There’s a room in our basement that we rarely ever enter, which we euphemistically call the “storage room,” that has 50 or more boxes full of accumulated clutter from past dwellings in Toronto, Waterloo, Barrie and beyond. There are also old books, toys, games, records, cameras, Palm Pilots, and other once-cool stuff that now is unneeded and unwanted.

Save with SPP, finding the prospect of going through each box overwhelming, took a look around the Interweb for ideas on how to convert some of this clutter into easier-to-store cash, while reclaiming some floor space.

Over at the Go Banking Rates blog, a number of clutter-cashing ideas are on offer.

The blog recommends a “triage” of your clutter collection to sift out any items of value.

“Go through each room and sort items into categories like clothing, electronics, books, and collectibles. Be ruthless in your selection; if you haven’t used it in a year and it doesn’t hold sentimental value, it’s likely clutter,” the blog advises.

Next, look up online to find the value of your potential “sellables,” the blog adds. See what similar items are going for on Facebook Marketplace, eBay, or (in Canada) Kijiji.

List your items on a suitable platform – the blog recommends eBay for collectibles, and Facebook for furniture and electronics “as you can avoid shipping costs.”

Anything you plan to sell online should be cleaned, repaired, and captured via a good, clear photo and well-written, clear description, the blog notes. Be sure, the blog concludes, that you are offering your items at a fair price, account for any fees your platform charges (example – shipping outside Canada) and be willing to negotiate. With Facebook sales, arrange to meet the buyer “in well-lit public places and consider bringing a friend,” the blog advises.

“With a little effort and savvy, you can turn your unused items into a valuable resource. Whether it’s an old guitar, a stack of vintage comics, or a designer dress you never wore, there’s likely a market for your once-loved items,” the article concludes.

The Frugal Farm Wife blog provides a few more ideas.

While it takes a bit of effort to cash in on your junk, it’s a sound idea to trade “a pile of stuff you no longer want or need for cash to spend on things you DO want or need,” the authors note.

Yard or garage sales, the article says, are the number one way “to get rid of stuff… they’re great!”

Set low prices for the bargain-minded yard/garage shopping set, advertise (via flyers or community Facebook, including some photos of what’s going on sale), and make your sale “easy to navigate” by grouping like items together, having tables to lay out clothes and larger items, etc.

Another approach, the article continues, is to “sell to consignment shops.” This is good for name-brand clothing that is in excellent shape, the article advises, and your clothes must be spotless.

Consider bringing any unwanted antiques to an antique store, the article notes.

At the Thrifty Frugal Mom blog, a lot of the same ground is covered, but the blog notes there are also online yard sales that can be set up via Facebook.

“To find one, simply search Facebook with your area’s name and either yard sale or resale and likely something will pop up. If not, create one yourself- but be prepared for it to become a hopping, popular place,” the blog notes.

“While you can sell big-ticket items here, I’ve found these groups to be a great place for selling smaller items and kid’s clothing. In fact, two groups that I’m part of are specifically for kid’s stuff.”

We can add a couple more thoughts from family experiences. The market for used 35 mm film cameras seems to have ticked up of late, and many camera stores will purchase your old cameras and lenses for a few bucks. There are several local stores that will pay cash for old vinyl records. And if you have any old collectible cards, there are card shops that will help you convert them into cash.

Depending on how serious your clutter addiction is, this is a process that could take time. But at the end of the day, you’ll have less clutter and more cash.

A nice place for some of that extra cash to be stored is the Saskatchewan Pension Plan. Any Canadian with registered retirement savings plan room can join SPP, and take advantage of its low-cost, professionally managed and pooled investment fund. And when you retire, your options include converting savings to a lifetime monthly annuity payment, or the flexibility of SPP’s Variable Benefit option, where you decide how much income to withdraw – and when!

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Avoid key mistakes that can cramp your style in retirement

When we’re slaving away in our cubicles (or, more often these days, from our dining room tables), retirement can seem a far-off, almost imaginary time when work won’t be necessary.

But CTV’s Christopher Liew warns that to enjoy a long and financially stressless retirement, there are several key planning mistakes you need to avoid.

He begins his article by noting that one in four Canadians will be over 65 by 2043, and that our country “is home to an increasing number of centenarians (those 100 and older) as well.” As recently as 1990, he continues, Canucks could expect to live to age 77. Today that number has jumped to 83.

