Higher interest rates spell trouble in ’23 for borrowers

A wise colleague once told us that debt was “the slayer of retirement dreams.”

And, according to an article by Pamela Heaven in the Financial Post today’s rising interest rates are giving that slayer even more teeth.

The article notes that at least one more rate hike is expected from the Bank of Canada early this year, which will bring the policy rate to 4.5 per cent. That compares to a rate of 0.25 per cent at the beginning of 2022, the Post reports.

The article quotes a TD Economics report that suggests that the impact of a rising policy rate for Canadian borrowers has “only just begun.” That’s because there is usually a lag between the start of higher rates and the end of a mortgage period or car loan, the article explains.

“Debt service costs rise with a lag as mortgages and loan payments are renewed at current market rates,” state the authors of the TD Economics report in the article.

While household debt levels actually dipped during the lockdown years of the pandemic, they are experiencing a sharp rise today, the article notes.

“Canadians who piled on debt when it was cheap now have to contend with interest payments on debt that is more expensive, and could get even more so,” the article adds.

“Up to 18 per cent of fixed-rate mortgages come up for renewal (this) year and borrowers looking to renew will be facing the highest interest rates in 20 years,” the article says, again quoting the TD Economics report.

“In the third quarter of (2022), a borrower who took out a $500,000 mortgage in 2017 was paying $700 more a month on renewal,” notes the TD report.

Well, one might think, it’s good that we all saved so much money during the pandemic’s lock-downiest days, right?

“One bright spot is the personal savings that Canadians accumulated during the pandemic, which could provide a cushion to rising debt costs. However, with interest rates expected to remain at higher levels over 2023, TD expects much of these savings will go to paying debt costs,” states the article.

If there is any positive news about higher interest rates, it’s the fact that Guaranteed Investment Certificates (GICs) are suddenly looking more attractive.

Writing in The Globe and Mail, noted columnist Rob Carrick asks why people are risking investment dollars in the volatile stock market when GICs and other fixed-income investments are offering interest rates close to five per cent.

“In the low-interest decades of the past, stocks were essential to reach your investing goals. But with 5-per-cent returns available from both bonds and GICs, how much do investors need stocks?” he asks.

It will be interesting to see, as we move along in 2023, whether more investors do begin to shift some of their investments towards less volatile fixed-income. Save with SPP can remember that crazy days of the late 1970s and early 1980s when interest rates were in the teens, and you could expect 18 per cent interest on a car loan. It doesn’t seem (today) like we are anywhere near those bad old days — thank heavens!

A balanced approach is usually a wise one when it comes for investing, and members of the Saskatchewan Pension Plan are aware of the “eggs in different baskets” nature of the SPP Balanced Fund. Looking at the asset mix of this fund, it appears that 40 per cent of investments are in Canadian, American and global equities, and the rest is in bonds, mortgages, private debt, short-term investments, real estate and infrastructure. Keep your retirement savings in balance, and check out SPP today!

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The Kids’ Money Book by Jamie Kyle McGillian is that long talked-about and much-needed resource for young people that’s designed to teach them everything they need to know about money.

It’s written in a breezy, clear, and kid-friendly way, with plenty of diagrams, quizzes and fun facts. Although the book is intended for U.S. kids it is still totally relevant for a Canadian audience.

McGillian beings by remarking how her own two daughters used to spend all their pocket money on “candy and costume jewellery,” but have now graduated to coffee, music and apps for their phones. “In the past decade, as my little spenders have grown into big spenders, the world of money has changed, thanks to technology,” she writes.

A study by U.S. investment bank Piper Jaffray found “teens spend more of their cash on food than anything else” at places like Starbucks, Chipotle, Chick-fil-A and Panera Bread. Clothing is next, at 20 per cent, with top brands being Nike, Forever 21, American Eagle and Ralph Lauren, the book notes.

After a look at the history of money from bartering all the way up to bitcoin, the book’s first quiz doles out some good advice, such as to “nurture you own interests in responsible ways, make solid decisions that reflect good judgement,” and to “put a price on fashion and ask yourself — is it worth it?” Other advice is being generous and charitable.

