After a long career as a pension lawyer with a consulting firm, I retired for the first time 13 years ago and became Editor of Employee Benefits News Canada. I resigned from that position four years later and embarked on an encore career as a freelance personal finance writer.

In December 2010 I wrote the article Is this small pension plan Canada’s best kept secret?  about the Saskatchewan Pension Plan for Adam Mayers, formerly the personal finance editor for the Toronto Star. The Star was starting a personal finance blogging site called moneyville and he was looking for someone to write about pensions and employee benefits. I was recommended by Ellen Roseman, the Star’s consumer columnist.

The article about SPP was my first big break. I was offered the position at moneyville and for 21/2 years I wrote three Eye on Benefits blogs each week. It was frightening, exhausting and exhilarating. And when moneyville began a new life as the personal finance section of the Toronto Star, my weekly column At Work was featured for another 18 months.

But that was only the beginning.

Soon after the “best kept secret” article appeared on moneyville, SPP’s General Manager Katherine Strutt asked me to help develop a social media strategy for the pension plan. Truth be told, I was an early social media user but there were and still are huge gaps in my knowledge. So I partnered with expert Leslie Hughes from PunchMedia, We did a remote, online presentation and were subsequently invited to Kindersley, Saskatchewan, the home of SPP to present in person. All of our recommendations were accepted.

By December 2011, I was blogging twice a week for SPP about everything and anything to do with spending money, saving money, retirement, insurance, financial literacy and personal finance. Since then I have authored over 500 articles for savewithspp.com. Along the way I also wrote hundreds of other articles for Employee Benefit News (U.S.), Sun Life, Tangerine Bank and other terrific clients. As a result, I have doubled my retirement savings.

All my clients have been wonderful but SPP is definitely at the top of the list. I am absolutely passionate about SPP and both my husband and I are members. Because I was receiving dividends and not salary from my company I could not make regular contributions. Instead, over the last seven years I have transferred $10,000 each year from another RRSP into SPP and I would contribute more if I could.

By the end of 2017 I started turning down work, but I was still reluctant to sever my relationship with SPP. However, as my days became increasingly full with travel, caring for my aged mother, visiting my daughter’s family in Ottawa, choir and taking classes at Ryerson’s Life Institute, I realized that I’m ready to let go at long last. After the end of May when people ask me what I do, I will finally be totally comfortable saying “I am retired.”

I will miss working with the gang at SPP. I will also miss the wonderful feedback from our readers. I very much look forward to seeing how both savewithspp.com and the plan evolve. My parting advice to all of you is maximize your SPP savings every year. SPP has changed my life. It can also change yours.

Au revoir. Until we meet again….

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Written by Sheryl Smolkin
	Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

By Sheryl Smolkin

My husband and I helped our daughter buy her first house and a few years ago we bought my son a car. We also partially paid for their education so they were able to graduate debt free. I consider these gifts as an excellent investment because we could afford it and it was our pleasure to share our good fortune with them when they needed it most.

So when I came across Sean Cooper’s blog Why Millennials Should Save Their Down Payment and Not Rely on the Bank of Mom and Dad, I figured I’d better find out what he has to say. Sean believes that parents who cough up all or part of the down payment for a house are generally hurting their offspring instead of helping them. “By showing your millennial child tough love, you’re teaching your kids a valuable lesson: not everything in life is handed to you in a silver platter,” he says.

In an excerpt from his book The Bank of Mom and Dad: Money, Parents, and Grown Children published in the Globe and Mail last year, Derrick Penner says the first question the family should explore is whether the timing is right. For young adults just setting out on a new career, it might be more logical to rent (assuming they’ll also be able to save some money) and kick-start an investment plan that would lead to home ownership later than to buy real estate before they’re really ready.

But if you do decide to give cash to your kids for a down payment, How to help your kids buy a home by Michele Lerner on Bankrate.com has some great tips. First and foremost, she says make sure your own retirement needs are adequately funded before you part with a large lump sum. Also, if you co-sign on a mortgage or loan, understand that you will be liable if your child defaults, so make sure in a worst case scenario you can also afford to make the mortgage payments.