“Canada’s senior population is growing larger and living longer,” he writes. “While this is great news, it also means the younger generations need to pay more attention to retirement planning.” So, what are the things we need to avoid?

First, writes Liew, don’t start saving for retirement too late.

“If you want to build a substantial retirement fund, time is your greatest ally. The longer your retirement savings have to grow and earn compounding interest, the more you’ll have when it’s time to step back and start your retirement,” he explains.

He then gives an example – Person A, who “opens a retirement account at age 25… deposits $1,000 and contributes $500 a month,” and Person B, who at 45 opens an account, deposits $10,000, and contributes a grand per month.

“By the time these individuals turn 65, Person A will have $731,838.63 and Person B will have just $423,324.43,” Liew explains, all thanks to the “magic of compounding returns.”

Another error to avoid is failing to diversify your investments, writes Liew.

“Putting all your retirement eggs in one basket can be a risky game. Diversification is key to balancing the risk and returns in your investment portfolio. Failing to diversify can expose your retirement savings to market volatility and specific sector risks, potentially derailing your long-term plans,” he notes.

A third mistake is underestimating your retirement expenses.

“Retirement often brings its own set of financial demands, ranging from healthcare costs to leisure activities. Underestimating these can lead to financial strain, potentially forcing you to dip into savings faster than you anticipated,” he warns.

Be aware – in advance – of “all potential retirement expenses, including healthcare, travel and hobbies,” he recommends. Plan for things like “home repairs or health emergencies,” and “consider the impact of inflation on your future expenses.”

Fourth on the list is not having a clear plan for your retirement.

“Without a defined strategy and vision for your retirement, you risk running out of funds, missing out on investment opportunities, or failing to account for expenses. A clear retirement plan helps you stay focused and make informed decisions,” he suggests.

Last, but not least, is not accounting for inflation.

“Failing to account for the gradual increase in prices over time can significantly impact the purchasing power of your retirement savings. What seems like a sufficient nest egg today might fall short in the future, especially with the rising costs of living,” he concludes.

Diversification is a key strength of the Saskatchewan Pension Plan’s Balanced Fund. All the eggs are in different baskets, including Canadian and U.S. equities, non-North American equities, real estate, infrastructure, bonds, mortgages, private debt and short-term investments. Check out SPP today – a made-in-Saskatchewan retirement program that’s open to all Canadians with registered retirement savings plan room!

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The classic book Never Too Late, by Gail Vaz-Oxlade, is absolutely brimming with great saving advice that still stands up today.

In the past, she begins, no one worried about saving for retirement, and for good reason. “You got to 40 or 45 and you died. No problem there. But then life got easier, health care got better, and people started living longer. A lot longer. And a new industry was born: the retirement-planning industry,” she writes.

This book, she continues, is for anyone who has “been avoiding the whole issue of planning for your future… and (who thinks) your current approach might not really be the best way to have a happy life down the road.”

Her four key points are to “stop worrying, start saving,” to “be sensible” and avoid bad plans, like carrying debt into retirement, to take action (actually doing something) about saving and to “take control” of your finances.

Vaz-Oxlade presents her “four basic rules for managing money,” which are:

• Don’t spend more money than you make.
• Save something.
• Get your debt paid off.
• Mitigate your risks.

You need to figure out, to the penny, how much you own (bank accounts, registered retirement savings plans, TFSAs, etc) versus how much you owe (mortgages, car or other loans, lines of credit, credit cards, investment loans, student loans, etc.), notes Vaz-Oxlade.

“Subtract what you owe from what you own. That’s your net worth. If you have a positive number, it means you own more than you owe and you’re on your way to building up an asset base. If your number is negative, it means you owe more than you own and you must get busy paying down your debt and building up your savings,” she writes.

To start saving, Vaz-Oxlade introduces the concept to the personal savings rate, or PSR, “a measure of how much money you save out of the money you make.” To get to this number, add up your monthly income from all sources, then tote up what you are spending each month. Subtract what you spend from what you make.

“If you come up with a positive number it means that you’re not spending more than you make and have some savings. Good for you. If you spend every penny you make, your personal savings rate will be zero… if you end up with a negative number, you’re spending more than you make,” she explains.