“Grown-ups who don’t learn money sense when they are young often learn the hard way,” the book advises. “Even if they do avoid big money mistakes, always worrying about paying bills and not having enough money to take care of the family are not fun. Learn to make smart money decisions and you’ll have a better chance of leading the kind of life that you want to,” writes McGillian.

And that’s what the book does. A chapter on the difference between wants and needs leads the reader to logical conclusions. “It’s all right to have a lot of wants, but the idea is to keep them in check,” she writes.

Later, we learn that folks with money smarts don’t give in “to the little voice in his or her head that screams `I want it now,’” and are happy with what they have (and not unhappy about what they don’t have). That’s because they “know how to make money work” for themselves, are “usually careful and precise with money” and aren’t wasteful, the book advises.

The section on allowances advises kids not to “spend every penny of your allowance. Leave at least a little for savings and sharing.” As well, the book advises young readers to “think about it carefully” before committing to a large purchase.

The book talks about ways younger folks can earn more money than just allowance, through babysitting, car washing, caring for pets, or creating arts and crafts. There’s a chapter on how to “increase your earning power” by boosting your casual conversation skills, selling yourself and your abilities, and keeping a sense of humour.

There’s a great, simple little chapter on budgeting — set aside money for school lunch, snacks, clothes, entertainment, “drugstore and miscellaneous spending,” and you can have money left over “for saving, sharing and investing.”

On shopping, the book advises young folks to be smart consumers. “Comparison shop. Judge different brands of products against each other. Talk to friends and relatives before you buy. Find out what brands they are most satisfied with. Research the product.”

The “Investing 101” chapter provides a nice overview of bonds, stocks, exchange-traded funds (ETFs) and more. The credit card section highlights the good and importantly, bad things about credit cards — annual fees, interest charges, and the ability “to start spending more than you can actually afford.”

This is an excellent book that helps deliver the medicine of basic financial literacy with the sugar sweetness of gentle writing, lots of graphics, fun quizzes and simple examples. Well done Ms McGillian!

The Saskatchewan Pension Plan is open to Canadians 18 and older (up to age 71). Check out our video, What is a Pension Plan? (link) on our home page for an overview of this made-in-Saskatchewan retirement savings success story. It’s never too early to start saving for retirement!

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StatsCan study finds retirement income rates better than expected

Writing for the Advisor’s Edge blog, James Langton reports that — after research by Statistics Canada — that “retirement has been turning out better than expected for many Canadians.”

StatsCan recently published data from a follow-up study from a group of retirees, who were first surveyed in 2014 with a follow up two years ago, the article notes.

The research found that “retirement has been comfortable financially for more people than expected,” the article reports.

In 2014, 67.5 per cent of respondents said “they expected their retirement income to be adequate, or more than adequate, to comfortably maintain their standard of living,” the article states.

Jump ahead to 2020, and “81.6 per cent found that their retirement income was sufficient to comfortably cover their living expenses,” the article adds.

The StatsCan study found a similar increase in satisfaction levels among both women and men, the article continues. In 2014, 68.5 per cent of men and 66.4 per cent of women “expected to have an adequate retirement income,” the article reports. But by 2020, those numbers jumped to 82.2 per cent of men and 81 per cent of women, the Advisor’s Edge article tells us.

Those with disabilities and with high school education or lower also saw improvements in their retirement income, the article concludes.

In 2014, the article reports, 72.4 per cent of those with a disability and 73.5 per cent of folks with high school educations or less said they had adequate retirement income. Those numbers jumped in 2020 by “17.1 and 23.2 percentage points, respectively,” the article concludes.

According to a post on the CHIP reverse mortgage site, “the average retirement income in Canada currently sits at $65,300 per year, per household (before tax). That works out at $32,650 per person, if the household includes a couple.”

It’s not stated in the Advisor’s Edge piece at what income threshold people become happy with their retirement income, but we can probably assume they are making the average amount or better.

Some of that $32.6K per person will come from government sources, such as the Canada Pension Plan, Old Age Security, or the Guaranteed Income Supplement. Traditionally, the rest of a person’s retirement income comes from two other sources — workplace pensions and personal savings.

Employers — are you offering a retirement program for your team? Did you know that the Saskatchewan Pension Plan can help you deliver a retirement savings program at your workplace? The scaleable SPP works for both large and small businesses, and relieves you of the heavy lifting of collecting and investing contributions and distributing statements and tax slips. Check out SPP today!

