Some tips and tricks to take some of the headaches out of moving

It’s said that the only certain things in life are death and taxes. But the likelihood that you, or your family members, will move from location A to location B should be a close third on that list.

Having just finished helping one family member move, Save with SPP decided to check around the Interweb for tips on how to make the process easier, and perhaps, cheaper.

The folks at Forbes start us off with a few good ideas. Rather than running out and spending big bucks on packing boxes and bubble wrap, “consider asking neighbors and friends who have recently moved or are about to move—to save their boxes and any extra moving supplies for you. You can also stop by select retail locations like grocery, furniture or appliance stores and ask if they have any boxes leftover from their recent deliveries.”

The next one – our relative did this one with quite a bit of success – is to host a yard or garage sale to get rid of any unwanted stuff you have, rather than packing it up and dealing with it again later.

“By taking the time to get rid of any clothes, furniture or other items that you don’t want prior to your move, you create an opportunity to decrease the number of necessary movers, as well as possibly decrease the size of the moving vehicle that will be needed for your job,” Forbes points out.

A final good bit of advice from Forbes is this – to “pack strategically.” Huh?

“By packing in a way that utilizes fewer boxes, you can save space, time and, most importantly, money. Be tactical with your packing by nesting some items inside of others, rather than just thoughtlessly tossing all of your things into boxes,” Forbes explains.

The Money Excel blog adds an important one – the need to “declutter your house before the move.”

“You need to make categories—to donate, to sell, and to throw away. The donation pile may consist of old winter clothes and boots that can be useful to people who do not have the money to buy them. The pile for selling includes old kitchen appliances that you cannot take with you. The trash pile is for documents you no longer need, such as old income tax returns from five or more years ago. This pile can also include broken, heavier items that no longer have a purpose, meaning you’ll be able to toss out old furniture and other items into your waste dumpster to lighten the load too.”

The From Frugal to Free blog suggests considering a “hybrid move,” rather than going all-in with professional movers or choosing the labour-intensive DIY route.

“A hybrid move combines the best of both professional and DIY moving. Hire professional movers for heavy and bulky items, like furniture and appliances, while handling smaller, more manageable items yourself. This method can significantly reduce costs compared to hiring movers for the entire job,” the blog notes.

Another nice tip (one that we’ve used) is to “notify your utility companies well in advance of your move to avoid rush fees or penalties.” We used to keep the old utility bills (such as electrical or heating bills) from location A to show the utility folks at location B we were good bill payers, this often helped waive some hookup charges at the new location.

Finally, think of the tax breaks that may be out there for you, suggests MoneySense.

If you are moving to start a new job or for education, hang on to all your moving expense bills, because you may be able to claim them, the article notes.

“One of the key criteria for qualifying is that your move must take you at least 40 kilometres closer to a new work or post-secondary location (the shortest public route is considered). In addition, the move must be made to earn income at that new location from either employment, self-employment or to attend post-secondary school,” reports MoneySense.

These are all good tips. Our relative used both a garage sale and also social media to turn clutter – items that were still good, but not needed at the new location – into cash. A lawn mower, a BBQ, an outdoor hot tub, and appliances all generated more cash to help defray moving costs.

If you are moving to a new place for a new job, and are a member of the Saskatchewan Pension Plan, there’s at least one thing you won’t have to pack. SPP is a portable plan. Changing employers doesn’t affect your membership, and you can simply continue contributing when you land at your new job. It’s another way SPP helps you build a secure retirement.

Check out SPP today!

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Are Canadians putting enough away for retirement?

Writing for Yahoo! Finance, Andrew Button of Motley Fool Canada takes a look at where Canadians are with their registered retirement savings plan (RRSP) balances.

The numbers he found were a little low.

While Canada does not collect savings by age group data, he estimates that “the average single Canadian has about $12,949 saved in his/her RRSP for retirement.”

“Statistics Canada’s 2019 data says that Canadians under 35 have $9,905 in their RRSPs, and Canadians between 35 and 44 have $15,993 in their RRSPs. The average of these two is $12,949. Assuming that single Canadians’ retirement savings increase linearly over time, $12,949 should be pretty close to the amount single Canadians have in their RRSPs,” he explains.

