For the vast majority of people, retirement is a far-away, unknown and somewhat scary idea – having to live on the money you’ve saved (gulp) because you’re too old to work.

In fact, according to The India Times, research this year by LiveCareer in the U.S. found that “61 per cent of workers fear retirement more than death, and for a large segment of participants (64 per cent) the thought of retiring is scarier than the idea of getting a divorce.”

But, reports the Starts at 60 blog, there is a solution for those who “at the end of a long and fulfilling career… (are) feeling lost about their purpose in life.” That solution is finding a post-work hobby.

“One’s golden years can also present an opportunity to rediscover meaning and purpose and one way to do this is through hobbies,” the blog notes. “Many individuals have found new meaning and fulfillment in their lives by pursuing hobbies and interests that they may have neglected earlier in life due to work and family commitments.”

The blog says you can pursue “creative endeavours such as painting or writing, or outdoor pursuits such as hiking or gardening. Hobbies can bring a sense of joy and create new experiences, encourage a sense of community, and help maintain a healthy lifestyle.”

The chief benefits of having a hobby for those over 60, the blog continues, are that the hobby can “provide a sense of purpose and fulfillment in later life, offer an escape from daily routines and stress, stimulate creativity and personal growth, and provide a sense of accomplishment.”

“Hobbies can also bring joy, satisfaction and a sense of achievement to one’s life, as well as provide opportunities to socialise and connect with others who share similar interests. Furthermore, hobbies can also help keep the mind and body active, leading to a healthier and more fulfilling retirement,” the blog concludes.

There are other, more specific health benefits from staying active (via hobbies) in retirement, reports the U.S. National Institute on Aging.

An article on the organization’s site lists the following benefits for those with hobbies, who:

• “Are less likely to develop certain diseases. Participating in hobbies and other social activities may lower risk for developing some health problems, including dementia, heart disease, stroke, and some types of cancer.”
• “Have a longer lifespan. Studies looking at people’s outlooks and how long they live show that happiness, life satisfaction, and a sense of purpose are all linked to living longer. Doing things that you enjoy may help cultivate those positive feelings.”
• “Are happier and less depressed. Studies suggest that older adults who participate in activities they find meaningful, such as volunteering in their communities or being physically active, say they feel happier and healthier.”
• “Are better prepared to cope. When people feel happier and healthier, they are more likely to be resilient, which is our ability to bounce back and recover from difficult situations. Positive emotions, optimism, physical and mental health, and a sense of purpose are all associated with resilience.”
• “May be able to improve their thinking abilities. Research suggests that participating in certain activities, such as those that are mentally stimulating or involve physical activity, may have a positive effect on memory — and the more variety the better. Other studies are providing new information about ways that creative activities, such as music or dance, can help older adults with memory problems or dementia.”

OK, time for a mid-post recap – hobbies not only help give you a renewed sense of purpose, but you may develop a new community of friends, be healthier, live longer, and think more clearly. Our line dance instructors frequently tell us seniors that dance not only helps our bodies through exercise, but it helps our minds as well – we are forever learning new steps and new dances.

If you are a happy nine-to-fiver grinding away at an important job somewhere, the idea of getting a hobby may seem a little silly. But, reports Forbes, it’s the workaholic who should be thinking about life after work the most.

“People with hobbies and activities before retirement can transition more easily than workaholics with few interests beyond their jobs. This bears consideration before retirement,” the magazine warns.

If you don’t plan to do something, ideally new or more often, after you’re done with your name tag, you may have an unhappy retirement, Forbes continues.

“Many retirees lead interesting lives, but a fair number are bored a significant amount of time. Some have few social connections. Yet still others enjoy life more than ever,” the article concludes.

You really have to think outside the box after life after work. If anyone had told us 15 years ago that we’d been teaching line dancing to seniors, going on a trip to Nashville with fellow line dancers, or taking a line dancing cruise, we’d have laughed. But we’ve had great new experiences and developed a new set of friends thanks to this one easy, fun hobby.