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You’re enjoying your retirement party, your last paycheque is about to be deposited, and soon you’ll be cracking into your retirement savings.

All smooth sailing? Well, it can be if retirees are aware — in advance — of some of the bumps in the road ahead. Save with SPP took a look at the most common risks faced by those of us who are retired.

If your retirement savings are invested and you plan to live off the proceeds, investment risk and inflation should be near the top of your list, reports the Financial Post.

“Turbulent markets, soaring inflation and a higher cost of living are all impacting older workers that are transitioning to full or part-time retirement,” Mercer Canada’s F. Hubert Tremblay tells the Post.

The Kiplinger website adds a few more. Will you outlive your savings, the article asks? That’s known as “portfolio failure risk,” and can happen even if you have a set withdrawal rate, such as taking out no more than four per cent of your savings each year.

“Another withdrawal method is guessing how long you’ll live and dividing your savings by 20 to 30 years—but what happens if you live 31 years,” the article asks.

They also cite “unexpected financial responsibility risk” as being a possible challenge — this would involve having to help out adult children or ageing parents — or both.

The Wealth of Geeks blog offers up a few more risks, including a surprising one — frustration.

“Retirees are frustrated with their retirement,” the article notes. “On average, retirees rate their satisfaction in retirement as 7.0 out of 10 in 2022, compared to 7.4 in 2020. Similarly, retirees ranked their alignment of life in retirement with their prior expectations at an average of 6.4 in 2022, down from 6.8 in 2020,” the article continues.

A lot of the frustration is linked to inflation — the fact that everything costs more than it did even a year ago, the article continues. Having less to spend than expected while on a fixed income becomes a source of frustration, the article explains.

Forbes magazine sees three chief risks for retirees. The first two, inflation and investment risk, we’ve covered — but the third is possibly even more important — longevity risk.

“While there are a lot of benefits to living a long time, longevity increases financial risk. You need to pay the living expenses for all those extra years. Also, your annual expenses might increase, because people generally need more medical and long-term care as they age,” the Forbes article explains.

Save with SPP has been embedded in the camp of retirement for more than eight years now, and we can add another risk to the list — carrying debt into retirement.

According to the Canadian Press, via CP24, Canadians have $1.83 in debt for every dollar they earn.

While that’s bad, having debt when retired (and living on less income) is worse. Trying to reduce debt prior to retirement is, in many people’s opinion, almost as important as retirement savings.

It’s a daunting list of potential pitfalls. The best way to arm yourself against future risks is to have retirement savings and thus, future retirement income.

If you have a pension or retirement system through work, you are ahead of the curve. If you don’t, consider the Saskatchewan Pension Plan. SPP is a pension plan any Canadian with registered retirement savings plan (RRSP) room can join. SPP will take your contributions, as well as transfers from other RRSPs, and will grow them efficiently in a pooled fund offering low investment costs. When it’s time to turn savings into retirement income, SPP has several options for you, including lifetime annuities which guarantee you’ll never run out of income. Check out SPP today!

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Some optimism amongst older Canadians about the future

Despite frequent doom and gloom chatter regarding the ongoing waves of boomer retirements, some older Canadians say they are quite optimistic about the future.

That’s one of the findings of new research from the National Institute on Ageing. Investment Executive’s Maddie Johnson recently reported on the latest NIA findings.

The report found that 63 per cent of Canadians over 50 surveyed are “feeling positive about aging,” the article notes.

“What’s more, the oldest Canadians in the survey — those 80 and over — felt the best about growing older, expressing a more positive attitude toward most aspects of aging compared to those aged 50 to 79,” Johnson reports.

This is good news, the article continues, since it comes at a time when “Canada is facing unprecedented demographic realities with Canadians aged 65 years and older representing the fastest-growing segment of the population.”

Why are older Canadians optimistic?

Seventy per cent of respondents reported they had “strong social networks they could rely on,” the article notes. Sixty per cent said they were “socially engaged” and 72 per cent felt their financial resources were “adequate,” the article continues. Sixty-eight per cent felt they had “access to the healthcare and community support services they needed,” and 89 per cent “had confidence in their ability to age in their own homes,” Investment Executive reports.