The picture is brighter, he reports, for “economic families,” who have about $140,000 saved in the age 35 to 45 bracket. The term apparently refers to people living together.

OK, $140,000 sounds good – better than $12.9K. But are these folks on track to save what they need?

Button looks at that question.

“Most financial advisors recommend that Canadians retiring soon have $750,000 saved for retirement. If that figure is accurate, then it would appear that single Canadians are a ways away from being able to retire comfortably, while families are faring better. Either way, if you have more than $140,000 saved, you are ahead of the curve. That sum can easily be turned into $750,000 over a few decades (although your required amount will increase due to inflation),” he writes.

He concludes his piece by noting that investing may provide a way to grow your retirement savings.

“If you’re concerned about approaching retirement age with inadequate savings, you can try investing. Dividend stocks, index funds, and GICs are popular assets for RRSPs. A portfolio comprised of such assets may help you retire in comfort,” he concludes, providing examples of a Canadian utility stock and the annual dividends it provides.

If you are saving on your own for retirement, making the right investment decisions can be challenging. There are both risks and rewards to investing.

Fortunately, there’s a way you can get professional investment for your retirement savings at a low cost – have a look at the Saskatchewan Pension Plan. SPP will invest your hard-earned savings in a pooled, low-cost and diversified fund that is invested in Canadian, U.S. and international equities, bonds, mortgages, and more.

You decide how much you want to contribute (and contributions are tax deductible) each year, and you can transfer in any amount from other RRSPs you may have.

At retirement, your choices include a lifetime monthly annuity payment, or SPP’s flexible Variable Benefit option.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Looking for the best tips on saving

A couple of years before he passed away, my wife’s Uncle Joe pulled me aside and gently grilled me about money – specifically, the dangers of debt and the wisdom of saving.

“If you bank 10 per cent of what you earn, and live on the rest, you’ll never have any money problems,” he admonished me. We’re continuing to follow that example.

But what other great savings tips are out there on this fine summer morning? Save with SPP decided to take a look around for more.

Set saving goals with a specific deadline: It’s one thing to say you want to save a big amount of money, say $5,000, write the folks at Parade. “But no matter what your goal, make sure you set it and give yourself a deadline of sorts. “A goal of ‘save $5,000’ isn’t going to get accomplished if you give yourself your whole life to accomplish it,” the magazine advises.

Invoke the power of price-matching policies: Remember the store that boasted “the lowest price is the law” in their ads? Take advantage, recommends The New York Times of stores that offer to match the prices of their competitors, even if they are lower. “Price matching can occur online via chat, in-store, and over the phone, depending on the retailer. Be sure to check online policies and exclusions to confirm that it’s possible—if it is, you just got the item of your choice at your preferred price from your preferred store,” the newspaper advises.

No spend challenge: At the Mom Money Map blog, “no spend challenges” are seen as a great way to “optimize your money mindset.” Pick a time period – a day, or even a week, perhaps – where you simply don’t spend any money. “I don’t need to spend money to eat well. Have fun. Get that occasional self-care I crave,” the blogger tells us, adding “I’m more handy than I think. I can fix that leaky bathtub faucet myself. I don’t need to hire a plumber.”

Haggling over the phone: An oldie but goodie is suggested by the Money To the Masses blog – negotiating prices by haggling. “If you’re confident enough to pick up the phone, you can save a lot of money just by asking for it,” the blog explains – such as negotiating new contracts for services like cable or a phone plan. “Often, the best time to haggle is toward the end of a contract. You’re likely already checking around for cheaper prices, which you can use as leverage when you go to your current provider to ask them to match or beat it,” the blog advises.

We can advise that when you are haggling for a service in person, offering to pay cash can be a great way to negotiate a lower price.

Visit consignment and thrift shops: The gang at Lending Tree say that “instead of buying new, look for hidden treasures at a secondhand clothing store in town or online.” You may be able to turn your own unwanted clothes or other possessions into fast cash, too, the blog notes.

There are limitless other suggestions, like developing, and sticking to, a budget, to avoid grocery shopping without a list, to not use `retail therapy’ to cheer yourself up, and more. Conscious spending comes through in a lot of the articles – some say use cash rather than debit or credit cards because you’ll see the cash wad thin out as you start to burn through it, which doesn’t really happen with cards.

