Canadian women receive 18 per cent less retirement income: analysis

Women in this country receive, on average, 18 per cent less retirement income than men, reports Wealth Professional.

The publication cites an analysis of Statistics Canada data recently carried out by Ontario’s Pay Equity Office (PEO). Another alarming finding, Wealth Professional adds, is that the gap of 18 per cent in 2020 is worse than the 15 per cent gap women experienced in 1976.

This gap, known as the Gender Pension Gap (GPG), has long been a problem, the article continues.

“Among the 34 members of the Organization for Economic Cooperation and Development (OECD), the average GPG was 25.6 per cent as of 2021,” the article adds, again citing PEO analysis.

Across the country, the widest GPG is over in Alberta, where women’s retirement income is, on average, 23 per cent less than that of men. The province with the lowest gap – 13 per cent – is Prince Edward Island, the article notes.

“We see that the Gender Wage Gap (GWG) has narrowed with time. Meaning, women’s wages in Canada have steadily increased with time to be closer to that of men’s, although the gap has not closed completely,” states the PEO’s Kadie Ward in the article. “A natural assumption would be that with increased wages, the pension gap would also begin to close with time, but this does not appear to be the case,” she states.

There are several reasons why, the article continues.

“After having children, women are more likely than men to leave the workforce (temporarily or permanently), work fewer years over the course of their careers, work part-time to balance caregiving responsibilities, and make less money overall than men (due to the GWG),” the article explains.

“The impacts of the GPG should not be dismissed. Aging in poverty is linked to food insecurity, housing insecurity, and overall poor health outcomes, including higher rates of mortality,” Ward tells Wealth Professional.

“[T]here is no better time to call attention to not only the contributions of women around the world but the need for equal pay, better social protections, and shared domestic work between men and women,” she tells the publication.

There’s another factor to consider that this article doesn’t touch on, and that is the reality that women live longer than men. So, as the article notes, if the average woman has 18 per cent less retirement income than a man, she is also very likely to live (and thus, need retirement income) longer. That smaller pension pot will most likely need to sustain her for a longer time.

Women who do have a pension plan or retirement arrangement through work should make sure they are contributing to the max. Some types of plans allow you to contribute while you are away on a maternity leave (or afterwards, on your return to work). Your retired you will be glad if you look into this when you are younger.

If you don’t have any sort of retirement arrangement at work – or want to top up what you have – the Saskatchewan Pension Plan may be a very helpful resource. Set up originally to benefit women without any pension benefits, SPP is open to people with registered retirement savings plan room. SPP will take your contributions, grow them through prudent investing, and will help you turn them into retirement income down the road. Check out SPP today!

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We spend ample time in this space talking up ways to save for retirement, but most studies suggest that the majority of us aren’t savers.

Save with SPP had a look around the Interweb to see why this seems to be the case.

At the Retire Happy blog, Jim Yih outlines several of the reasons that prevent people from being savers.

Citing research from Scotiabank that found that one third of Canadians “do not have a savings plan,” Yih says a lack of financial literacy is one reason behind non-saving. “For anyone that knows me, you know that I am very vocal about the importance and need for more financial education and literacy,” he writes. “The statistics are alarming when it comes to debt, savings and fiscal responsibility. One of the reasons for this is the lack of formal financial education.”

Other non-saving factors he lists in his blog post are having a “consumption attitude,” where people (and governments) tend to spend more money than they have; a “staggering” level of personal debt to pay for, and the complexity of financial markets for novice investors.

“Think about it. With over 9000 mutual funds, how can you possibly go through that many funds?” he asks.

The federal government’s consumer financial website lists several other factors. We tend to develop habits around spending, the article notes, such as always going out for lunch. We put off “things until later, especially things we don’t want to do anyway,” like starting a savings plan, the article continues. Many of us, the article adds, live in the now with money.

“We often downplay what we want in the future. We don’t think much about the future unless we have to. `I know I should keep my savings for when I retire, but I really need to remodel the kitchen this year,’” the article notes.

