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

Blogger sees CPP expansion as helping hand for retirement saving

While many politicians and financial think-tanks like to refer to Canada Pension Plan (CPP) contributions as a tax – one they say is being increased through expansion of the program – at least one blogger sees it as a positive step towards retirement saving.

The Michael James on Money blog recently took a look at the issue of CPP expansion.

In his post, James notes that many observers say CPP expansion is “unnecessary,” and cite average saving figures as proof that a bigger CPP is not needed.

“But averages are irrelevant in this discussion,” writes James. “Consider two sisters heading into retirement. One sister has twice as much money as she needs and the other has nothing. On average, they’re fine, but individually, one sister has a big problem. CPP expansion is aimed at those who can’t or won’t save on their own.”

And while there are many programs – CPP, Old Age Security, and the Guaranteed Income Supplement – designed to ensure “we don’t… see seniors begging for food in our streets,” the CPP is something that working Canadians and their employers pay into, rather than a taxpayer-funded program, he explains.

He makes the point that CPP should not be an optional savings program, like an RRSP. “If CPP were optional, too many of those who need it most would opt out. The only way CPP can serve its purpose well is if it’s mandatory for everyone,” he writes.

These are excellent arguments. The days when everyone had a pension plan at work, and the CPP was a sort of supplement to it, are long gone. According to Statistics Canada, the number of men with registered pension plan coverage dropped from 52 per cent to 37 per cent between 1997 and 2011. For women, coverage increased to from 36 per cent to 40 per cent during the same period. That means more than 60 per cent of us don’t have a pension at work.

CPP expansion helps fill that coverage void. If workplace pension plans were on the increase, certainly CPP expansion wouldn’t be necessary – the statistics show that’s simply not the case.

If you don’t have a pension plan at work, you can self-fund your retirement through membership in the Saskatchewan Pension Plan. Any Canadian can join and contribute up to $6,200 annually to an SPP account. When you retire, SPP takes the headaches out of the process for you and converts your savings into a lifetime income stream. You can start small and build your contributions as your career moves forward.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

Are we looking at a hunger crisis for Canadian seniors? Recent research from the Ontario Association of Food Banks (OAFB), called The 2018 Hunger Report suggests that with more than half a million Ontarians accessing food banks each year, including a growing number of seniors, the crisis is already here.

Save with SPP contacted Amanda Colella-King, OAFB’s Director of Communications & Research, to find out more about the report.

Q. Were you surprised by the findings?

“In reviewing the data, we were surprised that there was such a significant increase (10 per cent) in seniors accessing food banks over the previous year. This is a rate nearly three times faster than the growth of Ontario’s senior population.”

Q. What did you see as the most significant finding in this research?

“I think the most significant finding is just how hard it is for so many seniors and adults to afford their basic necessities each month.  The workforce has changed significantly over the last decade, from secure well-paying jobs to more precarious contract or part-time positions that often do not provide benefits or retirement savings assistance, like a pension plan. This often results in adults having to spend their savings during downtime or rough patches, rather than put money away for retirement. 

Alongside this, government support programs for seniors have remained relatively stagnant over the last 15 years, while the cost of living has continued to rise. This has made it increasingly more difficult for seniors to afford even their most basic necessities each month. 

As the job market continues to change and the cost of living continues to rise, we believe that more seniors will have no other choice but to turn to food banks for support.”

Q. Does a lack of retirement savings/ pensions from work/ low retirement income fuel this crisis, is it a driver? Are there other drivers?

“Hunger is a symptom of a much larger problem: poverty. Low income, whether due to precarious employment or insufficient social assistance or retirement support, alongside the rising cost of living means that adults and seniors are having trouble affording their most basic necessities each month, like rent, transportation, medicine, and food. 

One of the largest expenses faced by adults and seniors is the cost of housing. In the last year, nearly 90 per cent of food bank visitors were rental or social housing tenants who spent more than 70 per cent of their monthly income on housing.”