Help your child buy his/her first home, a post on GetSmarterAboutMoney.ca says if you do decide to go ahead, there are three common options: loan your child the money; co-sign your child’s mortgage; or pay some or all of the costs as a gift. Make sure you understand the pros and cons of each option, and how your tax situation and financial plan could be affected.

And finally, an article last year by Adam Mayers in the Toronto Star correctly notes that Emotions can run high when helping the kids buy a house. He says that if family-financing is in the home-buying cards for the younger generation, some issues to consider are: securing any loan via promissory note or against title; the pros and cons of joint ownership; and, how to get your money back. In a mini-poll in the article 68% of those who voted said they would be willing help their kids with a down payment for a home.

*****

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

I’ve been thinking about the cost of health and long term care a lot lately because my 88- year old Mom recently had a bad fall and cracked five ribs. She is recovering at home but she is in a lot of pain, and requires 24/7 care for the foreseeable future.

The plan has always been to keep her in her own apartment as long as possible. Fortunately her wonderful, privately-paid caregiver (a registered practical nurse) who normally works 40 hours/week has virtually moved in and is helping us to take excellent care of her. But as costs mount up over the short run, we are beginning to wonder if this will be a luxury she soon can’t afford.

Access to public resources varies across the country, but in Thornhill, Ontario where she lives , I’ve been told that a maximum of one hour a day (and most probably only two hours a week) will be offered to her on the government dime. But I’m grateful that 22 in-house physiotherapy sessions to get her up and moving better and train her to avoid future falls have been approved.

So if health and long-term care are not in your retirement planning radar yet, I have put together a few recent articles that may get you thinking about what you can expect.

On Retire Happy, Donna McCaw writes about Your Health in Retirement: Asking for Help. She cites staggering statistics from the Vancouver based Canadian Men’s Health Foundation about men and heart disease, cancer, diabetes, obesity, alcohol-related deaths as well as suicide. She interviewed recently-retired men who made it their first priority to get healthy and get rid of their “ring around the waist” by embracing fitness and learning to eat healthy.

Life after retirement: Health care costs require careful planning in the Financial Post is by Audrey Miller, the Managing Director of  http://www.eldercaring.ca/. She cites home care costs by the week and by the year (albeit in Ontario) and says as family members and professionals, we need to be better prepared. The cost of care is only going to become more expensive, especially as our public and private resources are reduced. Not only will we soon have more seniors than young people under 15, but our pool of those who are willing to be paid to do this work will also become smaller.

The coming health benefits shock for retirees by Adam Mayers at the Toronto Star reminds us that contrary to what many people believe, glasses, drugs and nursing homes will not in most cases be paid for by our universal health care. He quotes Kevin Dougherty, president of Sun Life Financial Canada who says one reason for the disconnect may be that we form an opinion of the health system through our use of it. Most of us are covered by workplace health plans and we don’t need much from these plans during our earlier years, and into middle age what we do need is covered.

Navigating Retirement healthcare is a comprehensive report from CIBC Wood Gundy discussing health care cost considerations in retirement. The study notes that long-term care is classified as an extended healthcare service under the Canada Health Act but the role of publicly-funded LTC facilities is changing as provincial governments limit the expansion of these facilities by reducing the number of registered nurses, maintaining or decreasing the number of available beds, and tightening the qualifications for acceptance into a facility.

Even if these policies were reversed, an individual’s current wait time of one year will likely increase unless significant expansion of the LTC provision occurs. The result is that a greater number of seniors are paying to enter more expensive for-profit private or semi-private facilities that can cost up to $7,000 or more a month.