Among the other ideas in this article that of feeling that savings is like “doing without,” and the notion that putting money away for the future will somehow interfere with your ability to have fun in the present, the article adds.

The Insider by Finology blog throws in a few more. The lack of a budget, the blog suggests, is a key factor.

“Without a proper budget, it will be challenging to know where the money goes month after month, making it difficult to save money,” the authors note.

On overspending, the blog points out that those who don’t save will have serious problems if they ever face a job loss or an unexpected drop in income. Savings should be automated, a “set it and forget it” approach, the article continues.

“Some people need to be tricked into saving money because they don’t have the willpower to save without a push. If you’re one of them, then you need to automate your savings. By setting up automatic savings, you can ensure you meet your savings goals first and force yourself to live on what’s left,” the article advises.

The takeaway here seems to be that savings has to be a habit, one that you keep at systematically. Like eating healthier, or boosting your exercise, saving is not something that is necessarily fun – the benefits of it will appear down the road when you’ve been doing it for a while.

Start with a small, affordable amount of savings that you can live without in the present, and make that money automatically go from your chequing account to some sort of savings. Ramp it up a little bit as you earn more. A “pay yourself first” approach will benefit your future you enormously.

A destination for those hard-saved dollars could be the Saskatchewan Pension Plan. For more than 35 years SPP has been helping people build retirement savings. Check out SPP today and see how they can help you build a secure retirement!

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Carrying debt into retirement can “tarnish your golden years”

When our parents and grandparents happily rolled into full retirement years ago, it was a rare thing indeed for them to hit the golden years with mortgage or other debt.

It’s much more common today, and a recent article from the National Post warns that it’s non-mortgage debt that’s the thing you should avoid taking into retirement.

“Millions of Canadians spend their working days dreaming about retirement. Yet millions of Canadians also may not take into consideration the crucial financial steps they should take to become a retiree,” the article begins.

And while most of us get that retirement – a time when nearly all of us will have less income – is a bad time to have debt, we don’t always concentrate on paying down the right debts before we retire, the article continues.

“While many understand it’s important to pay down loans, they’re often focusing on the wrong ones — prioritizing their mortgages, which have lower interest rates, rather than expensive high-interest accounts,” the Post reports.

Your first goal should be paying off “personal loans and credit cards,” which carry the highest interest rates of all, the article advises. Credit cards currently carrying interest rates ranging from 19.9 to 22.99 per cent in Canada, the Post notes.

A lot of times, the article warns, we tend to put major expenses on credit cards – moving, wedding or funeral costs are cited – which can lead to large unpaid balances.

The article suggests “lowering your mortgage payments to use those funds to pay down other high-interest loans.”

“Mortgages,” the Post reports, “have lower interest, which will allow you to hold onto your savings and pay down debt. From there, start putting cash aside in an emergency fund with about three months of wages. That way, if unexpected expenses come your way, you’ll be ready.”

The other form of debt the Post urges us all not to take into retirement is loans for vehicle purchases.

“Auto loans are another area to pay off before retirement. As of July 2022, the average interest rate for a car loan was 6.62 per cent, according to Statistics Canada,” the article notes.

“But if you have bad credit, that soars up to 19 per cent. That’s about as much as the interest rate on a credit card,” the Post warns.

The article suggests that you might want to hold off on your retirement plans and address these types of debt first.

“If you hold off on retirement to pay off these loans, putting aside wages to pay them down, you could be saving yourself thousands in interest and creating a cushion to retire on,” the article concludes.

This is good advice. When you retire, you will almost always receive less income per month than you did from work. Lots of work-related expenses fall by the way – no Canada Pension Plan, company pension, or Employment Insurance premiums are deducted from pension or retirement savings income, and you may save on union dues (retiree dues are less), workplace parking, and so on. If your income is less than it was at work, your government income taxes will be lower also.