No matter how pressing things are with your finances, Vaz-Oxlade stresses the importance of starting to save.

“If there is a single message I want you to hear it is that YOU MUST SAVE…. You don’t have to start by saving a whack of money. If you’ve never set a penny aside, making just a small commitment today can make a huge difference to your financial future. So, it doesn’t matter how little you have to start, the important thing is to start,” she writes.

On government retirement benefits, Vaz-Oxlade warns that “if all you will have access to are government benefits because you don’t have access to a company pension and you don’t plan to save anything while you’re working, you’ll have to lower your expectations about what retirement life will look like… in all likelihood you’ll just be making ends meet.”

At the time the book was written, Vaz-Oxlade said 11 million Canadians lack a company pension plan, “in which case you’re on the hook for all the money you’ll need to set aside for the future.”

She notes that 20 per cent of those who are eligible for a workplace retirement program “don’t participate. Really? Your employer wants to give you more money and you won’t take it?” Get to HR tomorrow and sign up if you can, she urges.

She says that a lot of what’s written about retirement focuses on the idea that “we’re gonna need a bazillion dollars if we ever hope to retire,” an argument that makes many folks depressed, or scared into “sticking their heads into the sand” on retirement saving.

All saving will be of help. She gives the example of Frank and Jeff, twins who are both 20, who know they need to save for retirement. Frank “opens up an RRSP right away, contributes $2,000 a year for 14 years, and then stops.” Jeff procrastinates, starts at 30, and puts $2,000 a year away until age 64. Both get compound gains of six per cent annually.

At 65, Frank has $283,400 and Jeff, despite having put in more than twice as much money, has just $139,200. Because “the interest he earned on the interest he earned” happens over a longer time period, he ends up with more, explains Vaz-Oxlade.

So, don’t be fazed, and start saving. “If retirement is rushing towards you like a speeding truck, do something. Find a way to cut $5 a day from your spending. Drop coffee, lunch at work…. Skip a take-out meal or night out and enjoy some good ol’ home cooking…. Invest that five bucks a day – just five bucks – using an automatic monthly savings plan in either an RRSP or a TFSA, and in 20 years at a return of five per cent, you’ll have over $61,655.”

In a section on retirement living, Vaz-Oxlade reassures us that for most people, retirement will consist of “the simple pleasures that make your life lovely to live. Think of sleeping in. Think having time to spend with friends you were always too busy to see. Think time with the grandkids or with your church pals.” Don’t expect to “completely revamp your lives” at the end of work.

A nice idea, once you have figured out what your retirement income will be from all sources, is to practice by living on that amount prior to actually living on it.

“Practising living in your future retirement circumstances lets you develop a feel for what it will be like and get ready to make the adjustments necessary. By simulating your retirement life, you not only see how you will feel, you’ll get some experience with what you’ll have to do to make it work.”

She offers a number of savings steps for those of us who haven’t started. Get started, even if you are putting a toonie away in a jar each week.

When you get a raise, “live on your pre-raise income,” and bank the raise. Tax yourself on spending – “every time you pick up a coffee, grab a burger, or hoe through a muffin, drop a buck in your bank.”

When you finally pay off a debt, put half of what you were paying each month into savings.

If you save $10 on groceries, put that $10 in the bank. Consider using a cash back credit card, as long as you pay off the balance in full each month, and bank the cash back.

There’s a rich section on how to invest on your own covering fixed interest and equity investments, mutual funds, and exchange traded funds. When investing, Vaz-Oxlade writes, pay attention to the fees you are being charged, as they “will eat into how much you end up investing.”

Vaz-Oxlade also talks about annuities, which provide monthly income for life. “During periods of high interest rates an annuity can really make your hard-earned money sing since you’re locking in that high rate for the life of the plan,” she observes.

Make sure you have thought about what you are going to do with all your newfound time before you retire, she concludes.

This is a truly great book for any of us who have yet to get started on saving for retirement. There’s lots of humour and the tone is one of a supportive coach’s advice. Definitely worth adding to your collection.

With the Saskatchewan Pension Plan, it’s you who decides how much you want to contribute. Contributions can be made automatically, and you can bump them up in future when you get a raise. And when you retire, among your choices are a lifetime annuity payment each month, or the flexibility of SPP’s Variable Benefit. 