There were a few points of concern noted in the research, the article reports.

Fifteen per cent of respondents reported being in poor health, and 26 per cent said their retirement income was “inadequate,” the article reports. As well, of the survey respondents who were still working, only 35 per cent said they were going to be able to “afford retirement when they wanted it,” and 37 per cent said they were not “in a position to financially afford to retire,” the article states.

Nineteen per cent said they were “stretched” for income and seven per cent reported “having a hard time,” the article adds. Four in ten, the article concludes, were at risk of “social isolation.”

These last points of an excellent Investment Executive piece are important. You’ll need to develop new social networks after you leave the workforce. It was for this reason that Mrs Save with SPP decided to sign us up for line dancing, and after six years, we are not only reasonably competent line dancers but have a new network of friends we hang out with.  

As for the financial side, those of us who are working and who have access to a workplace pension program are probably not going to be worried about the adequacy of their retirement income in the future. If you’re on your own as far as retirement savings goes or if your employer is looking for a pension option for you, why not partner up with the Saskatchewan Pension Plan? More than 32,000 Canadians belong to this open defined contribution plan — why save on your own when you can tap into SPP’s pension expertise and low-costed pooled investing? Check out SPP today!

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It’s an age-old question — and also, an old age question: do people spend less money as they age?

For answers, Save with SPP reached out by email to Dr. Susann Rohwedder of the RAND Corporation in California. She recently discussed the findings of a 2022 research paper, entitled Explanations for the Decline in Spending at Older Ages (Rohwedder, Hurd, Hudomiet 2022).

In her presentation on the research, Dr. Rohwedder says it is important for people to be aware of what their spending patterns in retirement could be, in order to plan on how much to save. Her research suggests that real household spending (adjusted for inflation) declines as people age and their health declines. 

We asked her a few questions on the general finding that people spend less as they age.

Should people be more or less concerned about running out of money?
Our findings are about the shape of the spending trajectory which helps individuals and households better anticipate their spending needs over their retirement years. We consistently find declining (real) spending trajectories across various groups, and it appears that for most households the declines are due to reductions in enjoyment related to various types of spending as health declines and other ageing related changes occur (e.g. widowing, loss of friends/social contacts). Households who thought that real spending would increase with age could use this information to update their expectations, possibly easing some worries of running out of wealth.

Often income replacement rates are mentioned as a retirement savings target — what do you think of this kind of planning target?
Regarding replacement rates, I do not find them a useful concept for financial planning for retirement in a world of where much of retirement wealth is not annuitized, and where the concept of retirement is not that well defined (such as retirement in dual earning households; and what about those who return to work/unretire?). In their financial planning for retirement, households should start with considering their spending needs over the course of their retirement years. Because of the shorter time horizon, working out desired living standards for the early retirement years tends to be easier than anticipating spending needs some 20-30 years into the future. Once having decided on the level of spending at the beginning of retirement, households can use the shape of the spending trajectories, that is, the rates of spending change that we have estimated, as a broad guide for how their spending will evolve in their later retirement years. Contrary to the common assumption that real spending in retirement will be constant or even increase, we found that spending tends to decline for most households, and this does not appear to be the result of tightening budget constraints with age. This is also what we found in another recent report on Spending Trajectories After Age 65.

Do people oversave?

Some do, some don’t … there is substantial variation across households. An important consideration in this regard is the economic position of households throughout their working years. Among households that reach retirement with few economic resources, some were not always poor and could have saved more. Those who have always had to live on very limited means, saving more earlier in life would have meant cutting necessities (food, rent, etc.). This demonstrates that the assessment of over- or under-saving should be viewed in the context of households’ lifetime resources.

Our finding about the shape of spending trajectories at older ages is a critical input to improving financial planning for retirement and also to assessments of whether people over- or undersaved. For individuals and their households is not easy to anticipate spending needs some 20-30 years into the future. Traditional wisdom suggests flat or even increasing spending at older ages. However, our estimates suggest that spending after age 65 declines consistently by about 1.7 – 2.4 per cent in real terms. This finding applies broadly, even among those in the highest initial wealth quartile, and our earlier paper provided plausible explanations for declines in spending at older ages: declining health and other factors that reduce enjoyment of some types of spending. While financial constraints play a role for some, we did not find evidence of tightening financial constraints at advanced ages.