If, as the article says, you can also eliminate (or lower) monthly payments for a mortgage, car loan, credit cards or lines of credit, it will help your retirement cash flow immensely.

While paying down debt is always good advice, it’s also wise to direct at least some of your income towards retirement savings. If you don’t have a pension plan at work, and don’t really want to wade into the volatile waters of investing, consider the Saskatchewan Pension Plan. Any Canadian with registered retirement savings plan room can join, and you can contribute any amount to your account, up to $7,000 per year. SPP will grow those savings into future retirement income.

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What if you had enough income from passive sources – investments, rental income, coin-operated machines, and royalties – that you no longer needed to have a job for income?

That’s the theory behind the book Passive Income, Aggressive Retirement by Rachel Richards, who sets out a detailed and very creative “how-to” gameplan on ways to create sources of passive income.

She begins by asking us to imagine “a world that makes no demands of you. You don’t have to worry about money…. You can hop on a plane tomorrow and go to Costa Rica if that’s what your heart desires.”

People traditionally don’t think of building passive income sources (while they are younger) as a way to achieve financial independence, she writes. Instead we are counselled to save lots of money – say $2 million – to retire by 65. She cites CNBC as reporting that “one in three Americans have less than $5,000 saved for retirement,” with boomers (on the precipice of retirement) having only $24,000 and change saved.

Richards writes that she and her husband have set up $10,000 in monthly passive income. Since reaching age 27 she no longer works for wages, and her husband only works remotely when he feels like it. “We are free,” she exults, adding “words can’t describe the liberation and joy we feel every day.”

Before rolling out ways to create sources of passive income, Richards spends time on why the “nest egg” approach of saving for retirement that may have worked in the past is not as suitable for today. It’s because the nest egg approach, she writes, which worked in the 1950s, does not factor in increases in household expenses, lifestyle pressure, life expectancy, government benefit adequacy, pensions (the lack of them), rising education costs and the increased hourly work week.

Few people can save the $2 million experts recommend. And there’s less help from employers than there was in the past, she explains.

“Pensions are quickly becoming a thing of the past,” she writes. “The ones that still exist today aren’t even that great.” She notes that in the USA and elsewhere, defined benefit pensions that offered a guaranteed monthly income have been replaced by capital accumulation programs without any such guarantees.

So, what’s the alternative to the nest egg approach? It’s passive income, regular income “that is maintained with little or no work. Passive income is the key to being free: freeing up our time, freeing up the location we must be in, freeing up our lives from being financially dependent on our employer.”

The main types of passive income out there, she writes, are “royalty income, portfolio income, coin-operated machines, ads and e-commerce, and rental income.”

Royalty income, she explains, is generated for authors of books and eBooks, composers of music, through loading photos onto a stock photo website, creating downloadable or print-on-demand content, creating online courses, developing an app or software, franchising something, and mineral rights.

We have a friend who writes plays for a publisher. He gets paid every time the play is performed, and the more he writes, the more royalties he gets. The same concept works for other shareable content, the book explains.

The book provides detailed “how-to” steps on how to get going on any or all of these potential revenue streams. Very creative stuff.

On the investment side, you can get passive income from stocks, via dividends, and bonds. With stocks, she writes, “the higher the dividend yield, the higher the risk.” Rather than putting all your eggs in one basket, you might want to look at “a dividend-yielding exchange-traded fund (ETF).”

On bonds, she notes that in the past, bonds offered double-digit yields and were a simple way to make a strong income. She notes that you’ll get regular interest with a bond and its face value in the end “only if you hold it until maturity.” If you sell it before it matures, you could lose money (or gain). Bond ETFs are a way to go if you again don’t want to have all your bond investments in a single company, she continues.

Real Estate Income Trusts (REITs) “are a great way to get your feet wet with investing in real estate. You can earn a piece of the pie without actually buying a property,” she explains.

Coin-operated vending machines can cost a lot, but once you invest in one, it’s a steady source of cash. “Location, location, location,” she advises, also noting that an older machine can be more affordable than a fancy new one with tap payment and other high-tech perks.