Any sort of Uncle Joe “pay yourself first” strategy should factor in saving for retirement, too. Pay your future self first! Consider setting up some sort of automated savings plan for your retirement savings so that the money goes into your savings pot before you have a chance to spend it.

This is a nice feature available through the Saskatchewan Pension Plan. You can set up pre-authorized contributions from your bank account, perhaps once or twice a month, or coinciding with your payday. The money you direct to SPP is then invested at a low fee in a professionally run pooled fund, at when it’s time to leave the bonds of work behind, SPP offers you the possibility of a lifetime monthly annuity payment or the flexible Variable Benefit option.

Check out SPP today!

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Half of Canadian women have just $5,000 saved for retirement: HOOPP

New research from the Healthcare of Ontario Pension Plan (HOOPP) has found that nearly half of Canadian women have saved less than $5,000 for retirement, and that “most Canadians feel unprepared for retirement.”

A media release from HOOPP outlining the results of the research appeared in a recent edition of the Financial Post.

HOOPP’s 2024 Canadian Retirement Survey found that today’s retirement outlook for Canadians is “particularly bleak,” citing “a rising cost of living and persistent interest rates.”

The survey, which HOOPP carried out with Abacus Data, found that “one in five (22 per cent) have no savings at all” for retirement. “Canadian women report having less in savings and a reduced capacity to save compared to men,” the release notes. And while 49 per cent of women have less than $5,000 in retirement savings, men aren’t doing that much better – 33 per cent of them also have less than $5,000 in retirement savings, the release notes.

“We know women make less money than men and they are more likely to work part-time or take time off work to have children or look after their families,” states HOOPP’s Ivana Zanardo in the release. “Factor in rising expenses and prolonged high interest rates and it’s no surprise that their retirement security is paying the price.”

A lack of ability to save may be what’s driving the “bleak” outlook for retirement, the release continues.

A whopping 57 per cent of Canadians “feel unprepared for retirement,” the release notes – that’s 64 per cent of women and 49 per cent of men.

Women, who already have less in savings, say they “have less money coming in to save,” the release adds; in all 36 per cent of women felt this way. Nearly half of men felt the same way, the release reports.

With less money coming in, saving for retirement isn’t always seen as a top priority, the research finds.

“Affording the day to day” is seen as a top priority by 57 per cent of women and 49 per cent of men, the release states. Fifty-one per cent of men see saving for retirement as a top priority versus 46 per cent of women, but “even so, all Canadians continue to feel concerned about affording daily life (70 per cent) against a challenging economy,” the release continues.

“Over the last few years, we’ve seen Canadians struggle to keep up, first with inflation and now with interest rates and the cost of living,” states David Coletto, CEO, Abacus Data, in the release. “But a small cut in interest rates won’t provide enough relief for Canadians, who told us they expect rates to continue to impact their ability to save even if they decrease slightly in the short-term.”

Other noteworthy findings:

• One in ten (13 per cent) unretired Canadians don’t think they’ll ever retire and one in four (26 per cent) plan to continue to work in retirement in order to support themselves.
• Significantly more women feel anxious (51 per cent of women compared to 39 per cent of men), fearful (50 per cent vs. 37 per cent), frustrated (50 per cent vs. 42 per cent) and sad (46 per cent vs. 36 per cent) about their financial situation.
• Almost half (49 per cent) of unretired adults have saved nothing for retirement in the last year, as all Canadians continue to worry about having enough money in retirement (58 per cent). 
• Even as they navigate a challenging economic environment, the vast majority (70 per cent) of Canadians continue to agree they would trade some of their salary for a pension (or a better pension).

HOOPP has been pointing out the need for Canadians to have better access to retirement programs like pensions for many years. When you look at even the “maximum” benefits payable through the Canada Pension Plan, Old Age Security and even the Guaranteed Income Supplement, they are modest. You need to augment that basic income via savings from workplace retirement programs or your own personal nest egg.

If you are able to take part in a workplace pension plan, be sure you are contributing as much as you can. If you don’t have a workplace program, take a look at the Saskatchewan Pension Plan, an open defined contribution plan available to any Canadian with registered retirement savings plan room.