Finally, Long-term care costs in Saskatchewan 2014 by Sun Life discusses how residential facilities, retirement homes/residences, government-subsidized home care, adult day care and private home care operate. Government subsidized options including home care are administered by the Regional Health Authority (RHA). As RHA resources are limited, many seniors don’t get the care they need from RHA services and have to rely on private home care services. The provincial tariff for skilled nursing ranges from $42-$70/hour while 24 hour live-in care can cost from $21-30/hr.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

I recently returned from travelling in Europe to glorious fall colours, shorter days and a chill in the air. Although we saw beautiful things in wonderful places, as we landed I couldn’t help thinking that we have so much to be thankful for this Thanksgiving, right here at home.

Whoever is elected as the next Prime Minister, Canadians will continue to enjoy considerable peace and prosperity. There are poverty and income inequality issues we definitely need to address, but unlike refugees from war-torn countries, most of us have a roof over our head and food on the table.

Here are a few interesting blogs and media stories that appeared in my absence you may find informative when you’ve had enough turkey and pumpkin pie.

If you have been putting off joining SPP or increasing your RRSP contributions, take a look at Create a Money Machine: The Effect of Compounding by Billy Kadeli from RetireEarly.com on the Financial Independence Hub. He tells young people how they can create their own “personal money machine” by investing early and taking advantage of compounding.

Blonde on a Budget’s Cait Flanders suggests you can Choose Your Own Financial Adventure. When faced with financial options at a key milestone or crossroads in your life, pick the smarter choice to protect your financial future instead of ending up in debt or even bankrupt.

In July, Sean Cooper wrote Take Car Insurance into Consideration When Buying Vehicles. Car insurance costs vary depending on the type of vehicle you choose. Before test driving vehicles and falling in love with one, he recommends that you get car insurance quotes for each model. By making car insurance part of your new car decision, it will give you a clearer idea about the total cost of ownership.

And on the election front….

Adam Mayers at the Toronto Star writes that Your Vote Gets a Better CPP or a bigger TFSA, but not both. Conservative Leader Stephen Harper and his Conservatives support a $10,000 TFSA limit. NDP Leader Tom Mulcair and Liberal Leader Justin Trudeau do not. But the quid pro quo is that the parties vying to defeat Harper agree on an expanded CPP.

If you or a family member have student debt, you will be interested to know that Liberal platform includes student debt relief. If elected, Trudeau would increase the Canada Student Grant for low-income students by 50% to $3,000 a year for full-time students and $1,800 for part-time students. As well, graduates would be required to start paying their debts only after they’re earning at least $25,000 a year.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

Over the last weeks the stock markets have been bouncing all over the place and now we are told that the Canadian economy is officially in recession. While it is natural to be concerned, particularly if you are close to retirement, the general consensus from most experts is to have confidence in your financial plan and stay the course. Today, and in coming weeks we will provide you with information to help you weather the storm.

In How to make sense of markets gone mad, Toronto Star personal finance writer Adam Mayers says this is a market correction of significant proportions. It could be short and sharp, or it may be long and lingering depending on how the real economy reacts. It may be tough to take the gyrations, but what it does do is set the stage for the next big rise.

Rob Carrick at the Globe and Mail says It’s decision time for your ‘dead’ money. If the summer market decline hasn’t stoked your appetite to buy stocks, he suggests that all the cash piling in your account is pretty much dead money. That’s true if you’re leaving the money uninvested, and also if you’ve taken the good sense step of keeping your cash in a high interest investment account.

MoneySense authors Jessica Bruno and Dean DiSpalatro consider What the recession means for your portfolio. They interviewed Jay Nash, portfolio manager at Roberts Nash Advisory Group, National Bank Financial, in London, Ontario. Nash’s message to clients is straightforward: The recession was largely focused in the energy sector, with other areas of the economy performing well. Most importantly, June’s solid data—pushed along by consumer spending—was better than expected.

Protecting your retirement income from the stock market by Wayne Rothe is on Retire Happy. Rothe reviews “Your Retirement Income Blueprint,” by Winnipeg financial advisor Daryl Diamond. Diamond writes about the impact of market gyrations on the “retirement risk zone.” This is generally the five years immediately before and after retirement age. A big drop in the value of your investments during this period can be disastrous.