If you are in the position to go even bigger on coin-operated ventures, carwashes and laundromats are a very reliable investment that generates predictable cash flow, she explains.

On rental properties (including rental of rooms), the book notes that it’s a steady source of income. If, she explains, you were able to rent out a single-family property for $250 more than the mortgage, “then you are making $250 a month while your tenant pays your mortgage for you.” Once the mortgage is paid, “your cash flow jumps by hundreds of dollars.”

This is a very different way to look at retirement. In effect, Richards is advocating the idea of gradually replacing your work salary with various sources of passive income, until such time as you don’t need to work. We haven’t seen a book that looks at things quite this way – it’s well worth a read.

The book mentions that the traditional defined benefit pension is scarce these days. Did you know that your Saskatchewan Pension Plan account offers you the option of a lifetime, guaranteed monthly payment via one of several different annuity options? It’s how SPP can a reliable generator of passive income for the rest of your life! Check out SPP today!

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A new negative twist from inflation – it’s cramping our ability to save

We’re all aware of the terrifying ups and downs we see for the price of things like gas and groceries, but a new study suggests inflation is also cramping our style when it comes to saving.

The study, carried out by BDO Debt Solutions, was summarized in a recent media release.

“The survey, which examines the affordability and financial health of Canadians, found more than three-quarters of Canadians (78 per cent) say their personal finances have worsened due to inflation, while just over half (54 per cent) say they’re living paycheque to paycheque – an increase of three percentage points over 2021,” the release notes.

On the savings front, the news is just as grim.

“Six in 10 Canadians are also either saving less, or not at all – especially for retirement – than they were in 2021,” the release reports.

“With inflation and rising costs, affordability challenges have returned to, and in some cases, surpassed pre-pandemic levels. It’s concerning to see that Canadians are experiencing more financial difficulties today compared with the last three years,” states Nancy Snedden of BDO Debt Solutions in the media release.

Costs are rising for households, the survey results note. More than one-third of Canadians – 35 per cent – say “it’s challenging to feed themselves and their family,” while 52 per cent are finding the cost of transportation “difficult,” the release continues.

Since the cost of essentials like food and transportation has jumped, there is less money left over for saving, the release explains.

“More than four in 10 Canadians have also cut savings for retirement, while 71 per cent say saving for retirement is a challenge – an increase of six percentage points over 2021,” the release states.

“As a result, 64 per cent of Canadians now say they are not on track to save enough for retirement – a jump of four percentage points in the last year – of which nearly half say they are very far behind. Among those aged 18 to 24, more than two-thirds (67 per cent) say they have no retirement savings at all,” the release adds.

“Overall, 32 per cent of Canadians say they have no idea what their retirement plan will be, and one-third claim they will never stop working (through part-time/occasional work), despite wanting to retire,” the release concludes.

If the solution is to continue working rather than saving, it’s worth noting that a recent Global News report found that retirements are up in high-pressure job sectors like “healthcare, construction, retail trade, and education and social assistance.” Most are retiring before age 65, the article notes, and the overall retirement rate is up 32 per cent over last year.

From that, one can infer that those who want to keep working instead of saving for retirement may find the work too stressful to carry on past 65 as planned – alternatively, they could find they aren’t healthy enough to continue working long into old age. That underscores the need to insure yourself against future money shortfalls through retirement savings.

If you can’t afford to save as much as before, that’s understandable. But save what you can, because those savings will provide future income that will help your “20 years down the road” you to cover the cost of living.

If you have a pension or retirement program at work, be sure to contribute to the max. If you don’t – or you want to bolster the savings plan you have – take a look at the Saskatchewan Pension Plan.

With SPP, you can start small, and tick up your savings when better times return. SPP can grow those savings and turn them into a source of retirement income when work is done. Check them out today!