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

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

So writes Dale Jackson for BNN Bloomberg.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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There’s no question that this era of inflation – where interest rates have jumped more than they have in decades — is squeezing Canadians.

One category that is suffering from this period of tight spending is charitable giving.

According to the Kingston Whig-Standard, “the number of taxpayers who gave to charitable causes dropped to 17.7 per cent in 2021 — a 20-year low, according to the Fraser Institute’s annual report measuring generosity in Canada,” the Whig reports. “Charitable giving hit a high in 2004, with 25.4 per cent of tax filers making donations, but gifts to charity have dropped each year since. Twenty-three per cent of taxpayers gave to charity in 2011,” the newspaper adds.

Compounding the problem is that those who do give are also giving less, the Whig continues. Donations represented 0.55 per cent of income in 2021, down from 0.58 per cent in 2001.

“The data shows Canadians are consistently less charitable every year, which means charities face greater challenges to secure resources to help those in need,” states the Fraser Institute’s Jake Fuss in the article.

The folks at Canada Helps an organization that assists charities with fundraising and has helped raise a whopping “$2 billion in giving” since its inception 23 years ago, see the decline in giving as a serious societal problem.

In their 2023 Giving Report, the organization notes that “the rising cost of living and prolonged impacts from the pandemic have more Canadians in need of charitable services. At the same time, fewer Canadians are making charitable donations.”

Canada Helps notes that while two in 10 Canadians “expect to use or are already using charitable services within the next six months,” the percentage of Canadians that give “is down five per cent in the last 10 years.”

The report notes that:

• 40.3 per cent of charities “have experienced a lasting increase in demand” since the pandemic began
• 55.2 per cent of charities have fewer volunteers
• 57.3 per cent of them can’t meet current levels of demand
• 41.8 per cent are worried about attracting more volunteers

What sorts of things are charities doing? A recent MoneySense article looked at what they called the “top 100” charities in Canada, and the impressive work they do.

According to the article, charities help distribute food via food banks and community kitchens, help deliver education programs, support people struggling to break addictions, provide rural communities with safe water supplies, help lower income folks receive specialized healthcare, and so on.

We all realize things are tougher than they have been. If you are in a position to support a charitable cause or two, consider doing so at an increased level this year. And if you don’t have cash to spare, perhaps you can consider volunteering, as so many organizations are in desperate need of such help.

Did you know that the Saskatchewan Pension Plan’s Variable Benefit option is open to all Canadian SPP members? This flexible retirement income option puts you in control of how much you want to withdraw from your SPP account, and when.

Check out SPP today!

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Four in 10 Canadians not confident about retirement: TD survey

A whopping 43 per cent of Canadians say they are “not confident” that they will be able to retire when they initially had hoped to.

That’s a key finding from new research from TD Bank, reported on by Global News.

It looks like the increase in the cost of living is a key reason behind this lack of retirement confidence, the broadcaster reports.

“A majority (71 per cent) of the survey respondents also said that the high cost of living and inflation has made it increasingly challenging to meet their financial goals over the past year,” Global notes.

For its part, TD says the rocky economy is a good reason to consult professionals when thinking about personal finances, the article adds.

“Canada’s current economic climate continues to impact how Canadians approach their finances and investments, and that’s why it’s more important than ever to seek trusted advice,” Pat Giles, vice-president of saving and investing journey at TD, states in the article.

“In challenging economic conditions, the right financial support can make a significant difference, especially when balancing competing saving and spending priorities,” he tells Global News.

The article notes that the TD study follows a recent analysis by Deloitte Canada that discovered that “55 per cent of Canadians aged between 55 and 64 years will have to make changes to their lifestyles to avoid eating up all their savings during retirement,” the article continues.

Those responding to the TD poll said that “the high cost of living” has been holding them back from making contributions to their investments, such as registered retirement savings plans (RRSPs) and Tax Free Savings Accounts (TFSAs) this year.

Half (47 per cent) planned to make no contributions to RRSPs or TFSAs, and 46 per cent of that group specifically cited the higher cost of living as their reason to hold back.

More than half, or 54 per cent, have not set up a personalized plan to help them reach their savings goals, the article continues.