And finally, Michael James on Money questions How Much Diversification Do You Need? He says, “Diversification is simple for indexers like me. We own all stocks for as low a cost as possible. There is no such thing as ‘di-worse-ification’ because we have no opinions about one stock being better than others. There is no reason to fret over active mutual funds because index funds are cheaper and cover the same asset classes.”

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

Tomorrow will be September and that means it won’t be long before you are thrown back into the maelstrom of activity that signifies the beginning of the business and academic year. So this week we continue with our back to basics theme, and bring you excerpts from some of our favourite personal finance writers and bloggers.

I really like The Sabbatical as a Dress Rehearsal for Retirement on the Financial Independence Hub by Adrian Mastracci. My husband retired when a four month sabbatical was refused but fully intends to seek contract work again in the fall.

I’m Not an Entitled Millennial Because I Can’t Afford to Buy a House in the City I Live In by Jessica Moorehous on Mo’ Money Mo’ houses explains why she and her husband decided to rent indefinitely when they couldn’t buy even a small home in Toronto for $500,000 with 20% down.

Mr. Money Moustache asks What if Everyone Became Frugal?. He concludes that it is savers and investors and not consumers that are the engine of economic growth. Only by sacrificing current consumption, can people put money into banks or share offerings, which end up in the hands of new and existing businesses allowing them to increase their productivity. Capital creates productivity, and productivity is the driver of our standard of living.

With Prime Minister Stephen Harper’s pre-election announcement that if elected he will raise the tax-free amount you can withdraw from your registered retirement savings plan to buy a first home to $35,000, Rob Carrick’s column Don’t buy a house at the expense of your RRSP is very timely.

And finally, To owe or not to owe, not such a simple question says Adam Mayers in the Toronto Star. Conventional wisdom has it that you shouldn’t owe anybody anything when you retire because your ability to pay it off is diminished. But as with most things to do with personal finance, he says one size doesn’t fit all. In some cases, it could make sense to pay the debt off slowly.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

Back from two weeks of vacation and back in the saddle! While it’s hard to get re-establish anormal routine, it’s not difficult to find many interesting personal finance stories and blogs to share with you because all of our favourites kept on blogging when I was away.

On Boomer & Echo, Robb Engen wrote about The Evolution of Loyalty Cards. Scanning weekly flyers and clipping coupons is a great Canadian tradition but he says that like the landline telephone, VCRs, and analog TV – coupons and flyers are on their way out. Retailers are moving online and developing smart phone applications to get more personal with their offers.

In Is Paying Down a Mortgage Underrated? on Our Big Fat Wallet, Dan says the real value of paying down the mortgage isn’t the interest savings. With rates as low as they currently are, the interest you save will likely be minimal. He suggests the best approach for anyone looking to use extra funds to pay down their mortgage is to consider a ‘hybrid’ approach – using the money to reduce the mortgage and then putting more money each month towards investing.

Blond on a Budget’s Cait Flanders has finally finished her year-long shopping ban. In a herculean 6,000 word blog The Year I Embraced Minimalism and Completed a Yearlong Shopping Ban she explains why she did it and how it changed her life. Flanders says, “There is nothing I need right now that could make my life better than it already is and that’s a great feeling to end this year-long challenge with.”

Globe & Mail reporter Ian McGuigan agrees that accumulating wealth is a challenge but he says that “decumulating” it can be trickier still. In a recent article he refers to the paper Making Sense Out of Variable Spending Strategies for Retirees written by Wade Pfau, a professor of retirement income at American College in Bryn Mawr, Penn. McGuigan notes that spending only 4% a year works out pretty well if you don’t want to outlive your money. It also keeps your spending at a constant level, in after-inflation terms. However, it’s not so good if you’re interested in being able to live as well as possible in retirement.