Q. What are your next steps with this research – will you share it with government?

“Yes, the Ontario Association of Food Banks regularly meets with government officials to discuss its research and recommendations for change. The 2018 Hunger Report was also sent directly to all MPPs in the province and discussed during Question Period, Dec. 4, 2018 at the Ontario legislature, Queen’s Park. 

The OAFB will continue its research and expects to release a number of new reports over the upcoming year on food bank use and poverty trends in the province. It collects real-time data on food bank use across the province throughout the year. This information is used to inform our research and the evidence-based recommendations for change that we advocate for to the provincial and federal governments.”

Q. Can you tell us a bit about the OAFB?

“The OAFB is a network of 130 direct member food banks and over 1,100 affiliate hunger-relief agencies, including breakfast clubs, school meal programs, community food centres, community kitchens, and emergency shelters. Together, we serve over 501,000 adults, children, and seniors every year. For every $1 donated, we can provide the equivalent of three meals to someone in need.”

We thank Amanda Colella-King for taking the time to answer our questions.

Having retirement income over and above what the government provides is an important factor for retirees. If, like so many Canadians, you lack a retirement plan at work and aren’t sure how to invest in an RRSP, the Saskatchewan Pension Plan may suit your needs. You determine how much to contribute, up to a maximum level of $6,200 annually, and the SPP does the rest. The government-sponsored, not-for-profit SPP invests the money efficiently and effectively and also provides, at retirement, ways to convert your savings into a lifetime income stream.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

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

Think hard before you start spending a lottery win or inheritance: BMO

If you ask Canadians about their financial goals, you’ll get a sensible answer – most want to “achieve lifestyle goals in retirement.”

But a recent survey by BMO Wealth Management, released via Yahoo! Finance, suggests common-sense goals may got out the window if people get a “sudden windfall.”

Pre-windfall, which BMO defines as “winning the lottery,” or getting an inheritance, legal settlement or insurance payout, Canadians seem to have reasonable goals. The “lifestyle in retirement” goal was shared by 55 per cent of those surveyed. A further 49 per cent had the goal of increasing their wealth, followed by “protecting current wealth (40 per cent), managing taxes in retirement (27 per cent),” and “helping grandchildren (20 per cent),” the study notes.

Post-windfall, it’s a totally different story. Sixty-four per cent of those surveyed would “share, with family, friends and charity.” An equal percentage would “pay off all debts.” Forty-seven per cent say they would “invest in the stock market, a business, or a property.” Other choices were “buy the big ticket items I always wanted (17 per cent),” and “splurge and spend freely (10 per cent).”

Only 38 per cent of those surveyed said they would carry on with the same pre-windfall goals.

You’re probably thinking hey, who wouldn’t go a little bit nuts if they won millions, and it is hard to disagree with that thought. However, BMO says that this sudden change of thinking – tossing sensible plans out the window – is worrisome given the fact that “approximately $1 trillion in personal wealth will be transferred from one generation to the next by 2026.”

“While the significant investment opportunities can be exciting, be cautious of psychological issues associated with sudden wealth syndrome,” states Chris Buttigieg , Director, Wealth Institute, BMO Wealth Management in the release. “It is important to seek expert advice to discuss how a windfall will alter your financial goals and which causes matter most to you and your loved ones.”

The advice from BMO is to take your time if you’re in the lucky position of receiving an unexpected financial windfall. “Remain calm… think about how a windfall will affect your financial goals,” BMO advises. They also recommend developing a wealth plan so that the goals you establish can be met. As well, they say it’s wise to get rid of high-interest debt as quickly as possible.

A good retirement plan can be improved dramatically through the addition of newfound wealth. If you have unused RRSP room like millions of other Canadians, a good strategy would be to fill that room. The Saskatchewan Pension Plan provides a great place to save some of that unexpected cash for the many happy days of retirement that lie ahead.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

What’s your “saving resolution” for 2019?

Let’s face it, January is always an optimistic month. We’re going to lose weight, we’re going to take that trip, we’re going to de-clutter the house, and so on.