SPP will invest your retirement savings dollars in a low-cost, professionally managed pooled fund that has had excellent returns over the years. When it’s time to retire, your options include a lifetime monthly annuity payment, or the flexibility of SPP’s Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Take a break from social and don’t keep up with the Joneses: Worry Free Money

Everyone, writes Canadian financial author Shannon Lee Simmons, is worried about money. But her excellent book, Worry Free Money, provides a roadmap to a life where you can enjoy your financial life – and Spend Happy — while living within your means.

She starts by citing a few examples from clients she’s worked with – “there is always something, and we can’t seem to move ahead,” says one. “I’m sick of being broke,” says another. “Why am I falling so far behind,” laments a third.

On paper, she notes, “these people are not actually, numerically `broke.’ But being broke and feeling broke are two different things.”

There’s a way out, she writes:

• Understand the underlying reasons for why you want to overspend.
• Understand what you truly can and cannot afford, without budgeting.
• Spend money on things that make you happy.
• Say no to overspending (and yes to saving).
• Stop comparing yourself to others.

She talks about the risk of the “F*ck-it Moment,” when “you feel as if there’s no point in trying to be financially responsible and you end up overspending.” Examples – “I can never actually afford a vacation, but I need one. F*ck it, life is too short. Swipe.”

In another example, a single mom who can’t afford to buy her son a PlayStation feels forced to do so when his friends come over and mock him for not having one.

Later,she talks about creating Life Checklists as a way of avoiding what she calls “the Inadequacy Influence” (keeping up with the Joneses) which in turn leads to “F*ck It Moment” rash spending. As an example, such a list might include your goals you are proud of – a job with a good pension, and owning property – and your own lifestyle expectation you yourself want to meet – a nice car, a job you like, running a marathon, travelling, getting married, etc.

You then look at the expectations on your checklist to identify goals “you’ve achieved… and where you may feel you are falling behind.” This process helps you to find “the non-negotiable goals, the ones that are truly important to you. Once you know what those goals are, you’ll also recognize the expectations that may not be financially realistic – the boxes that can sabotage your happiness.”

Further on, she talks about having a “Social Media Detox” to prevent yourself from being tempted to overspend on things you may not need. Her rules:

• Two weeks fully off social media. No cheating.
• Unsubscribing from all favourite retailers that currently send notifications to your inbox.
• Deleting credit card information from all apps and online stores.

“Ignorance is bliss when it comes to sales…. Unfollow any lifestyle brands or retailers that trigger you to overspend,” she recommends.

Interestingly, she is not a believer in traditional budgeting.

Budgets usually mean you “track your historical spending, categorize your expenses, forecast your monthly spending, set spending targets based on that historical data and then (you) try to live within those limits.” This approach is “totally unrealistic for modern life… (they) have too many rules and involve far too much work.”

She prefers the Hard Limit – four categories, including Fixed Expenses, Meaningful Savings, Short-Term Savings and Spending Money. There are charts and examples to show how you can move to this simplified, four-bucket approach. She also recommends that you consider putting your spending money in a separate bank account from any saving money, so there is less chance of overspending!

You need to be conscious about how you use your spending money, she adds.

“Your spending money is an investment in how much you enjoy your life. That’s why cutting back can feel so hard and frustrating… if you’re cutting back on the wrong expenses it can feel like you’re divesting from your happiness. It feels like none of the money you earn is for you,” she notes.

This is a great, insightful and well-written book this is thought-provoking and provides easy-to-follow self-help tips. By following the advice, you can be on the road to Happy Spending, she concludes, a place where “no one has to be ashamed about their financial choices.”

If you are saving for your long-term future – retirement – there’s a great resource open to any Canadian with available registered retirement savings plan room. The Saskatchewan Pension Plan has been helping to build secure retirements for Canadians for more than 35 years. Find out how SPP can be your retirement savings partner.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Across the pond, cooling inflation has people saving for retirement again

Over in the United Kingdom, there are signs that inflation is starting to go into retreat – an increased number of folks are starting to save for retirement again.