Guess who’s saving for retirement? The kids  reports Adam Mayers at the Toronto Star. While we often point the finger at young people as having limited interest and understanding of their personal financial affairs, Sun Life finds that’s not so. Younger workers know a good deal when they see one and like all smart consumers they’re snapping it up. Only 40% of those in their 40s and 50s are taking full advantage of matching Registered Retirement Savings Plan or pension money in plans Sun Life administers. On the other hand, 90% of those in their 20s (presumably new employees) are opting in.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

I retired early and elected to start receiving my Canada Pension in 2010 at age 60. As I result my pension was reduced by 30% (.5% for every month prior to age 65) and I currently receive $675.20/month. At the time, the general consensus among many financial advisors was based on the old adage, “one in the hand.” In other words, it was worth taking the reduction to receive the reduced benefit for five extra years.

With changes made to the program beginning in 2012, if you choose to take CPP early, the reduction is greater. For example, if you retire in January 2015 at age 60, your pension will be reduced .58% for every month prior to your 65^th birthday (to a maximum of 34.8%) and a January 2016 retirement will lead to a reduction of .60% per month until age 65 (a total reduction of 36%).

For a recent Toronto Star article, Some math on taking CPP early or late, Adam Mayers asked two actuaries and a financial planner for a few rules of thumb readers could use. Although there isn’t a simple one-size fits all answer, here is what they told him:

• If you need the money to live on, take it as soon as possible.
• If you have health problems or have a family history of short life spans in retirement, take it as early as possible.
• If you think you can invest the money and come out ahead take it early. But be warned you will need a pretty hefty rate of return because you will pay tax on the pension and tax on the profit unless you can put it into an RRSP or a Tax-free savings account (TFSA).

I particularly like how Retire Happy blogger Jim Yih approached the problem in Taking CPP early: The new breakeven points.  Here is the chart he created for 2015.

Yih’s table reveals that if you take CPP at age 60 in 2015, (assuming you qualify for the maximum CPP at age 65) your benefit will be $643.31/month (reduced from $986.67).

Alternatively, if you wait until age 65 to collect a higher amount, you are foregoing the $38,598.53 to get more in the future. It will take until age 74 (the breakeven age) to make up the $38,598.53 you left on the table.

If you think you will live past age 74, the math suggests you should wait until age 65 or later to start receiving CPP. Unfortunately no one knows how long they will live. However, the Canadian Business Life Expectancy Calculator is one way to get a rough idea if you will live to a ripe old age. For example, I am currently age 64 and the calculator says I will live to 87.01 years.

You can apply for CPP at age 60, but if you continue to earn income beyond that age, you will still have to make CPP contributions until at least 65. A self-employed person will have to make both the employer and employee contributions. After age 65, CPP contributions are optional to age 70.

As noted by government benefits expert and consultant Doug Runchey in an earlier blog on savewithspp.com, CPP post-retirement benefits are actually quite a good deal. A Service Canada PRB Calculator will help you calculate how contributing after you begin receiving CPP benefits but before you stop working will increase your CPP benefits at retirement.

Based on your age, financial situation, projected life expectancy and whether you intend to keep working for some period of time after you retire, your financial planner can help you decide what the best time is for you to apply for CPP.

By Sheryl Smolkin

See Part 1 and Part 2.

In the first two parts of this series on how to save money for retirement we focused on how to get started and some of the registered and unregistered savings plans available to Canadians.

This final segment looks at some other ways (in no particular order) you can both grow and preserve your retirement savings. And making sure your children are educated to effectively manage their finances is a big part of this discussion.