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Those of us who are now retired will remember wondering what the heck we would get up to once we handed in our security badge and logged off forever.  It’s a mystery. We remember asking retired friends what it would be like, and were told “you’ll never believe you found the time to work.” A cryptic and mysterious answer, that.

So, what are retired folks getting up to? Save with SPP had a look around to see.

US News and World Report sets out the list of things folks ought to do in retirement. They suggest activities like fitness, “being financially savvy,” establishing routines, caring for pets, staying social, and to “commit to your health.”

Other ideas in the article include travel, getting new hobbies, working (part-time), considering relocating, studying your family tree, and so on. 

They recommend starting off with a retirement bucket list.  “Jot down the wishes you’ve been waiting to fulfill, ranging from travel spots to hobbies. Whenever you’re unsure of what to do next, you can revisit the list. Just be sure to keep the items within your reach, meaning they are financially feasible for your budget and fit your mobility range,” the article advises.

A colourful graphic on the Age UK site adds a few additional ideas, such as going on cruises, “seeing the Northern Lights,” enjoying time with the grandbabies, and the 60-ish notion of travelling the world in a VW mini-bus.

OK, so these are all great ideas. But are people doing them?

The Satisfying Retirement blogspot reports that “worries about having enough to do and not being bored are very much top-of-mind” for retirees. “After several decades of having time dictated by work, the thought of unplanned days stretching into the future is a little unsettling,” the post continues.

A number of retirees interviewed for this post say they do a lot of the same things, but can now take their time. Two hours at the gym provides time for talking to people and reading the paper, the post notes, whereas before, you had to rush through a working in 30-35 minutes to make time for shopping.

“I’ve had three boring days in two years,” retiree Jane P tells the blog. “We have an exercise or swimming class every weekday morning. We have a garden. I try to meet one of several friends for coffee or lunch each week. I’m a mediator in training and I try to have one mediation event set up each week. I have a blog and a blogging community. I play games on Facebook.”

According to the Intentional Retirement blog, maybe retirement doesn’t look night-and-day different from pre-retirement. The blog reviewed U.S. Bureau of Labor Statistics data that found that “those in retirement spent less time on things like working, educational activities, and caring for others like their children. They spent more time on things like personal care, eating, household activities, shopping, leisure, civic activities and talking on the phone.”

The U.S. data, the blog notes, say it boils down to an average 2.5 hours per week more, for retirees, on leisure activities than their working cousins.

Time to try new things is the dividend that retirement pays. We wouldn’t have thought we would be spending hours and hours per week line dancing, but it’s opened up a lot of new friendships, is fun, and helps us stay sharper. All good. Try to take advantage of all the free time to try new things.

Having a little more retirement income will give you more options in retirement. Consider joining the Saskatchewan Pension Plan to help boost your savings efforts. As of December 31, 2021, SPP has 32,409 members, manages $604.6 million in assets, has been delivering retirement security to Canadians since 1986, and is open to any Canadian with registered retirement savings plan room. Check them out today!

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Could The Great Retirement be followed by the Great Returnship?

Will high inflation, volatile investment returns and soaring interest rates tempt new and recent retirees into “returnship,” or returning to the workplace?

That’s a view expressed in an article by Brian J. O’Connor, writing for SmartAsset via Yahoo! Finance.

“Retirees who find themselves hit by higher prices, lower stock returns and big health care bills might consider boosting their bank accounts by heading back to work – and employers are waiting to welcome older workers back with open arms,” he writes.

“Big health bills” are more of a U.S. problem than one we Canadians face, although long-term care costs can be eye-opening even here.

The article suggests having the option of returning to work could be a “linchpin” for your retirement plan. That’s because your work experience is more highly valued than ever thanks to the lack of new folks coming up the system to fill your job, the article continues.

“These employees are valuable because they are seasoned, and that’s not always easy to find today,” Charlotte Flores of BH Companies states in the article.

The article goes on to note that of the five million Americans who left the U.S. workforce during the pandemic, “more than two-thirds were over 55.” Now there are five job openings for every three U.S. workers.