But what are people’s “saving resolutions” for this brave new year? Save with SPP set out to find out.

Over at the Meridian Good Sense blog, writer Cindy Waxer sees several great financial ways to start off the New Year.  First, she writes, “tackle credit card debt.” Use some of your Christmas money gifts, or a bonus from work, to pay down higher-interest debt, she advises. Other ideas include saving for retirement, “getting aggressive” with your mortgage, fine-tuning your budget and to “assess your financial situation – honestly.” If you are getting too far into the debt side of the ledger, it’s time to make changes, she notes.

At the Money Aware blog in the UK, ideas include writing down savings goals, sticking to a budget, and “saving in a way that works” for you. If making automated savings withdrawals doesn’t work for you, try anything that works, including “shoving coins in a special money tin” that must be pried open with a can opener.

Save with SPP personally endorses the money tin concept. All our change goes into a little metal piggy bank, and when the bank gets heavy, we dump the coins in one of those money counting machines at the grocery store, deposit the bills in the bank, and then make an SPP contribution. It adds up!

Ideas from US News and World Report include having “no spend” days, spending time to “get healthy… without joining a club,” and using a “fast track” approach to manage debt. “Instead of saying, `I’m going to repay all my debt this year,’ which is a lofty goal, commit to fast-tracking the payoff process. That may mean contributing an extra $50 per month to your debt bill,” the newspaper advises. If possible, use automated bill payments to make the whole process simpler, and build “more” into your debt repayment plans, the article suggests.

When you look at these various articles, a theme emerges. You need to be aware of where your money is going in order to be able to save any of it. Gain control of your spending and you’ll find savings a breeze. And, as we say, socking away even small amounts of money into your Saskatchewan Pension Plan account is something your future you will thank you for – every month!

Here’s wishing everyone a very happy, prosperous, and savings-friendly 2019!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

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

Retirement system OK, but more needs to be done: study

It’s a classic “good news, bad news” situation, this Canadian retirement system of ours. The good news, according to OECD research published recently in Wealth Professional, is that the developed world’s pension systems are much more stable.

The bad news is that they’re not necessarily delivering an adequate retirement benefit, the magazine notes.

“Governments are facing growing challenges from an aging population, low returns on retirement savings, low growth, less stable employment careers and insufficient pension coverage among some groups of workers,” the article notes. “These challenges are eroding belief that pensions will provide enough income for comfortable living in retirement,” the article adds.

While Canada’s system is ranked sixth best among those studied, the article points out that Canadians contribute about 10 per cent of their earnings towards government retirement programs. By comparison, Italians contribute about 30 per cent of earnings, the article notes.

There’s no question that the CPP is on much more stable footing than in years past. The giant CPPIB fund, as of mid-2018, had $366 billion in assets and had an investment rate of return of 11.6 per cent, according to a media release.

But the CPP payout, while being improved, is currently quite modest. The maximum monthly amount as of July 2018 was $1,134.17, and the average amount paid out to new CPP retirees was $673.10. The great thing about CPP is that it continues for the rest of your life and is inflation protected.

Most of us will also get Old Age Security payments, which are currently around $600 a month. This is also a lifetime benefit.

What the studies are telling us, however, is that if we don’t have a workplace pension, we need to be saving on our own for retirement. CPP and OAS were designed to supplement your workplace pension and personal savings. Many of us don’t have pensions at work, and a surprising number of us don’t have any retirement savings either.

If you are in that situation, there is still time to take action. If you don’t have a pension at work, you can create your own by joining the Saskatchewan Pension Plan. You can determine how much to contribute up to a maximum level of $6,200 a year.

If you have dribs and drabs of RRSP savings in other places, those can be consolidated in the SPP (up to $10,000 a year).

Not only will SPP invest that money for you, but at the time you want to retire, they’ll convert it into a lifetime monthly pension. By creating your own retirement income base, those helpful government benefits waiting for you in your future will be icing on the cake, rather than the cake itself.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

 

Retirement is unique in that it is something we can’t really imagine until it happens, yet we still are urged to prepare for it, even while we are young.

