In her excellent book The Pink Tax, author Janine Rogan contends that we are living with a financial system that is “designed to keep women broke.” Her book walks us through the situation and offers sage advice and strategies for women to use to fight back.

She defines the Pink Tax as a system where women are paid less for the same work but are expected to pay more for goods and services. “I’ve seen pink-branded calculators, earplugs, kids’ helmets and clothing that cost more – it’s everywhere. Although it may seem like a few dollars and cents don’t make a big difference, it adds up. The Pink Tax costs women $82,000 by the time they are 60, and that figure only includes the things the researchers were measuring.”

Rogan advises us to “demand financial equality,” to “build wealth for self-care,” to “support new moms” and to “vote for your daughters.”

Pay gap: Speaking about the pay gap, Rogan notes that it wasn’t “until 1963 that employers (in the U.S.) were required to pay women equally for jobs that entailed the same skill effort and responsibility.”

Expanding the discussion of the wage gap, Rogan notes that not only are women paid “83 cents on the dollar” versus men, but they are “twice as likely to be in part-time jobs… (and) miss out on advantages such as health benefits or retirement contributions, which full-time positions offer.”

She recalls finding out that a man with equal standing and the same role at her company “was making $13,000 more than I was.” Lower wages mean “less money to save and to invest. The wage gap turns into a savings and investing gap, fuelling the wealth gap.”

Wealth gap: A career-long pay gap translates to a wealth gap, she explains. “Even women in the top one per cent have disproportionately lower incomes than their male counterparts, earing on average $362,000 per year while men in the top one per cent earn $392,000.”

Rogan feels that it is time for women “to take back the fight… to take the power of your money into your own hands so that together we can remedy women’s financial undereducation and all of the other inequities… let’s demolish that gap entirely!”

Noting that only 30 per cent of the world’s wealth is held by women, Rogan suggests that the “travesty on unpaid caregiving work… compounds the wealth gap. Globally, women and girls put in 12.5 billion hours per day of unpaid care work. We would add $12 trillion to the global economy per year if we began paying women and wage minimum wage for their unpaid caregiving work.”

Building wealth for self-care: “Building your wealth is a form of self-care,” writes Rogan. “Building wealth means having a financial cushion to rely on if life takes a turn for the worse.”

She walks us through a way to manage your money by aligning finances with your values.

“My top three values are spending time with the people I love and care about most (my baby and my hubby), exploring the world, and feeling financially secure,” she explains.

“Knowing what’s important to you helps you define where to allocate your money, which is a basic premise of budgeting… a spending plan for your hard-earned dollars,” she continues.

Noting that women face “up to 35,000 decisions” per day, a key to managing financial decisions is to automate things as much as possible, particularly bill payments.

“Because we are paid on the 15^th and 30^th of each month, we set up our money transfers – from chequing to savings, chequing to investing accounts, and chequing to bills – for the 16^th and the first.” Taking basic financial transactions off the constant list will “lighten your mental load,” she suggests.

She uses the same approach to automate savings for large, planned expenses – a monthly contribution to a planned Hawaii trip, another one for the child’s education, for TFSA saving and “long term savings goals, such as retirement.”

Even if you go the automation route, Rogan recommends you set up a “money date” once or twice a month to review your progress on savings and expenditures, a chance to “identify any bills you could potentially lower or subscriptions you could cancel.”

Be sure you and your partner “talk about money early and often,” discuss “your values and spending styles,” and “manage the household finances together.”

At work, she writes, don’t be afraid to ask for a raise – 68 per cent of women don’t.

While there is still much work to do to achieve gender equity, Rogan notes that “we don’t have to look far to find amazing examples of countries advancing gender equality every year.”

“Personally,” she concludes, “I’d like to see us get there in my lifetime.”

Automation is available for members of the Saskatchewan Pension Plan. You can set up pre-authorized contributions to SPP from your bank account, and you can pick the dates to coordinate with your pay dates so you are paying yourself first. You can also automate payments by setting up SPP as a bill, and using online banking. This “set it and forget it” approach is a way to build your retirement nest egg easily and automatically.

Check out SPP today!

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It’s always very difficult for those of us who are in the working world to truly envision what retirement will be like. It’s like some sort of alternate universe, or at least, it seems that way.

Life After Work by P. Alexander provides a thought-provoking, detailed, and clear look into how your future could unfold. While it is intended for a U.S. readership, the fundamental concepts in the work are of interest to a broader audience.

Alexander begins by describing retirement “as a juncture in life that beckons with the promise of freedom and newfound adventures,” warning that it “can also stir up a whirlwind of emotions, leaving us grappling with uncertainties and insecurities.”

But, Alexander reassures us, “retirement is not a destination; it’s the beginning of a grand adventure, a blank canvas waiting for you to paint with the vibrant colours of your dreams and desires.” It’s a phase where you “have the privilege of redefining life on your own terms, unburdened by the constraints of a structured workday.”

Alexander stresses the importance of “staying active and fit” in retirement. “One of the most common mistakes that retirees make is to just kick back, relax, and forget about the world,” which, while fun, “can lead to significant cognitive decline.”