Writing for Yahoo! Finance UK, Helen Morrissey reports that research from “Hargreaves Lansdown shows only 17 per cent of people said they had stopped or cut back pension contributions over the past six months. This is down from well over a fifth of people (22 per cent) who did the same thing this time last year.”

Translated – less people aren’t saving for retirement. That means more people are, the article explains.

“There are also signs that people are looking to rebuild their pensions (retirement savings) after these tough times, with seven per cent saying they had chosen to boost contributions over the past six months. A further two per cent said they had hiked contributions after previously cutting back,” the article continues.

While it’s good news that there has been a turnaround in retirement saving – generally amongst younger Brits – the article cautions that there is still more work to do on the savings file.

“The most recent Hargreaves Lansdown savings and resilience barometer which shows just 40 per cent of older households are on track for a moderate retirement income compared to 43 per cent of Generation X households,” the article reports.

What do you do if you have not been able to save for retirement during the inflation wave?

“If you have had to take the difficult decision to cut back, or even stop (saving for retirement) in recent years, then it’s important not to panic. Our budgets have taken a pounding as inflation has soared, leaving many needing to make tough financial decisions,” Morrissey writes. “Make a note to revisit your decision every six months, because restarting as soon as possible will help you make up any gaps more quickly,” she advises.

The article offers up some ways you can get your retirement savings going again.

“On an ongoing basis, there are small but important steps you can take to boost your contributions. Increasing them every time you get a new job or pay increase is one way of hiking how much goes in without being too painful,” writes Morrissey.

If your employer offers a retirement program where your contributions are matched by the employer, be sure to participate, as Morrissey notes that “the employer match and can mean a lot more goes into your pension overall without much extra necessarily needing to come from you. If it’s available to you it’s a great way of rebuilding your pension after a difficult time.”

One great thing about the Saskatchewan Pension Plan is that, unlike many employer-sponsored retirement savings programs, you decide how much to contribute – there is no mandatory contribution amount. If you have stopped contributing due to the high cost of living, you can resume contributions as inflation rolls back down. The choice of how often to contribute, and how much, is yours.

Find out how SPP can be your retirement savings partner – the plan has been helping Canadians build retirement security for more than 35 years.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

There’s lots to think about – and to pay for – when considering the cost of dying

When we talk about saving for retirement, we tend to talk about things like covering our expenses after we’ve stopped working – housing costs, food, transportation, travel, maybe healthcare later in life.

But there’s another expense – the cost of dying – that’s out there, and while we won’t be around to pay the bill, it should be factored into our planning, experts say.

Writing in The Toronto Star, Andy Takagi notes that “as Canadians struggle with the cost of living, the cost of dying has quietly catapulted, becoming increasingly unaffordable for low-income Canadians.”

“The average cost of a burial in Canada can range from $5,000 to $10,000, according to Sun Life, and even cheaper alternatives like cremation can still average between $2,000 and $5,000,” he writes. In Toronto, one of the most expensive cities in the country, the cost of a single burial plot with an upright marker at the Mount Pleasant Cemetery runs “between $27,760,50 and $34,825.”

Why are costs going up?

According to Jeff Weafer of the Funeral Services Association of Canada, “staff costs, facility costs, and the costs of goods needed for ceremonies have increased, just like everything else, with inflation,” the Star reports.

He and his association would like to see the federal benefit – which has been set at a flat rate of $2,500 since 2019 – increased. Prior to 1998 the death benefit was higher, around $3,580, the article notes.

The CBC says the rising cost of burials has prompted many to opt for cremation rather than traditional full-body burial.

“Over the past two decades, cremation has become the norm in Canada,” the broadcaster reports.

“According to the Cremation Association of North America, which uses data from provincial vital statistics departments, the cremation rate in Canada has risen from 48 per cent in 2000 to 72 per cent in 2018. And the association expects the rate will keep increasing over the next few years,” the CBC adds.

As an example, at St. Michael’s Cemetery in Edmonton, Alta., an area for cremation plots was opened in the 1980s. While rarely used in those days, today they are in high demand, the CBC notes.

The broadcaster reports that a cremation costs between $2,000 and $5,000, significantly lower than a burial, which was going for $5,000 to $10,000 at the time the article was written in 2020.