“Employers are not only eager to hire experienced older workers, but they’re also open to bringing in retirees who’ve been out of the workforce for several years,” the article continues.

This rehiring of otherwise retired workers is called a “returnship,” the article explains. Large U.S. companies, such as Goldman Sachs, Accenture, Microsoft and Amazon have developed “returnship” programs.

“The programs are designed to give returning workers training, mentoring, a chance to learn or brush up on skills and lessons on how to navigate the current work culture. The trend is so strong that there even are “career-reentry” firms that specialize in connecting employers with returning workers, such as iRelaunch, which works with 70 companies offering returnships, including posting openings,” the article states.

Another benefit of going back to work after retirement, the article says, is that you can either “delay or reduce withdrawals from retirement accounts,” a decision that “stretches out your retirement nest egg to lessen your longevity risk.”

Here in Canada, that certainly would be true of any withdrawals from a Tax Free Savings Account or from a non-registered investment account. We have heard of defined benefit pension plans in Canada that permit you to stop receiving pension payments (temporarily) if you return to work – and let you resume contributions. We haven’t heard of there being ways to temporarily pause withdrawals from a registered retirement income fund (RRIF), however.

Many observers here in Canada have talked about making it possible to delay RRIF withdrawals, and continue to contribute to RRSPs, until later in life. Save with SPP spoke to Prof. Luc Godbout on this topic in the spring.

It sure seems like the old days of full retirement – our dad left work at 62 and never did a single lick of work again for the remaining 27 years of his life – may be gone forever. Not saying that’s a bad thing – a little work keeps your mind sharp and social contacts alive – but the concept of full retirement at 65 does not appear to be as likely in the 2020s as it was 30 or 40 years ago.

Whether or not you plan to fully retire in your 60s, 70s or later, you’ll need some retirement income. Most Canadians lack workplace pension plans and must save on their own for retirement. Fortunately, the Saskatchewan Pension Plan is available to any Canadian with RRSP room. This do-it-yourself pension plan invests the contributions you make, pools them and invests them at a low cost, and at retirement, turns them into an income stream. You can even get a lifetime annuity! Check out this wonderful retirement partner today!

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Years ago, when we were working away at Lakehead Living in Thunder Bay, Ont., a colleague asked us if we were contributing to a registered retirement savings plan (RRSP).

“What’s that?” we asked. And once it was explained that you would get a tax refund for contributions made to an RRSP, the 25-year-old us was in – starting off at $25 per month.

What’s the best retirement savings tip out there? Save with SPP decided to have a look.

Start saving today, advises the Merrill division of Bank of America. “Start saving as much as you can now and let compound interest — the ability of your assets to generate earnings, which are reinvested to generate their own earnings — have an opportunity to work in your favour,” the bank advises.

At the InvestedWallet blog there are two tips of note – to “fund your retirement account with side hustles,” and to “ditch the lavish vacations.”

Using “side hustles,” such as “flipping furniture, using a 3D printer to make money, or completing freelance gigs” is a great way to boost savings – direct your profits there, rather than to buying furniture or taking trips, the blog advises. And on big annual trips, Invested Wallet suggests cutting back on “destination” vacations (the average vacation in the U.S. costs $1,145 per year) and instead, doing something affordable during time off and putting the saved cash into retirement.

The Forbes Advisor offers up a couple of good tips – get rid of your debt now, and not after you are retired, and “practice retirement spending now.” The first one needs no further explanation – debt is harder to pay off when you are living on less.

The “practice” tip is intriguing. Basically, the article suggests that most retirees will live on 80 per cent of what they were earning before retiring. We had a friend who was fearful about living with her first mortgage. So her husband said look, let’s bank the difference between our rent and the mortgage in the run-up to buying the house, and live on the reduced income. This idea worked, her fears were abated and by now we’re sure that house is paid for.