To help us all visualize what retirement is like, Save with SPP took a look around to see how people are enjoying their retirement, and why.

Over at the Love Being Retired blog, the operative concept is freedom. The blog’s author talks about “knocking out my to-do list,” compiled over many years, as well as setting one’s own pace and trying new things. “A little excitement and a little variety are in the cards for me,” the blogger notes. Other things retirement will allow are spending more time with friends and family and having time to write.

At the Boomers Next Step blog, retirement is seen as an opportunity. “The traditional concept of retirement seems to have faded and is slowly being replaced by a smorgasbord of dynamic opportunities, all offering different variations of purpose, fulfillment and freedom,” the blog states.

The smorgasbord of retirement, the blog continues, can include searching for a new, post-career job, “creating a laptop lifestyle,” (work that you can do anywhere), and then “travel adventures… (and) pursuing your passions.” A key for the blog is having the income to fund “our travel, our sailing, and our other lifestyle choices.”

A study, called Leisure in Retirement: Beyond the Bucket List, featured in the Huffington Post, found retirement to be “the most liberating and enjoyable time” of life. And, the study notes, it doesn’t always have to be about money.

Time, the study found, is in abundance for the retiree. “Collectively, retirees will enjoy 126 billion — yes, BILLION — hours of leisure time this year alone. And as tens of millions of boomers move from being `time constrained’ to `time affluent’ over the next 20 years, they will collectively amass 2.5 trillion hours of leisure time,” the study notes.

“Suddenly what you want to do trumps what you have to do. It’s exhilarating to have this kind of freedom,” one focus group researcher told the study’s authors.

The last word belongs to Maclean’s, who write that retirees need to factor in new and fun things to do even as they unwind their retirement savings. “Manage spending carefully on the basics like shelter, transportation and groceries to ensure you have ample money left to spend on the non-essential activities like travel, hobbies, entertainment and helping others. It’s these extras that make for an active and rewarding retirement,” the magazine recommends.

Time and freedom will be abundant commodities when you detach yourself from your career. Savings from work will come in handy as you try new things. Think about joining the Saskatchewan Pension Plan so that those savings can be put to good use as retirement income, down the road.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

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

Feds want input on how to make retirement more secure

Retirement security is a hard thing to define, particularly if you are not yet retired.

Some imagine it as an upgrade from working – you’ll have more time to do all the things you want, no more slogging away at the office. Others worry if they will have enough savings to fund the kind of life they have now – or even a more austere one.

Workplace pensions are far rarer than they were in decades past, leaving most of us to have to create our own retirement security.

The federal government, reports Wealth Professional, is opening public consultations on the growing problem of retirement security. It wants to take a harder look at pension regulations, as well as (and perhaps, the article says, in light of the Sears pension debacle), “insolvency and bankruptcy laws.”

The consultations want to “improve retirement security for Canadians” by looking at ways to ensure workplace plans are “well funded,” and corporate decisions are better aligned with “pensioner and employee interests.” The government, the article notes, talks about the improvements that have been made to government pensions, such as the OAS and GIS.

We learned recently that Canadians ought to have saved 11 times their salary by the time they are ready to retire. But in an era when workplace pensions are scarce, how can such saving be encouraged? And how do we ensure folks don’t dip into the savings before it’s time to live off them?

If RRSP savings were locked in people wouldn’t be able to withdraw money until they reach retirement age, and at that point, if funds were be converted to an income stream people would be assure of income for life.

A second idea might be to add a voluntary savings component to the CPP; this has been floated before.

Another idea might be to create investment funds for the OAS and the GIS. Right now these benefits are paid 100 per cent via taxpayer dollars. If, as is the case with the CPP, some of the dollars could be diverted to investment funds, maybe that taxpayer portion of future benefit costs could be reduced.