Are there any other findings in this context you found surprising?

In the second (and quite related) report we showed that there was only modest variation in the estimated declines in spending by initial wealth quartile (measured when the individual was between 65-69 years old). So, even among those in the highest initial wealth quartile we found very similar rates of decline in spending as for less well-to-do households. This reinforces our earlier findings that the declines in spending are for the most part not driven by tightening budget constraints with age.

We thank Dr. Susann Rohwedder for answering our questions.

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Boomer retirements are creating a labour shortage across the country

For many, many years predictions of a “grey tsunami” of boomer retirements were linked to expected increases in the costs of healthcare and government retirement benefits.

But those retirements are also causing a labour shortage, the Canadian Press (via Global News) reports, that is now upon us.

The story, written by CP’s Amanda Stephenson, reports that the current wave of boomer retirement parties is making some employers quite nervous.

Dan Gallagher of Fort McMurray, Alta.-based Miskew Group tells CP “I take a walk around our shop, and around our field service workforce, and I can clearly see that demographic. It’s aging.”

Miskew, the article notes, already has been having labour shortage problems and has had to recruit from as far away as Australia.

“The ratio of apprentice to older worker here has been so low for so long that there just isn’t the bench strength to offset the people who are leaving,” Gallagher tells CP.

The article notes that “a looming wave of retirements” by baby boomers, those born between 1946 and 1964, has long been predicted by experts, and is now creating a mass exit from the workforce.

The size of the workforce has been trending downward since 2000, the article reports, but the “grey wave…. is now crashing ashore.”

As of the second quarter of 2022, there were over a million job vacancies in Canada, the article notes. And while the participation rate amongst employed Canadians has nearly returned to pre-pandemic levels, the stats suggest that the exit of older workers is driving the labour shortage.

Citing recent research from Scotiabank, the article reports that “the decline in overall workforce participation that does exist is entirely due to Canadians aged 60 and above exiting the workforce. That means the real root of the current problem is Canada’s aging population, and it has broad implications for the country’s economy.”

Patrick Gill of the Canadian Chamber of Commerce tells CP that 36 per cent of Canadian businesses are reporting labour shortages, a figure that jumps to 45 per cent in the manufacturing sector and 58 per cent in food and accommodation.

“It translates to everyone working more hours, and that ultimately affects quality of life. It means slower growth, and it’s also a factor in supply chain delays,” Gill states in the article.

The article concludes by saying that a younger workforce is now “a new reality,” and employers are going to have to go that extra mile to attract and retain new talent.

“Labour is going to be very difficult to find and employers are going to have to work hard to attract employees,” the University of Toronto’s Rafael Gomez tells CP.t

This is a very interesting report.

For younger people, this labour shortage represents a time of employment opportunity not seen for many decades, where there are suddenly a lot of good jobs out there to be filled. Let’s hope employers take a page out of the past — we are thinking the post-war boom, but even into the ‘60s and ‘70s — and begin to offer more and better retirement programs to attract new talent.

If you don’t have a workplace retirement savings program and are on your own for retirement savings, take a look at the Saskatchewan Pension Plan. It’s open to any Canadian with registered retirement savings plan room. Let SPP do the heavy lifting of retirement investing and asset growth, while you focus on making regular contributions to your future. When you too are ready to depart the workforce, your SPP account will be there for you, ready to be converted into retirement income. Check out SPP today!

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We tend to learn from our experiences, and as the old saying goes, wouldn’t it be great to be able to communicate back to our younger selves and lay out some warnings about curves in the financial road ahead?

That’s what Carey Siegel’s book, Why Didn’t They Teach Me This in School, tries (successfully) to achieve. Ninety-nine very helpful financial tips are presented in a friendly, factual and frank fashion.

“If you can’t afford something when you’re dating, you most likely won’t be able to afford it when you’re married,” the book begins, urging us to marry — and stay married — to the “financially right” person. A later chapter suggests that a down payment for a house would be a better gift than a lavish wedding.

On first jobs, the book notes that “most young adults feel that if they do more than the minimum, the company is taking advantage of them. On the contrary, the more you put into your first positions, the more knowledge you will gain for jobs later in your career.”