1. Keep fees low: You ignore investment fees at your peril, says Toronto Star personal finance editor Adam Mayers in a recent article. The simple chart below illustrates what happens if you invest $6,000 a year for 40 years in a registered retirement savings plan. It assumes your RRSP earns a little over 5% a year and ignores taxes.
   1. In a utopian fee-free world, your money is worth $785,000 in 40 years.
   2. In a 1-per-cent fee world, you’ll have $606,000 (23% less).
   3. In a 2-per-cent fee world, you’ll have $435,000 (45% less).
   4. Annual fees in the Saskatchewan Pension Plan (SPP) average 1%.
2. Understand your risk tolerance: You should have a realistic understanding of your ability and willingness to stomach large swings in the value of your investments. Investors who take on too much risk may panic and sell at the wrong time. Other factors affecting your risk tolerance are the time horizon that you have to invest, future earning capacity, and the presence of other assets such as a home, pension, government benefits or an inheritance. In general, you can take greater risk with investable assets when you have other, more stable sources of funds available.
3. Develop an asset allocation plan: Once you understand your risk tolerance, you can develop an asset allocation strategy that determines what portion of your retirement account will be held in equities (stocks) and fixed income (bonds, cash). The investment allocation in the SPP balanced fund is illustrated below.
4. Rebalance: The asset allocation in your portfolio will change over time as dividends are paid into the account and the value of the securities you hold goes up or down. Rebalancing helps you reap the full rewards of diversification. Trimming back on a winner allows you to buy a laggard, protect your gains, and position your portfolio to benefit from a change in the market’s favorites.
5. Auto-pilot solutions: Balanced funds including the SPP balanced fund are automatically rebalanced. In your RRSP or company pension plan Target Date Funds (TDFs) are another way to ensure your investments reflect your changing risk profile. Developed by the financial industry to automatically rebalance as you get closer to retirement. TDFs are typically identified by the year you will need to access the money in five year age bands, i.e. 2025, 2030 etc. They are available in most individual registered retired savings plans and in your employer-sponsored group RRSP or pension. However, all TDFs are not alike so consider the investment fees as compared to the expected return before jumping in.
6. Educate yourself: Personal finance blogs contain a wealth of information about everything from frugal living to tax issues to how to save and invest your money. You can find out about some of them by listening to our podcast series of interviews on savewithspp.com or reading the weekly Best from the Blogosphere posts. Some posts are better than others so caveat emptor. But blogs like Retirehappy and Boomer & Echo have huge archives so you can find answers to virtually any virtually personal finance question.
7. Choose your retirement date carefully: We are living longer so your money has to last longer. And starting in April 2023, the age of eligibility will gradually increase: from 65 to 67 for the Old Age Security (OAS) pension. Even if you are among the minority who have a defined benefit pension, retiring early means you will get a reduced amount. Whether you keep working because you need the money or you love your job, you will have a more affluent retirement if you work full or part-time until age 65 or longer.
8. Develop other income streams: One of the things that stayed with me after reading Jonathan Chevreau’s book Findependence Day is the importance of having multiple income streams in retirement. So even if you are saving at work or in an individual RRSP, don’t put all your eggs in one basket. While you may not want to work at your current job indefinitely, you may be able to use your skills or hobbies to do something different after retirement. For example before I retired I was a pension and benefits lawyer. Now I augment my retirement income by writing about workplace issues.
9. Start RESPs for your kids: The following two Globe and Mail articles by financial columnist Rob Carrick brought home to me the impact that your children’s debt and failure to launch can have on your retirement.
   1. Carrick on money: Will millennials ruin parents’ retirement dreams?
   2. Parents of Gen Y kids face their own financial squeeze

Registered educational savings plans allow you to accumulate money for your children’s education tax free and receive government grants that add to your savings. When the money is paid out, your child pays taxes, typically at a lower rate. Saving for your kids’ education now so they can minimize student loans down the road is one of the best investments you can make in your future ability to retire sooner rather than later.

10. Raise financially literate children: And last but not least, educate your children about money so they grow into financially responsible adults. Every event from the first allowance you give your kids to buying Christmas gifts to planning for college is a teachable moment. Someday your offspring may be managing your money and ensuring you are properly taken care of. That’s when all of your great parenting skills will definitely come home to roost!