The real challenge is getting people to save more. One can argue truthfully that there are plenty of great savings vehicles out there that just aren’t being fully used. Could the feds offer some new tax incentives to put money away?

It will be interesting to see what the government finds out on this important topic.

If you don’t have a pension plan at work – and even if you do – it’s always wise to put away money for retirement, which will come sooner than you think. The Saskatchewan Pension Plan offers a simple, well-run savings vehicle that is flexible and effective. You decide how much to put away, you can ramp it up or down over your career, and you get multiple options on how to receive a pension when the golden handshake comes. Be sure to check it out.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

We were chatting about retirement with a salesman at the local car dealership when he rolled out a bombshell – in his early 70s, he had no plans for retirement. He loved what he does and wants to keep on doing it for as long as he can. Maybe in his mid- to late 80s he might get a cottage, he says.

That made Save with SPP wonder if others aren’t retiring – and why.

The Wise Bread blog says there are five types of people who don’t retire – the “broke non-retiree, the workaholic, the successful investor, the life re-inventor and the mega-successful lifers.”

The article notes that “a startling 47 per cent” of Americans “now plan to retire “at a later age than they expected when they were 40.” The reason why – 24 per cent of Americans 50 and older have saved less than $10,000 for retirement.

For workaholics, the article notes, “it can be devastating to face retirement,” with many fighting it “tooth and nail.” Successful investors, the article notes, may have bought real estate, gold, or stocks early and now have enough money that they don’t need to work. Life re-inventors retire from one job and take on a new, totally different one, and the “mega-successful” tend to be CEOs, actors, star athletes, folks who have sufficient wealth to not worry about a formal retirement.

The New York Times reports that there are 1.5 million Americans over the age of 75 who are still working. Judge Jack Weinstein, age 96, still gets up for work every day at 5:30 a.m., the newspaper reports. “I’ve never thought of retiring,” he tells the newspaper. “If you are doing interesting work, you want to continue.” The paper says that those who are employed in jobs “in which skill and brainpower matter more than brawn and endurance” often keep going past usual retirement age, as do the self-employed and industry stars, like Warren Buffett.

An article in Market Watch picks up on another point – there are many people who don’t like the sound of retirement. “The idea of a retirement where a person has little responsibility, and, worst of all, interacts with very few people, just isn’t appealing to the current crop of pre-retirees,” the article notes.

A more Canuck-friendly view comes from Canadian Living, which lists the main reasons for not retiring as “you need the money, you like working, you hate retirement,” and significantly, “you’ll collect bigger benefits” and “you’ll lose your RRSP later.”

“If you collect your CPP at age 70,” the article points out, “you’ll get 42 per cent more than if you retired at 65.” Similarly, if you collect CPP at 60, you get 36 per cent less than if you collected at 65, the article states.

On the RRSP front, since you must convert your RRSP to a RRIF (or buy an annuity) by age 71, delaying retirement means you will have more money in retirement, the magazine notes.

These are all good points. Save with SPP notes that there are many folks who simply live in the now and won’t think about retirement until they must. The idea that we can all keep working forever is a nice one but tends to be an exception, rather than a rule.

We may not want to retire, but the vast majority of us probably will. Even if you’re in the group that has saved very little up until age 50, there is still time to augment your life after work with some retirement savings. The Saskatchewan Pension Plan is quite unique in that it is open to all Canadians and provides an end-to-end retirement vehicle – your savings are invested and turned into a lifetime pension at retirement time. It’s a wise choice, even for those who don’t want to retire.

 

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

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

Canadians need to save 11 times their salary by retirement

There are many “rules of thumb” in the world of money. One used to be that your rent should equal one quarter of your monthly take home pay. Another used to be that your house should be worth twice your annual salary.

According to research by Fidelity in the US, reported by Market Watch, people should have saved a year’s salary for retirement by age 30.

By age 40, Canadians should have saved three times their salary for retirement. And by “average retirement age,” usually early 60s, Canucks need to have saved 11 times their salary, the article says.