But it’s never too late to start, the article concludes.

“It’s a myth that you need to have a certain dollar figure to start prioritizing your financial future. No amount is too small to start saving or investing,” Giles states in the article.

One of the nice features of saving for retirement via the Saskatchewan Pension Plan is that you are in charge of deciding how much to contribute each payday, or each month. You can start at any level you like, and adjust your contributions as you go along.

Your contributions will then be invested in a low-cost, professionally managed, pooled fund. And when it’s time to retire and turn savings into income, SPP’s options include a lifetime annuity – you get a monthly payment for life – or the Variable Benefit, where you decide how much you want to withdraw in income, and how much you want to leave invested.

Check out SPP today!

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In the concluding edition of a four-part series, Save with SPP talks to Janet Gray, CFP, of Money Coaches Canada about how money coaching helps people align their finances with their goals

In her career, which now spans more than 23 years, Janet Gray, CFP, of Money Coaches Canada says she’s learned that many people “really do need assistance around their money decisions… there are fires they may need to put out, and there is often an opportunity for financial literacy.”

And, she says, “it doesn’t matter how many zeroes you have in your income,” those with virtually any level of income can have money problems.

Speaking by telephone to Save with SPP, Gray said most people try to find their own way through the tricky waters of finance. “They don’t know how you are supposed to do it, so they may keep doing things wrong,” she explains – thinking that the ‘status quo’ approach is a correct one.

But continuing on that wrong path typically leads to an “acknowledgement point” where folks realize that their do-it-yourself approach isn’t working – and that they need some help.

So, given that, why don’t more people look for help?

“Pride can be a reason,” Gray explains. “They may be too proud to ask for help… it may be embarrassing for them.”

Other reasons for not seeking help, and “muddling along on your own,” include fears about costs, the time and effort it takes, and being comfortable with the way you’ve always done things (i.e., the status quo). Some people (incorrectly) fear the money coach will scold them, or shake a finger at them, and thus they “keep the blinders on,” and continue as they were.

But it is through coaching, she says, they gain perspective – they see there is more than one way to do things, and that there is probably a more efficient way to handle their finances.

It’s interesting, Save with SPP asks, to think about people with all those zeroes in their income having problems.

Those with higher incomes may feel they need a bigger house to keep up appearances, with a flashy car to top it all off, Gray says. But those may be just signs of runaway debt, rather than wealth, Gray explains. She cites the book The Millionaire Next Door, which found that the richest people in the ‘hood tend to live in smaller bungalows for decades, and drive sensible, older cars rather than leasing expensive ones, with low or no debt.

So for everyone with debt, be they high-income earners or not, education on “wants versus needs” is necessary, she explains.

These days, through the science of behavioural finance, there are ways to help “nudge” people into adopting more responsible practices with their finances, she explains.

“Instead of doing this, do that,” she suggests. “It will get you to your goals sooner.” Talking people through “the soft side of it,” will help them see for themselves why they shouldn’t “keep doing things that don’t succeed,” and encourage them to behaviours that will teach them a different, more sustainable and successful way of coping with their finances.

For an example, Gray says, think of getting an inheritance. In a lot of cases, we hear that those receiving inheritances burn through the money quickly, perhaps because they have no plan for dealing with extra, unexpected money.

A plan is key, says Gray.

“Look after the fires first,” she says, such as paying down or paying off debt. “It’s an emotional thing, inheriting money. So for sure, do something fun, maybe in memory of your relative.” But also consider longer-term goals, like saving for retirement, for at least some of the money.

“Go to the goals you have set for yourself financially – what would you do if you didn’t inherit the money?” It would probably be just that – spend some on current debts, save some, and put some away for retirement, she explains.

Asked what she sees as some success stories, she says the ones that stick out for her are from people who – once coached – realized they could afford to retire earlier than planned.

Many people, she explains, work away thinking they can’t afford to retire – but if they do the math, and take a look at what income they can expect from pensions, savings, and other sources, “they might already have everything they need now to go,” she says. “I have had several clients thank me, because they were able to see that they could retire earlier than they had planned.”

Retirees have a unique set of challenges as well.

She says recent research in the U.S. found that many retirees are spending less than they could have, which is basically “making the kids millionaires.” She advises some clients to spend a little more on themselves – “go to the five-star hotel instead of Motel 6… uplevel things a bit!”