At the LowestRates blog, the authors suggest that the cost of dying needs to be talked about in the here and now.

“The topic is taboo to most, but talking about it is important. If we don’t, how will we prepare for a loved one’s passing? Or our own? Because we should prepare when possible. We should know what arrangements have to be made and what those arrangements will cost. Better to deal with funeral expenses and the decisions that come with death sooner rather than later, right,” asks the blog.

As with any purchase, the blog continues, there are lots of costs to consider and lots of options. It’s not unlike buying a car, the blog adds. Things to factor in include getting a death certificate, transfer services, a shroud, casket or urn, body preparation, formal ceremony costs, burial plots or niches, and the cost of burial or cremation services.

And of course, who pays?

“Either you, your insurance company, or those who survive you, like your spouse/partner, children, or parents, will be responsible for covering your funeral expenses in Canada,” the blog explains.

“If you plan with a life insurance policy, the death benefit paid out by your insurance provider can help cover your funeral and after-death costs. Just pay your premium now, and you can spare your family the stress of handling those funeral bills later,” the blog continues.

The other option, the blog adds, is to “plan and pay for your after-death arrangements in advance of your death. So, right now.”

Unfortunately, this writer is at the age when many family members have been passing away. Some pre-paid, others paid via their estates. In all cases, the funeral home was very supportive. We can also add that there is a raft of other things you need to do when a family member passes, including cancelling their Canada Pension Plan/Old Age Security payments, their provincial health card, applying for a death certificate, and more. The folks at the home guided us through that complex maze; an accountant and our lawyer helped us with the intricacies of being an executor for an estate.

So for sure, the experts are right – you need to have this unwelcome conversation at some point while you can.

The Saskatchewan Pension Plan is open to all Canadians who have registered retirement savings plan (RRSP) room. You can make contributions up to your limit, and can also transfer in cash from other RRSPs in any amount. That way your retirement savings can grow in a consolidated, low-cost, professionally run pooled fund. At retirement, you can receive an annuity payment on the first of every month for as long as you live, or look at the more flexible Variable Benefit option.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Canadians “losing sleep” over retirement fears?

Retirement is usually considered to be the reward that follows a long hard slog at the office – the pot of gold at the end of the rainbow of work.

But, writes Pia Araneta for Yahoo! Canada, anxiety about retirement “can have serious impacts on Canadians’ mental and physical health.”

She provides the example of Sandi Allen of Shoal Lake, Man., who “wants to retire… after almost 27 years of working long shifts with increasing demands.” The 57-year-old wants to spend more time with the grandkids and travel with her partner, writes Araneta, but “thanks to the increased cost of living, she feels more anxiety about the thought of retirement than excitement.”

“With hydro rates going up, the cost of fuel, taxes and groceries…I don’t know if we can afford to retire,” Allen states in the article. “I’ve been losing sleep over it.”

The article cites a 2021 study by the Healthcare of Ontario Pension Plan that found that “respondents were more concerned about the affordability of retirement than their own health.”

Even though she has a government pension, Allen says she worries if her pension plus Old Age Security “will be enough,” the article notes. “I wonder if my husband and I will actually be able to retire and live comfortably without worrying. Are we going to be able to enjoy our time,” she asks in the article.

Toronto’s Jannett Ionnides tells Yahoo! Canada that, at 64, she feels unable to retire, a fact she finds “depressing.”

“If I do retire, we would lose our house and have no place to live,” she tells Yahoo Canada. As well, the article notes, “Ioannides has had different professions throughout her life, trying to keep up with payments and `make ends meet.’ Her husband, who is 67, is retired but has since picked up two part-time jobs to help make payments.”

Worrying about money can have some serious health consequences, the article notes.

“According to the Financial Consumer Agency of Canada, if someone is dealing with financial stress, they are four times as likely to suffer from sleep problems, headaches and other illnesses such as high blood pressure and heart disease. Additionally, they are more likely to experience strain in their personal relationships,” the article notes.

Worse, the article adds, those of retirement age who have financial problems tend to keep that fact to themselves, worried they will cause problems for their children and family. “Financial stress at an older age can be isolating because some might not choose to share their situation with others, so they’re not seen as a burden,” the article explains.