The article tempers the alarm it raises with these high figures by pointing out that they are just guidelines. “Everyone faces different circumstances, and therefore need varying amounts of money by the time they retire,” the article reports. “Some people may choose to rent or pay off a mortgage, while others may not have any housing obligations except for taxes and utilities. Some retirees may want to take more vacations, or have more medical bills to pay, or have intentions with their money, such as an inheritance for their children and grandchildren.”

And don’t forget that the contributions you make towards CPP and a portion of your income tax are retirement savings payments, since you will get a CPP pension one day and likely Old Age Security as well.

That said, Statistics Canada, via the CBC, reports that the average Canadian saves only four per cent of his or her income, and that there was a whopping $683.6 billion in unused RRSP room as of the end of 2011. The article notes that someone saving $2,000 a year from age 25 on would have $301,478 by age 65. That might not be 11 times his or her salary, but it is a pretty good number.

Retirement savings, like losing weight or getting out of debt, is overwhelming when you first set out to do it. But if you start small, and chip away over the years at your target, you will be surprised to see how far you’ve come when the time comes to log out of work for the last time.

If you’re not fortunate enough to have a pension plan at work – and if you do, and have extra contribution room each year – the Saskatchewan Pension Plan is a great way to build your retirement savings. You can start small, or can contribute up to $6,200 per year. You can transfer savings in from other retirement savings vehicles. The money is invested professionally at a very low fee, and when you retire, you’ll have many options for turning savings into a lifetime income stream. Check it out today.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

 

As 2018 rolls along to its grand finale, it’s a good time to reflect on the year that was.

Today, however, we want to look at something a little different – let’s have a look at what not to do when it comes to saving, the worst ways to save of 2018.

At the Money & Career Cheatsheet blog, there are several “worst practices” for saving outlined.

First, the blog notes, don’t always buy everything in bulk. “You’ll just end up spending more money in the long run,” the blog advises. “Let’s be realistic. Are you really going to use these bulk items in a reasonable amount of time? And where are you going to store all of this stuff?” Better, the blog advises to “cherry pick” and buy items when they are on sale at a regular grocery store.

Other tips from the folks at Cheatsheet: avoid store credit cards, which are easier to get but often have the highest interest rates, and don’t skip on retirement savings. “Don’t make excuses for why you can’t save for retirement. You’ll be sorry you didn’t start earlier. Start contributing to your retirement fund as early as possible,” the blog advises.

At the Smartasset blog, the biggest savings mistake identified is not paying off “bad” debt. “Debts such as credit card and personal loans stick with you and tend to have higher interest rates than secured debt,” the blog post explains. “Thus, the longer it takes you to pay these debts off, the more you end up paying in the long run.”

The Sweating the Big Stuff blog says eating at fast food restaurants may feel cheaper than dining at a restaurant, but the less-healthy food will cost you your health. As well, the blog says BOGO-type deals are rarely a great thing. “When you `get one free when you buy four,’” it means you’re buying four when you only wanted one; it means you’re wasting money, not saving it! Think really hard before you get that `great’ deal that’s making you think you’re such a genius,” the blog advises.

The Slice blog echoes some of these points, but adds a few more – paying only the minimum on your credit cards, and cheaping out on insurance – going for the lowest rate rather than focusing on what you want covered.

Save With SPP can think of a few more. It’s always better to save up for a vacation than to get it on credit. You’ll leave the beach and will head home to an inbox full of bills. Using credit card points must be done right. The points are great, but greater if you aren’t running a balance on your cards. Pay the card off each month or as quick as you can. Another one that jumps to mind is paying debt with debt; it seems to fix your short-term problem but creates a much bigger long-term problem.

As we get ready to enjoy the end of 2018, let’s all think about ditching any bad savings habits we have in 2019. We can, instead, make a resolution to do what Cheatsheet advises, and direct some real savings to retirement. The Saskatchewan Pension Plan offers a very flexible way to do just that.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22