Another interesting tip is to “save/invest 50 per cent of every salary increase.” The author notes that holding to this principle “will put you ahead of the game. If you do this every time you get a raise, you will find yourself ultimately saving a significant amount (upwards of 50 per cent) of your income and investing it in your future.”

If thinking of buying your first car, be sure to shop around to see what your new insurance, license and other costs will be. Factor in maintenance, gas, and parking if you haven’t owned a car before — otherwise you will be grimly surprised later. The same is true of your first home — get an idea of taxes, the mortgage rate, and tally up the cost of water, electricity, heat, snow removal, and maintenance.

An interesting savings tip is to drop “unhealthy” spending habits, the book advises. A pack-a-day smoker will save $2,000 a year by quitting, and this doesn’t include “the cost of lighters, breath mints, dry cleaning, etc.” You may also save on insurance. Similarly, the book advises, cut back if you are buying a case of beer each week or eating at fast-food outlets three times a week.

Another “classic” tip is to pay all your bills on time each month. “If you pay everything you owe on time every single month, you will prevent yourself from developing a money management problem,” the book continues. Ditto for amounts owed to the taxman — pay them on time if you can, author Siegel advises.

Debt, he writes, is a key consideration in money management. “Stop spending more than you have,” this section begins. Stop using credit cards, and try to pay solely with cash and debit cards. Keep one card for emergencies, and “throw away the rest of them,” the book suggests. Then, tally your debt and make a plan to pay it off. Siegel advises that you “pay off the highest interest rates and smallest debts first (so you have quick, easy wins).”

The chapters on investing suggest the novice should have a diversified portfolio with exposure to both stocks and bonds. Low-cost exchange traded funds that are invested in stock and bond indices are recommended in the book.

Don’t jump into investments because your friends are touting something or you want to play a hunch, the book warns. “Of the 20 or so `can’t miss’ stocks friends have told me about, only two performed reasonably well,” Siegel writes.

This is a nice, simple to understand and to-the-point set of useful tips. Well worth a look!

If you worry about managing your investments, take a look at the Saskatchewan Pension Plan. SPP will manage your retirement savings for you, using expert financial managers at a low cost to you, thanks to the pooling of investments. SPP will grow your savings over the years and when it is time to harvest retirement income, they’ll get that rolling for you as well. You even can choose a lifetime annuity for some or all of your SPP account balance. Check out SPP today!

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CPP benefit seen as modest in an environment where many lack workplace pensions

Writing in The Globe and Mail, David Lawrence provides a reality check for those of us thinking federal retirement benefits will cover our retirement costs.

He notes that the maximum benefit available from the Canada Pension Plan (CPP) for a new recipient in 2022 is $1,253.59 per month. But worse, not everyone gets the maximum — Lawrence writes that the average CPP payment this year is a mere $727.61 per month.

The traditional “three pillars” of Canadian retirement, he writes, are changing. While government pensions like CPP and Old Age Security (OAS) provide one pillar, and personal savings another, the third is pensions, which Lawrence says are not generally accessible to those who are self-employed or working on contract.

In fact, many people just don’t have a workplace pension, the article notes.

“While it used to be that clients were maybe worried that their pension wasn’t going to be enough, over the past 15 years we’ve encountered more clients who simply don’t have a pension [through their employer],” Tom Gilman, senior wealth advisor and senior portfolio manager with Gilman Deters Private Wealth at Harbourfront Wealth Management Inc. in Vancouver, tells the Globe.

Those who do have a pension are “more confident” about their retirement cost of living than those without, Gilman states in the article.

He also tells the Globe that your personal “income tax profile” should help you decide whether a registered retirement savings plan (RRSP) is a better retirement savings vehicle for you than the usual alternative, the Tax Free Savings Account (TFSA). Some people need the tax deductions associated with an RRSP more than others, the article explains.

Those who are going to live off their investments need to think about how best to structure their portfolio, states Laura Barclay of TD Wealth Private Investment Counsel in Markham, Ont., in the Globe article.

“For her, the holdings that best mimic a pension plan with stable, long-term payments are high-quality, blue-chip dividend-paying stocks,” the article notes.

