hiatus.

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

These days, there are zillions of ways to pay for things. We’ve had credit and debit cards for decades, plus years of being able to pay for things with your phone or online. So when the beer cart comes around at the golf course, it’s OK not to have cash, because she’ll take debit or credit.

But some people still use cash all the time, and shun these other approaches. Save with SPP set out to figure out why.

According to CNBC, a mere 14 per cent of Americans still “use cash for everyday purchases.”

However, the network notes, cash can help you in some surprising ways. According to Cornell University’s Dr. Brian Wansink, “people who stick with paper buy fewer sodas (pops) and desserts at work. And workplaces, like restaurants and stores, are “’booby-trap hotspots’ — meaning, places where you’re more likely to eat unhealthy foods.”

And even more importantly, the article notes, it’s harder to part with physical currency than to tap with a card or phone. “That’s because researchers have found that paying with cash — physically handing over your money and watching it disappear – is painful,” the network notes.

And while your cards tend to have high limits, cash is cash. You can budget easily by “withdrawing a pre-determined amount of money for the week,” and committing to only spending that amount, the article explains.

The article’s final point – you can make a deal with cash. Someone offers you something for $30, you can say “I’ve only got $20,” and in a lot of cases, they’ll take it. This sort of thing doesn’t happen with plastic, the article notes.

Over at the Pocket Sense blog, a couple more ideas in favour of cash are presented. What better way is there to spend within your means than to go cash-only, the article asks. As well, the article notes, there’s no interest charge or long-term debt associated with a cash purchase.

“Interest rates, annual fees and other charges can make a consumer’s monthly credit card bill skyrocket and get them into a vicious cycle of debt that is difficult to overcome. By paying with cash, consumers may protect their credit and avoid unneeded debt,” the article notes, citing the fact that in the U.S., Americans have rung up more than $1 trillion in debt.

Another sort of “wow” aspect of cash use is that it protects your privacy. “The Federal Trade Commission reports that fraudulent use of credit and debit cards is taking place every single day. By using cash, you protect your identity and your credit,” the article notes.

Save with SPP has a number of friends and relatives who are great with debit and credit cards, paying them off in full each month and getting cash back and points and other great perks. There are also some insurance benefits of paying for things with plastic. But for the rest of us who tend to spend first and worry about paying later, moving to an all-cash approach might correct some bad habits and balance the old chequebook.

And that, in turn, might free up a little more money to save for retirement. A wonderful place to park those extra dollars is the Saskatchewan Pension Plan. Even small amounts will grow over time at an impressive rate, and when you’re ready to enjoy retirement, the SPP will turn your savings into a steady monthly income. 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 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

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

If retirement looks unaffordable, there’s always Ecuador

New research by a New Brunswick-based economic sociologist sheds some interesting light on why many North Americans move to lower-cost, better climate retirement spots – specifically Ecuador.

Market Watch recently published an interview with Matthew Hayes, author of the book Gringolandia, which looked into some of the reasons why middle-class North Americans are doing a “reverse migration” to the South American country.

Hayes says in the interview that he began realizing that most ex-pats who retire to Ecuador were doing so because of a lack of retirement savings. He says a lot of “peoples’ lives were being reorganized” after the global financial crisis of 2008, and for many, retirement plans had to be cheapened up.

His research showed that it was not so much that Ecuador was more attractive than where they were, it was that they needed to escape from “the rat wheel,” the article explains. “Maybe their careers didn’t develop the way they wanted to live. Or they wanted a more meaningful life. Some told me it might be difficult to purchase and sustain retirement in a place like Los Angeles if you’re not independently wealthy,” Hayes states in the interview.

Many, he states, saw moving to a new continent with a different language as being a great, late-life adventure akin to travel.

“They talked about being more active and able to socialize more and staying young by meeting people and getting involved in activities and seeing things they hadn’t seen before. It’s all very tied to the idea of active aging, which is a dominant cultural ideal of aging at this moment in time,” states Hayes.

But the main point of the move was that the North Americans, lacking in savings, were “economic refugees,” the article explains.

“They couldn’t stay in the United States living the life they were living without continuing to work. And some felt they were displaced. In a lot of cities, like Portland, Oregon, and San Francisco and New York and Chicago, the cost of living has increased so much in the last decade or two that some people feel it’s impossible to remain in place,” Hayes states in the article.

And, he states, the “refugees” found there were more benefits than simply lower costs by moving to Ecuador. “What came up in many interviews was how they lost weight when they moved to Ecuador because they’re so much more physically active, walking to places and eating healthier food,” the article notes.

This story underlines the importance of having retirement savings – the more you can afford, the better – to give you options when you retire. Staying where you are today and having the same level of expenses will be difficult if you don’t have retirement savings to bolster what you’ll receive from government retirement benefits.

If you don’t have a workplace pension or do but want to supplement it, an excellent do-it-yourself pension plan is out there for you. It’s the Saskatchewan Pension Plan, an open defined contribution plan with more than $500 million in assets serving 33,000 members. They can set you up with a pension account, you determine how much you want to contribute, and they’ll handle investing the money at a management fee that’s typically less than 100 basis points (1%). When retirement comes, you just contact SPP and they’ll set up your monthly lifetime 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

Many of us count sheep once we hit the sack, but research suggests we might also want to count loonies and toonies.