Many retirees aren’t sure about how to spend money in their retirement, and worry “they are going to run out of money.” That’s not always the case, and emotions like that can get in the way of clear planning.

It’s also important for retirees not only to understand their cashflow, but to think about their estate plan, and to manage their taxes, says Gray.

When you are working, tax management is easy – it is all deducted from your pay, and you typically get a refund when you file your taxes.

But for retirees, taxes are far less predictable due to receiving multiple streams of income, and must be carefully managed.

Estate planning is also crucial at this stage, she adds. “What do you want to see done with your money upon your death? Do you want to leave money for your kids? Then here’s how much you have to live on. And you have to plan for longevity, and account for taxes,” she says.

You also want to keep things simple for your surviving spouse.

“If you have seven bank accounts, and five registered retirement income funds (RRIFs), and a mile-long spreadsheet, will the spouse be able to figure that all out?” she asks.

It’s critical for spouses to be on the same page about their money. “If one is a leader, and the other is a follower,” there can be problems if the leader passes on first.

“I spend a lot of time helping clients with questions like `will we have to sell the house,’ and `how will we pay for (expensive) long-term care in a memory ward,’ so it is important to keep the finances simple. One of you will be standing longer than the other.”

We thank Janet Gray of Money Coaches Canada very much for taking the time to talk with us for this four-part series!

Great news! The Saskatchewan Pension Plan now offers its Variable Benefit to all SPP members! This flexible benefit option allows you to decide how much to withdraw each year, while the rest of your money continues to be invested by SPP. And, you can still transfer money in from other registered sources! Check out SPP today!

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Lack of savings, unexpected costs could make retirement tough sledding: Deloitte

A new report from Deloitte Canada finds that “nearly 55 per cent of near-retiree households will have to make lifestyle compromises to avoid outliving their financial savings.”

As well, reports the financial services firm in a recent media release, that number jumps to an alarming 73 per cent when “unexpected costs” are factored in.

The report, titled Running Out of Time: An Urgent Call to Fortify Canada’s Private Retirement Pillars urges the “financial services ecosystem” to “improve the quality and access of near-retirement advice and products, help retirees manage rising retirement costs, and help Canadians build healthy savings habits early on.”

In the release, Hwan Kim, Partner, Financial Services Information and Open Banking at Deloitte Canada, notes that “given roughly 40 per cent of retirement wealth inequality is due to a lack of financial knowledge, the financial services ecosystem must collaborate with the health care system and public sector to equip Canadians with accessible retirement advice, holistic near-retirement offerings, updated pension planning, quality health care, and new resources to retire confidently.”

The report had a number of somewhat alarming findings:

• “Only 14 per cent of three million soon-to-retire households can retire with confidence, while 31 per cent of near-retirees will require support in the form of the government’s public pension system.
• Only 24 per cent of private sector workers participate in employer-sponsored pension plans.
• 40 per cent of retirees have not purchased health insurance, of which 44 per cent cite expensive premiums as the primary reason for not doing so.
• 73 per cent of near-retiree households will be at risk of financial hardships
  in later stages of life if they require long-term care.
• 58 per cent of near-retiree and retiree households do not have a formal or detailed retirement plan in place.
• 44 per cent of working Canadians were dipping into their retirement savings to pay for non-retirement-related expenses.”

Getting the word out there about pensions and retirement programs is very important. Be sure you are aware of any retirement program that exists at your workplace, and even if you worry that taking part will be costly, your future you will be very glad you signed up. We know folks who decided against signing up for pensions and benefits, figuring they needed the money, who are now older and wiser, and missing that extra monthly income they might have had.

It’s also easy to ignore signing up for vision, dental, and drug plan benefits when you are young and still can see, chew, and get through a day without a bunch of pills. When you are older, however, these things won’t be as easy to achieve, and they are costly. Sometimes if you sign up for a group insurance plan at work you can remain in it after you retire, and again, your older self will be very glad you did.

Don’t have a pension program at work? Think about signing up for the Saskatchewan Pension Plan, a not-for-profit, open, voluntary defined contribution plan that’s been building retirement futures for over 35 years. SPP’s experts will invest your savings in a pooled, low-cost fund, growing them into future retirement income. You’ll have options when you retire, including the possibility of a lifetime annuity that pays you each month for as long as you live, or the Variable Benefit, which gives you flexibility on how much income you want to receive.