Barclay tells the Globe she advises her clients to look for “high-quality companies… with growing earnings,” and that also pay dividends. Diversification is also important, she states in the article.

Harp Sandhu, financial advisor with the Sandhu Advisory Group at Raymond James Ltd. in Victoria, tells the Globe he takes a “tortoise” approach with his own retirement investments — “slow and steady wins the race,” the article notes.

If you are starting to save for retirement while older, don’t pick risky investments with high returns in the short term to try and catch up, Sandhu tells the Globe. Things can go wrong with such investment choices, he tells the newspaper.

If you ever have an opportunity to join a pension plan or retirement savings arrangement through work, be sure to join, and contribute as much as you can. When retirement savings is a deduction from your paycheque, you’ll quickly forget about it and will be happy, when you retire, that you’re getting more than just standard government retirement benefits.

If there isn’t any retirement program available for you, perhaps because you work on a casual or contract basis, the Saskatchewan Pension Plan may be of interest. Any Canadian with available RRSP room can join. If you have bits of pieces saved in multiple RRSPs, you are allowed to consolidate them within the SPP — you can transfer in up to $10,000 per year. Check out SPP today — it may be the retirement solution you’ve been searching for!

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As the New Year begins, Save with SPP decided to have a look around for some new and different resolutions on that perennial topic, savings.

At the Michelle is Money Hungry blog we learn a good one — simplify your budget.

“It’s my personal belief that most budgets may be too complicated and that’s why it’s hard for people to keep track of everything,” she writes. Consider using an app like Personal Capital, Mint or You Need a Budget, she continues.   These tools “help you identify leaks in your budget,” she notes — like her personal one, which is coffee shop visits.

We like her thinking here — unless your budget is easy to use, and doesn’t require a ton of time to get through, you probably won’t follow it. Fix it with something easier.

The Street offers up another one we haven’t seen before — make your money goals in 2023 “cyclical.”

The article explains that most people make “linear” financial goals, such as “I need to save a million dollars for retirement,” then plunk down a couple hundred dollars a month, thinking they are now on track. “Every time you contribute a couple hundred dollars, you’re using a spoon to empty the ocean.” You are falling behind on your target without realizing it, the article explains.

By contrast, a “cyclical” approach “means paying less attention to long-term goals and instead focusing on each “cycle” for its own sake, the article tells us.

“For example, say you set a goal to save [a certain amount from] each paycheque,” Australian academic Leona Tam states in the article. “If you didn’t put away [that amount] from your last paycheque, you need to try to catch up immediately in your next paycheque. Catching up means you need to put up double the amount. That’s quite hard.” In other words, going cyclical makes it harder on you if you fall behind, which may make the approach succeed.

OK, so we have simpler budgeting and a “cyclical” approach to saving. What else is new in the resolution department?

The Life and a Budget blog has another fairly unique one — “do one frugal thing a day no matter how small.”

“No matter how small it is, making one single decision every day can change your finances,” the blog explains. Examples include setting a food budget, creating a meal plan and using it for shopping, eating at home, bagging your lunch and using up leftovers. Trying to do this all the time might seem hard, but we like the idea of doing only one such good financial deed per day — there’s more chance of success.

Finally, the Positively Frugal blog suggests we all need to “develop a positive mindset” about our finances.

“Your self-talk can have a big impact on your money aspirations and your overall outlook on life,” the blog explains. “If you find that you have negativity swirling around your head space, make a new year’s financial resolution to interject positive affirmations for money into your daily routine.”

We’ll throw in one more that we learned from a recent CTV Ottawa interview with an 111-year-old veteran. Asked what advice he would give those of us hoping to live as long a life, he said that first, you need to be happy and kind, but also that “if you have a problem, fix it.”

Don’t stress yourself out worrying about things like a money problem — focus on solving it and moving past it, the gentleman said.

That’s a good thought as 2023 begins. We wish everyone a Happy New Year and a prosperous year ahead!

If your problem is not having a retirement savings program at work, a fix is in your reach. The Saskatchewan Pension Plan is an open defined contribution pension plan that anyone with registered retirement savings plan room can join. They’ll invest your savings at a very low fee, grow it into a retirement nest egg, and help you turn those savings into income down the road. Check out SPP today!

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