The article, citing research from the National Institute on Ageing (NIA), says “retirement affordability” is becoming a real challenge.

“According to a 2023 ‘Aging in Canada Survey’ conducted by the NIA, only about one-third of working Canadians aged 50 and above who intend to retire said they can afford to do so at the desired time. Almost 40 per cent of respondents said they are not in the financial position to do so and 26 per cent said they are unsure of whether they can afford to retire at the time they want.”

The article concludes that the lack of retirement readiness is a growing issue that may “get even worse in years to come.”

The story underlines the importance of retirement savings – when you can no longer work, you will need to fall back on something, and the benefits provided by the Canada Pension Plan, OAS and so on are pretty modest. If you have a retirement savings plan through work, be sure to sign up and contribute to the max. If not, have a look at the Saskatchewan Pension Plan.

Open to all Canadians, SPP is a voluntary defined contribution plan. You decide how much you want to contribute each year – you can chip in any or all of your available registered retirement savings plan room. You can also transfer money in from other non-locked-in RRSPs.

SPP will take the money you provide and invest it in a professionally managed, low-fee pooled investment fund, growing it for your golden years. When it’s time to give up the parking spot at work, SPP provides you with several options for drawing retirement income, include the possibility of a lifetime monthly annuity payment or the flexible Variable Benefit option.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Are we becoming too comfortable with debt? A Money Coach weighs in!

When the Bank of Canada recently ratcheted down its decades-high prime rate, we wondered if millions of debt-holding Canadians would start to breathe easier.

Or, are they comfortable with having a lot of debt and not following the ups and downs of interest rates?

We reached out to Janet Gray, CFP, advice-only planner with Money Coaches Canada to find out more on the topic of debt, and its distant cousins budgeting and saving.

“Everyone’s perception of debt is different,” says Gray. We all have a “different threshold of comfort/discomfort” with the idea of being in debt. That level of comfort – unheard of in our parents’ and grandparents’ day – can impact whether or not we can step up and manage our debt, says Gray.

While some folks may still live off their credit cards, it’s harder to do in an era where credit cards carry interest rates of 21 to 30 per cent.

That sort of high interest debt should be targeted first if you ever set out on a plan to reduce or eliminate indebtedness, she adds.

It’s more common these days for people to leverage the equity in their homes for extra cash. “We are living in our largest savings account,” she explains, mentioning the easy access we have to home equity lines of credit or reverse mortgages. Even today’s higher interest rates on lines of credit – in the 7.25 per cent range – are small compared to the rates charged by credit cards.

“In an emergency, many people have to access their lines of credit if they don’t have enough savings,” she explains.

Gray agrees that the recent period of ultra-low interest rates has “normalized” debt. She says it was not that long ago that we saw 1.99 per cent mortgages and zero per cent car loans. “It has been so easy to get credit – everything has been so easy – but management of credit is not so intuitive,” she explains.

Debt is like “a machine that feeds itself,” she explains, with such drivers as the feeling of denial when you can’t afford something, the lack of tools to cope with debt, and the fact that “people don’t comprehend where credit use is taking them – the stress, wear and tear, the impact on relationships.”

So how do we turn things around, and manage debt while building savings?

Part of the solution is acceptance – recognizing that there’s a problem – and then having the perseverance “to get there” and solve it, she says.

Know your numbers, and quantify the true cost of credit – what you are paying in interest, and how that impacts the real cost of credit card purchases. “Make that your mission – don’t spend unless you have a plan to pay (debt) back,” she explains.

Budgeting – every dollar has a job

Gray explains that we need to realize that every dollar we have needs to have a job. It needs a specific goal, a plan for that dollar. Some can go to debt, but others can be put away for long-term savings, or to help pay for a vacation trip.

Problems can happen with your money if “you don’t have the jobs well identified,” she explains. “You need to know what you need your money to do. You have to define jobs for every dollar, and then (after you pay for your required expenses) align your investment and savings with those goals.”

If you are thinking about short-term money goals, your money should be in something that is less risky and more oriented towards short-term savings – perhaps via a Tax Free Savings Account invested in fixed-income investments which is usually safe, secure and readily accessible.