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In What The Happiest Retirees Know, author Wes Moss highlights 10 attributes that can help you be a HROB – Happiest Retiree On the Block – and not an UROB, or Unhappiest Retiree on the Block.

He writes that data from the Financial Planning Association south of the border found that “only 18 per cent of U.S. households have enough wealth to cover pre-retirement consumption when they retire, meaning most Americans will not be able to maintain their pre-retirement lifestyle in retirement.”

As well, only half of U.S. citizens are even saving for retirement, writes Moss. “Very few people are prepared for the full retirement journey, and many don’t think they will ever be able to quit working,” he explains.

Here are the 10 habits that form the core of this humorous and well-written book.

Excellent money habits — $500K in savings

He writes that the happiest retirees “have $500,000 or more in savings, their mortgage payoff is complete (or at least in sight) and they have multiple streams of income.”

While $500,000 sounds like a lot of money, it is an attainable goal if you start young, he writes. He recommends that people save 20 per cent of their pre-retirement income.

“If you simply take $100 each month and invest it, assuming a 10 per cent return and that your investment compounds monthly, you’ll have a sweet $637,000 at the end of those four decades,” he writes. If 10 per cent returns seem high, Moss notes that the U.S. S&P index has averaged over seven per cent a year for the last 20 years.

Having more than one stream of income is key as well, he writes. For retirees, this could include “multiple pensions, (government retirement benefits), rental properties, investments, or part-time work.”

It’s essential to know in advance what your post-retirement income and expenses will be, so that that you can find, and fill, any gap between what’s coming in and what’s going out.

Curious and adventurous – at least three core pursuits

Moss writes that the happiest retirees have “3.6 core pursuits…. The unhappiest retirees only have 1.9.”

“Most of the core pursuits fell into four categories. There was part-time work, like teaching, consulting, and decorating. Then there was exercise and health – activities that included hiking, biking, swimming, walking and cooking. The arts were a big one, with painting, pottery, and music topping the list. And then there was adventure, such as travel, cruising, RVing, piloting and sailing.”

His list of Top 100 Core Pursuits includes yoga, tennis, golf, knitting, pickleball, skiing, joining social clubs, and much more.

Live close to independent kids who have their own homes

Moss writes that the happiest retirees live near their kids or grandkids, no more than two or three hours away.

He stresses, however, that the kids need to be independent – living away from home and on their own, without a lot of parental support. “Retirees were two times unhappier if their adult children still lived at home,” he writes. As well, “unhappy families average $714 a month in support of their 20-, 30, and 40-something-old `kids.’” The happier retirees spend less than $500 a month of their kids, he continues.

Times are tough these days, he concedes. As of September 2020, 52 per cent of young adults in the U.S. were “living with their parents… it’s the highest percentage since the Great Depression. No wonder parents are depressed.”

“If your children are not financially independent, you are 1.5 times more likely to be an unhappy retiree,” he warns.

They are married, and have either never been divorced, or divorced once

His research found that retirees who have never married, or have been divorced two or more times, are less happy in retirement than married couples where each partner has either never been divorced — or divorced only once.

You only get one do-over in marriage, Moss concludes.

They stay connected

Moss notes that the happiest among the retired are those with “at least three close connections/friendships.” Friends, he writes, “are a better happiness currency than money. You heard me correctly. Money can’t buy friends – but friends can buy happiness.”

You should see friends every month and belong to at least one group. An ideal way to merge the two concepts is to travel with friends.

They are healthy

“Happy retirees are fans on the `ings,’” he writes. This means “walking, swimming, biking, and hiking.” They “gravitate toward a healthy diet,” and enjoy a drink – particularly “white wine and gin.”

They have good home habits

“Happy retirees live in nice houses, but not McMansions,” Moss notes. “It’s OK to be comfortable. It’s less OK to have exotic zebras grazing on the 400-acre ecofarm you call home.”

They also tend to stay in the same neighbourhood, and “don’t downsize… this is a new habit gleaned from my most recent study. (They) don’t downsize into a smaller place, mainly because they anticipate their kids and grandkids will be coming home to visit.”