At Sun Life, a variety of tips are included, with a sound bit of advice being “take full advantage of your employee pension plan.” A lot of times, the company pension plan may be optional. You don’t have to join. But if you don’t, you are missing out on putting away money for retirement, often with an employer match.

If you are in a defined benefit pension plan, be sure to find out if there are ways to purchase service for periods of time when you were off on a maternity or parental leave. Your future you will thank you later.

We’ll add a few others we have gleaned over the years.

Make your saving automatic – contribute something towards your retirement every payday, and up it when you get a raise. You will be paying yourself first.

A nice place to put your Canada Revenue Agency tax refund is back into your SPP or RRSP account. You’re making the refund tax-deductible.

Start small. We started with $25 a month nearly 40 years ago. Don’t think you have to start off big, or you may never start off at all!

If you haven’t started saving yet, a wonderful resource to be aware of is the Saskatchewan Pension Plan. It’s open to any Canadian with RRSP room. With SPP, you can contribute any amount you want, up to $7,000 per year, and can transfer up to $10,000 a year from other RRSPs. SPP will pool your contributions, invest them at a low cost, and grow them into a future source of retirement income. Check out SPP today!

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Canada no longer a top 10 country for retirement security: Natixis survey

A “decline in financial well-being and happiness” is cited among the reasons why Canada is no longer a top 10 nation in retirement security.

Writing in the Financial Post, Victoria Wells reports Canada has dropped to 15^th place (from 10^th place last year) on the Natixis Investment Managers ranking of the countries that offer the highest level of retirement security.

“The main reasons for the drop, Natixis IM said, are a decline in financial well-being and happiness, increased tax burdens, a rapidly aging population and environmental factors, such as a lack of biodiversity,” Wells reports.

She further notes that this dip in retirement security levels coincides with “soaring inflation, aggressive interest rate hikes and a wobbly stock market,” all factors making 2022 “one of the worst years ever to retire.”

In the article, Dave Goodsell of Natixis notes that the study found 65 per cent of Canadians surveyed are “underestimating their life expectancy,” and “61 per cent haven’t considered how much inflation will impact their finances.” A further 60 per cent, he states in the article, “aren’t planning for additional healthcare costs” as they age.

Another problem for the retirement system, the article reports, is the strain on the Canada Pension Plan (CPP) system as “the number of seniors boom in relation to younger workers who pay into CPP.”

“Investment strategies, financial planning, employee benefits and policy considerations will all need to factor in a new funding equation that accounts for inflation, interest rates and increased longevity,” Goodsell states in the article.

The top three countries for retirement security are Norway, Switzerland, and Iceland, the article concludes.

Another factor not noted in this article is the huge increase in retirements in this country. The Peterborough Examiner reports that retirements are up 50 per cent in Canada versus last year. The Examiner cites Statistics Canada data from August that showed 307,000 Canucks had retired in the last 12 months, versus 233,000 a year earlier.

As well, the Examiner article reports, 12.9 per cent of Canadians say they are planning to leave their jobs for retirement soon – that figure again is from August of this year.

So, summing it up, a record number of Canucks are heading out of the workplace for the last time, despite the fact that markets are unstable, inflation is at decades-high levels, and interest rates are soaring – the latter bit of news being good for savers but bad for debtors.

It’s worth noting that the CPP has a massive contingency fund, run by CPP Investments, that currently has $523 billion in assets according to a recent news release. So if we ever do get to a point where the contributions to CPP made by workers aren’t enough to pay CPP pensions, there’s a large keg of money that can be tapped at that time.

However, it’s best to have multiple streams of retirement income to rely on in the future. If you have a workplace pension you are ahead in that game. If you don’t, or want to augment your overall savings, a helpful tool is the Saskatchewan Pension Plan, a defined contribution plan that’s open to any Canadian with registered retirement savings room. Contributions you make to SPP are pooled, invested professionally at a low cost, and are grown prudently until you are ready to convert savings to retirement income. Check out SPP today!

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