A study conducted by the University of California found a financial connection between sleep and finances, reports the Financial Poise blog.

The key finding was that “people who increased their sleep by one hour per night saw their wages increase by five per cent in the long run,” the blog reports. While links between poor sleep and obesity, diabetes, and heart disease are better known, the study found financial impacts as well.

“Bank accounts could also suffer as a result of sleep deprivation. A 2016 CareerBuilder survey showed that 17 per cent of Americans reported that their memories were affected by a lack of sleep, while 24 per cent reported that poor sleep made them less productive. That’s a bad combination while on the job,” the article notes.

So the basic finding is that a well-rested person performs better and will ultimately make more than a less productive, forgetful, less-rested person, the article explains. The PC Financial website concurs.

“A life full of work, family and social commitments can definitely make you feel exhausted at the end of the day. And if you, like many people, find you’re not at your best after one or more poor or short nights of sleep, it’s not a stretch to think that your decision-making skills might be affected, impacting everything from your diet, mood and relationships to your job performance and your spending habits,” the blog advises.

How to maximize your sleep for razor-sharp thinking and financial acumen?

The blog offers these ideas.  First, making sleeping a priority, as you would exercise – find out how much sleep a person your age should be getting, and make that a new target, the blog suggests.

Next, stick to that target. “It might be tempting after a long week to burn the midnight oil on weekends and then sleep in late, but this only serves to confuse and disrupt your body’s sleep cycles. Try to be consistent with your sleep and wake times seven days a week,” the blog advises.

Make sure your bedroom is set up for sleeping – no distractions like TVs, reading or eating, the blog states, and develop a “regular bedtime routine.” The blog also advises unplugging from phones and the Internet.

The Wisebread blog lists a number of financial benefits from increased sleep, including “fewer illnesses and medical expenses,” which saves you money due to fewer work absences and less need for drugs and other medical services.

Other financially relevant benefits include “better decision-making,” and boosted productivity, the blog concludes.

It all sort of makes sense. If you are tired at the start of the day, you’ll blunder through, probably grabbing fast food instead of cooking breakfast, having extra Timmy breaks, and making unplanned purchases and spends instead of sticking to a budget.

So perhaps after your next recommended seven hour-sleep, you’ll wake up refreshed and ready to address your retirement savings plans. A nice destination for that thinking is the Saskatchewan Pension Plan, an excellent tool that helps turn your saved dollars into a future lifetime retirement income. Sleep on it, of course, but then check them out the next day!

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

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

Women have to plan for a longer retirement

What works for a man may not work for a woman, and that sentiment is true when it comes to retirement planning.

According to the Young and Thrifty blog, women need “to know how to save more than men.”

They need to save more than the conventional 10 per cent of salary, the post notes, or else they could risk not having enough money in retirement. “Advice given to women about how much to save for retirement may be so far off base that, according to the Broadbent Institute, 28 per cent of senior women are currently living in poverty in Canada,” the article notes.

The article notes that as a starting point, women earn less than men, about 87 cents for every dollar earned by a man. That means less to save for retirement, the blog notes.

Secondly, women “tend to invest more conservatively than men,” the article advises. Women, the article notes, tend to shy away from riskier market investments in favour of GICs and high-interest savings accounts. “While these can be great short-term strategies, these investments offer a lower return, stunting the growth of the money over the long term,” the blog reports.

So the problem is that women “are earning less, saving less, and generally choosing investment strategies that yield less,” the article notes. “But because women generally live longer than men, they need to squirrel away more money in their nest egg.”

The article notes that women tend to live four years longer than men, meaning a more expensive retirement. “Four years longer doesn’t seem that long, but if you assume a retirement age of 65, that’s 28 per cent more years spent in retirement,” the article warns.

A final factor – women tend to leave the workforce to raise children, meaning they don’t have as long a career or as many opportunities to save, the article says.

What to do?

The article advises women to consider sharing some of their parental leave time with their spouses, so that they aren’t off work as much. If you are off on a leave, a spouse can open a spousal RRSP to ensure that retirement savings continues while you are caring for a child. The article urges “more aggressive investments” by women, including the use of exchange-traded funds or ETFs, so that you are getting more benefit from the stock market.

And finally, the article says the savings target for women should be 18 per cent of income, as opposed to 10 per cent for men.

Interestingly, the Saskatchewan Pension Plan was invented with women in mind. The SPP started out as a way for busy women and moms to have their own way to save. The SPP offers professional investing at a very low cost, is scaleable (you can put more in when you make more, and less in when you make less) and very importantly, offers a simple way to turn those savings into reliable monthly lifetime income when you leave the workforce.

It’s an ideal tool for women who want to upgrade their retirement savings – 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

There’s a new organization out there aiming to help bring pension leaders up to speed on some emerging issues – societal, economic, and environmental – that are having new impacts on the way retirement savings programs are run.