Alexander calls staying physically active “vital… and also a potent tool for keeping your mind sharp.” Similarly, keeping up with the housework is “conducive to mental clarity… household chores offer a sense of accomplishment and a visually pleasing environment.” Other recommendations for staying active and fit include “developing a green thumb,” and “refining your eating habits.” Set priorities around family time, which can bring “joy and emotional well-being,” the book advises.

After a chapter on tweaking your wardrobe for your new retirement lifestyle and “look,” the book talks about the importance of having routines in retirement.

“Freedom is great, but it can lose its novelty once you run out of things to do,” warns Alexander. “This is where a routine can serve as a comforting and stabilizing force…. (it) can provide structure, maintain your health and well-being, and ensure you make the most of your time.”

In a chapter discussing retirement goals, such as well-being and health, social connections, and personal growth and learning, Alexander expands on the importance of having a sense of purpose.

“Our sense of agency and utility relies on having a sense of purpose, and that’s something that passion contributes to,” Alexander explains. “Passion gives you a reason to wake up in the morning with enthusiasm and excitement. Retirement can sometimes bring a loss of purpose for those who were deeply committed to their careers. Reigniting old passions or discovering new ones can reignite that sense of direction and fulfillment.”

A later chapter in the book looks at how you can set up your own “bucket list” of “aspirations and experiences you wish to accomplish during your lifetime.” Consider your passions – “activities, experiences or places that have always intrigued you” in setting up a list that you can “devote your energy and time to.”

At the end of a chapter on the importance of developing a social network in retirement (to replace the one you had at work), Alexander writes that “it is always possible to forge meaningful connections in your retirement years… with the right mindset and a dash of proactive spirit, you can have a vibrant social life that enhances your retirement journey.”

There’s a helpful chapter on budgeting – figuring out your sources of retirement income and balancing that out against your expenses. That can help you understand how much you need to save for retirement, Alexander writes.

“The sooner you start saving for retirement, the more time your investments have to grow. Understanding your timeline is crucial for setting realistic goals.”

This fact-laden book is a great read for anyone gearing up for life beyond work.

“Planning can be your essential best friend,” Alexander concludes. “Create a roadmap for your retirement that aligns with your dreams and values. This is the best way to make the most out of the next phase of your life.”

As the book suggests, if you haven’t already started saving for retirement, there’s still time to get rolling. If you’re saving on your own for life after work, consider enlisting the help of the Saskatchewan Pension Plan (www.saskpension.com). SPP has been securing retirement for Canadians for more than 35 years.

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Start off the New Year on the right foot – savings-wise

As the snow flies, signaling the true start of another winter, there’s an opportunity (as well as some time) to put your savings hat back on.

So writes Dale Jackson for BNN Bloomberg.

Jackson notes that he is pretty optimistic about 2024. “Canadians who invest for retirement have a lot to feel good about,” he writes, citing recent positive trends in both the U.S. and Canadian stock markets.

He offers up four “risk free ways to boost portfolio returns in 2024.”

First, Jackson says, it’s time to address debt.

“A massive five-per-cent hike in the Bank of Canada benchmark interest rate in less than two years has more than doubled monthly debt payments for some Canadian households,” he writes.

“For many, the best investment for 2024 is to pay down debt, starting with the highest rates. Balances owing on credits cards, for example, can top 25 per cent. There is no comparative investment that can produce a 25 per cent risk-free return,” he explains.

Next, he continues, is the opportunity to shore up (or create) a fixed-income portfolio.

“A big silver lining from higher borrowing rates is higher lending rates,” he writes.

“After three decades of lacklustre yields, fixed-income options such as guaranteed investment certificates (GICs) are returning more than five per cent annually.

Higher fixed-income yields bring an opportunity for investors to lower overall portfolio risk without sacrificing returns by shifting assets away from the volatility of equities,” Jackson explains.

His third strategy for boosting income is to “take advantage of tax perks.”

“Some experts say a good investment tax strategy can boost returns by 25 per cent over the lifetime of an investor. For most Canadians, that requires utilizing their registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs) and any other tax perks available,” Jackson notes.

This year, he continues, “Canadians will be permitted to contribute an additional $7,000 to their tax-free savings accounts (TFSAs). As it stands, the current limit for those who were 18 years or older when the TFSA was launched in 2009 is $88,000, but it can vary among individuals depending on withdrawals made over the years.”

He also notes that contributions to a registered retirement savings plan (RRSP) made before the end of February are tax-deductible for your 2023 taxes.

His final piece of advice is to pay very close attention to investment-related fees.

“Most Canadians invest for retirement through mutual funds, which can charge annual fees above 2.5 per cent. That means the fund would need to generate a return higher than 7.5 per cent to give investors a five per cent return,” he writes.

“Many mutual funds outperform the broader market after fees but most don’t. Consider less expensive alternatives such as basic market-weighted exchange traded funds (ETFs) with much smaller fees,” he concludes.

If you’re a member of the Saskatchewan Pension Plan, you’re already taking advantage of lower fees. SPP’s pooled, professionally managed Balanced Fund operates with a fee that is typically less than one per cent! Not a member? SPP is open to any Canadian with RRSP room, so check out SPP today and see how we can get your retirement savings plans back on track!

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