Your longer-term money, for such things as retirement, should be focused on growth investments, like equity, and can live in a registered retirement savings plan (RRSP) or, increasingly these days, a TFSA so there is no tax when you withdraw the money in retirement, she says.

“Find the job, then find the vehicle,” she explains.

Looking ahead

While we are seeing more consumer proposals and bankruptcies caused by improper use of credit, there are some good signs out there.

Gray says she was pleased to learn that Grade 10 students in Ontario will soon be getting financial literacy training, beginning at age 15. “That’s the perfect age for it, since they are still in school until age 16 but some are working part time and earning money. They are still (maybe) moldable at 15.

The hope, she adds, is that younger people will begin to learn that you need to align the money you make with your needs, to “have the dollars working for you, and not you working for the dollars.”

We thank Janet Gray for taking the time to chat with us again!

Thinking about saving for retirement? But don’t know how to get started? The Saskatchewan Pension Plan may be just the program for you. It’s open to any Canadian with RRSP room, and you can start small and ratchet things up as you progress through your working career. SPP will professionally invest and grow your savings via a low-cost, pooled investment fund. At retirement, you can choose from several options – money for life via an SPP annuity, or the flexibility of the Variable Benefit. Check out SPP today.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Women retirees receiving 17 per cent less than men: report

We’ve all known for a while that women tend to outlive men. But a new study from Ontario’s Pay Equity Office reveals that women, on average, receive 17 per cent less income in retirement than men do.

The study was highlighted in a recent story in the Financial Post, which took a deeper dive on the issue of what it calls “the pension gap.”

Having a gap is bad, but the Post informs us that the gap between the retirement income of Canadian men and women has actually worsened over time.

“The gender pension gap was 15 per cent in 1976, but despite women’s increased labour force participation, it widened to 17 per cent in 2021, according to Statistics Canada. The average retirement income for Canadian women in that year was $36,700 and the median was $29,700,” the Post reports.

“Women receive $0.83 to every $1 a man receives in retirement income. That is a 17 per cent gendered pension gap,” Kadie Philp, commissioner and chief administrative officer of the Ontario Pay Equity Commission, states in the Post article. “This stark reality isn’t just a number — it’s a concerning trend contributing to a notable gender disparity among older Canadians, particularly women.”

And even worse, many women are not only making less than men, but are living at or below the poverty line, the newspaper notes.

“According to the report, approximately 200,000 more women than men over the age of 65 were living below Canada’s low-income threshold in 2020. Twenty-one per cent of women who had incomes below the cut-off were above the age of 75 — 51 per cent higher than the portion of their male counterparts of the same age,” the Post article tells us.

So, we may all wonder, what’s going on here – what’s causing this “pension gap?”

The fact that women take time away from employment to bear and raise children is cited as one factor for having lower retirement income, the Post states. Additionally, and perhaps for the same reason, part-time work is higher amongst women than men – 24.4 per cent of women worked part-time in 2021 compared to 13 per cent of men, the article says.

Women also get less income when off on parental leaves than men do, the Post notes.  “A majority of insured mothers in Canada (89.9 per cent) took maternity or parental leave at a reduced income level compared with 11.9 per cent of insured fathers or partners,” the Post reports.

As well, there’s the big factor of pay equity generally. Women typically make 28 per cent less throughout the year (and 11 per cent less per hour) than men. We are left to conclude that if you earn less you are no doubt also saving less for retirement.

Finally, the Post discusses “historical biases,” citing the design of Canada’s public pension system that is “designed for heterosexual couples with a male counterpart.”

The takeaway from all of this seems clear. If you are a woman, you need to focus, and never overlook, the importance of retirement saving. If there’s a pension plan where you work, make sure you are signed up and contributing to the maximum – many plans allow part-time workers to join their retirement program.

If you don’t have a program in place for work, the Saskatchewan Pension Plan may be a key resource for creating your own future retirement income. SPP, after all, was first designed to provide pension benefits to people – such as farm wives – who didn’t have access to a retirement program via employment.

SPP will take the dollars you contribute and grow them via a professionally managed, low-cost, pooled fund. When it’s time to collect, you can choose from options like a lifetime monthly annuity payment, or the more flexible Variable Benefit.

Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!