Save with SPP spoke with Caroline Cakebread, founder of the new Canadian Leadership Congress, about what the new group hopes to achieve.

Cakebread, a veteran financial journalist who edited Canadian Investment Review for more than 15 years, says the Congress is designed to fill an information gap here in Canada. “We wanted to do something different, some things that haven’t been done much in Canada,” she explains. The group, she adds, will bring pension CEOs and CIOs together for “intimate conversations” about emerging issues, like geopolitical risks, the pros and cons of emerging markets, and environmental impacts on investing. The Congress’ focus is strategic, she explains.

Other key issues the Congress will be looking at with leaders include the growing role of technology, diversity and leadership, and the overall “very uncertain investment environment.”

The Congress held its first major session in Montreal early in June. The format, she says, features speakers, panels, “congressional huddles” and lots of opportunity for networking. A goal, she says, is to connect the pension leaders with experts in a format that encourages free and open discussion, and lots of talk around the table. A number of comments from participants and speakers were made available on Twitter, notes Cakebread. 

The educational outreach the Congress provides is a new approach, Cakebread says, and one that many pension leaders had privately told her is not currently available in Canada. As well, rather than targeting one type of pension organization, the Congress is “more available” to a wider range of plan types. While all of the plans represented are fairly large, some are defined benefit, some are defined contribution, some offer both types, and so on.

While there is a lot out there for pension leaders in terms of educational conferences, there is less for executives who are at a “deal maker” level when it comes to decision making, she says. She’s hoping that the new Congress will meet that need.

Cakebread says that during her time in the pension industry, the public’s interest has really begun to grow. “When I started out, as editor of a pension publication years ago, in the early 2000s, pensions were considered a dull topic,” she says. But now, as the boomer population ages and people begin to grasp the significance of pension income and retirement security, “pensions are cool,” she says with a smile.

If you’re interested in finding out what the Congress is up to, be sure to follow them on Twitter, the handle is @CLCongress. We thank Caroline Cakebread for taking the time to speak with us.

It’s true that pensions were a pretty dull topic in the early 2000s, but the growing retiree population in the intervening years has indeed make retirement security “cool.” The general decline in the number of workplaces offering plans means many of us will need to save on our own. If you’re in that number, a great resource is the Saskatchewan Pension Plan. 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

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

Many books about retirement focus on finances, others on health, wellness, and attitude. But Eric Thurman’s Thrive in Retirement provides a holistic owner’s manual to help get your mind, your soul and your attitude on the right path.

“Retirement,” he writes, “is no longer a short pause between work and the grave. It is now a long, major stage of life, because never before in human history have so many people lived decades beyond their working years.”

He looks at the five vital parts of life, which are “mind, body, relationships, soul, and finances.” The book uses these five things as a sort of lens through which to view your retirement activities and progress.

He also notes that the “three secrets of happiness” are “purpose, pleasure, and peace.” These ideas should also guide you, Thurman recommends.

Having a purpose in life, he notes, citing research from the English Longitudinal Study of Aging, “is associated with increased survival.” The study found that 29.3 per cent of people “in the lowest wellbeing quartile” died within 8.5 years (of retirement);” that compares to just 9.3 per cent in the highest wellbeing quartile. Thurman calls this “compellingly good news,” noting that “you can be happier and live longer if you wake up each morning enthused about the importance of how you will spend your day.”

He expands on this idea. “Recall the five parts of your life: mind, body, relationship, soul and finances. Don’t settle for any of them being deficient or, worse yet, sources of pain. Pursue emotional freedom.”

Your mind will thrive if you “free it from emotional pain” by letting go of minor things that bother you; you then need to keep it active through learning, through hobbies and activities, and even through part-time work, the book notes.

For one’s body, consider where you are on this scale – at the topic is “physically elite,” followed by “physically fit, physically independent, physically frail and physically dependent.” You need to try and be as high up on that scale as you can. He quotes the Quebec marathon runner Jacqueline Gareau as saying strategy must be employed in fitness – “it is not age, it is not diet. It is the will to succeed.”

In the chapter “Make Peace with Money,” Thurman advises us to “clarify our dreams” about money and importantly, to “control your money or it will control you.” He writes that we should “always view money as something you should put to good use and treat with respect. Never love the money and possessions you have. Never love money you don’t have. Never let money own you.”

Debt, he notes, should be treated “like a disease.” Avoid catching it, but if you do, “work to get over it as quickly as possible.” Overspending, he writes, “is always harmful” and credit card debt “ruinous.”

This well-written and motivational book ends with this bit of advice. “Think about how you want the story of your life to close. It won’t be a great ending if you drift passively, letting the river push you wherever it wishes. Instead, choose to steer towards happiness; do some paddling and raise your sail.”

It’s true that debt is the slayer of retirement dreams. One reason may be that paying off debt prevents people from saving for retirement, which in turn leads to less retirement income or a later retirement date. You can fight back by saving on your own for life after work; the earlier you start, the better it will be. And a great tool to use in that effort is the Saskatchewan Pension Plan.

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