They also focus on paying off their mortgages first, not last. “It’s a surefire thing. Once that prodigious debt is off your shoulders, no one gets to take a four per cent bite out of your joy,” Moss notes.

They exhibit excellent investor behaviour

Moss writes that the happiest retirees invest more in stocks that pay dividends than bonds, and avoid trying to time the market and avoid short-term risks by taking a long view on investing. Their investment decisions are not “based on emotion… they are not fueled by fear. They take time to take stock (pun totally intended.”

They are, he says, careful when turning investments into retirement income, and on making sure they don’t run out of money in retirement through adherence to the “four per cent rule” on annual withdrawals.

They are masters of the middle

Happy retirees, Moss writes, are “smart spenders. Sure they may have had times in their lives when they were carrying a little too much credit card debt or struggling financially, But for the most part, they’ve prioritized saving over spending – and they don’t deprive themselves needlessly.”

The UROB (unhappy retirees) have a few characteristics as well, he writes, such as “the obsessing over money thing” and placing too much emphasis on status – a big house and a flashy car.

This is a different way to look at the whole retirement picture. We recommend that you find a place for this book in your retirement library.

If you are saving for retirement, as the book suggests, putting away a set percentage of your paycheque towards retirement is a smart way to pay your future self first.

The Saskatchewan Pension Plan allows you to make pre-authorized contributions from your bank account. Alternatively, you can set up SPP as a bill in your online banking app and set up automatic, monthly SPP “bill” payments. The difference is that this will be a bill that pays you back.

Check out SPP today! And, in breaking news, SPP’s Variable Benefit is now available coast-to-coast-to-coast for all SPP members!

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New life for an old rule of thumb – the four per cent withdrawal rate?

Let’s say you entered retirement with a large chunk of money – no monthly income other than government benefits.

How much can you afford to take out each year without risking running out of money in the future?

It’s an age-old question in retirement circles. Save with SPP once asked it of eminent retirement expert Dr. John Por who told us the answer is “unknowable,” since it would have to be based on “future interest rates, the stock markets, inflation, life expectancy and income needs.”

Writing for SmartAsset, Brian J. O’Connor says new research has found that the old “four per cent withdrawal” rule might be back in fashion.

So, what is the four per cent withdrawal rule, exactly?

“Created in 1994 by a financial planner named William Bengen, the four per cent rule posits that retirees can make a well-structured retirement fund last 30 years by withdrawing no more than four per cent of the balance in the first year of retirement, then adjusting subsequent withdrawals for inflation,” O’Connor explains.

With the volatile markets we’ve seen of late, some observers criticized the four per cent rule, arguing that in down markets, sticking to a four per cent withdrawal drives “returns risk.” In other words, if your investments are down, you are sort of “selling low” by withdrawing a set amount. Financial journalist Suze Orman, writes O’Connor, called for a more conservative three per cent withdrawal rate.

But, O’Connor continues, things are changing, and a recent Morningstar study seems to back the old four per cent idea once again.

“The investment analysis firm Morningstar has examined the safe rate of withdrawal for the first year of retirement for a few years running. Morningstar’s newest research finds that with the partial recovery of stocks, withdrawing up to four per cent is once again a safe starting point,” O’Connor notes.

Morningstar’s Amy Arnott tells O’Connor that these days, a four per cent withdrawal rate for today’s retirees has a 90 per cent chance of “still having funds remaining after a 30-year time horizon.” Research by Morningstar has made this safe withdrawal rate a moving target – in 2021, they recommended 3.3 per cent, and in 2022, 3.8 per cent.

As well, the research is based on a portfolio that has “20 to 40 per cent” exposure to stock.

The article concludes by noting that the shift in thinking to four per cent is driven by a drop in the long-term estimate for inflation and a rise in projected 30-year fixed income returns.

There’s another way of avoiding running out of money in retirement.

Members of the Saskatchewan Pension Plan can choose to annuitize some or all of their savings when they retire. With the annuity option, you can receive a payment on the first of the month, every single month for as long as you live. Want more flexibility? Check out SPP’s Variable Benefit, now available to all Canadian SPP members. You can take out as little or as much as you like with this option, and then can still consider annuitizing at a later date!

Check out SPP today!

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