Certainly, the “what to do with all the time” side of retirement can be a challenge, and for many, so can the financial saving side of things. If you’re relying on your own efforts to fund your future retirement, a great partner is waiting in the wings to help you – the Saskatchewan Pension Plan. Designed for both individual savers or for use as a company pension plan, SPP collects contributions from its members, invests them in a low-cost, professionally managed pooled fund, and grows them into retirement income choices that include a lifetime monthly annuity or the more flexible Variable Benefit.

Check out SPP today!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Check out SPP today!

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One of our fellow line dancers told us recently that she and her husband are about to start a 75-day challenge. For that entire month and a half, they will exercise for 90 minutes a day, follow a strict diet (Weight Watchers for her, “clean eating” for him), will drink a gallon of water every day, won’t drink alcohol, and will read at least 10 pages of non-fiction per day.

Wow. We’ll see how they do, but it got us thinking about money challenges – what sorts of things are people challenging themselves about with their money?

The folks at Reader’s Digest have a few money-related challenges to start the ball rolling.

There’s the “one per cent savings challenge,” the magazine reports.

“For this challenge, no drastic lifestyle changes are needed. You’ll simply contact your workplace and increase your retirement contribution by one per cent. Then, set a schedule. Every two to three months (whatever works for you, just stay consistent), increase it by another one per cent,” Reader’s Digest suggests. 

An intriguing one is the “100 envelope challenge,” the magazine continues.

“Want to save more than $5,000 in three months? TikTok’s viral 100-envelope challenge can help you do just that. Grab a box of colourful money-saving envelopes and label them 1 to 100. Each day, you draw an envelope, and whatever number you draw, you add an equal amount of cash inside. For instance, if you draw No. 27 on day one, then you’ll fill the envelope with $27, seal it and place it in a basket or drawer. After 100 days and 100 envelopes, you’ll have saved a total of $5,050,” the article notes.

We’ll Canadianize another tip from Reader’s Digest, since we haven’t had dollar bills for a while. The idea is that every time you get a Loonie in your change, “take it out of your wallet and put it away in a money pouch.” You can, in time, up this by including toonies and $5 bills, the article suggests.

Forbes magazine has a few more on offer.

“Save one dollar a day. That’s it! Do it for the entire year to kickstart your savings fund in a way that feels manageable,” the magazine suggests.

You can boost the savings amount down the road – if you were to save $20 a week, you’d have $1,040 by the end of the year, Forbes continues.

How about the “Roll the Dice” savings challenge? “Take a six-sided die and roll it each day. Worst case scenario: you tuck away $6 a day for a total of just over $2,000 a year. But this is a situation where your “worst” scenario is great news for your savings account,” Forbes notes.

A third gem from Forbes is the “no-spend challenge.”

“A no-spend challenge can take place during a single day, over a month or even longer. While the challenge is on, you can’t spend any money beyond routine bills and any other regular expenses you’ve already planned for (say, gas for your commute or getting a prescription refill from the pharmacy). At the end of the challenge, take the “extra” money you’ve discovered out of your chequing account and move it to a savings account,” the magazine recommends.

The Inspired Budget blog offers up a few more.

The Holiday Helper Challenge, the blog reports, provides “a way to get ahead of the huge expenses of the holidays. Starting January 1, set aside $20 from each week’s budget and put it into savings.”

“You can use this for holiday gift buying, or use it to save up for a vacation or another major expense. By the end of November, you will save an extra $960 on a bi-weekly budget,” the blog notes.

We’ve talked about saving loonies, toonies and even fivers, but if that’s a bit too tough for you right now, how about the 365-Day Nickel Saving Challenge?

“On the first day, deposit $0.05 into savings. On the second day, deposit $0.10, and on the third day, $0.15,” the blog explains.

“Basically, you add a nickel to the previous day’s savings every single day. Then by the last day, you will deposit $18.40,” the blog notes. “When you look at those numbers, they seem so doable! The best thing is that when you add it all up, the total you will put into savings will be a whopping $3,300!

Finally, one we all know well, there’s the Spare Change challenge.

“Whenever you get loose change, you put it in a jar or piggy bank. When that jar fills up, take it to the bank and put it in your savings account,” the blog suggests. “If you have never tried to save your loose change, it might surprise you how much you can accumulate.”

Mrs Save with SPP used the spare change route as part of her effort to boost her own Saskatchewan Pension Plan savings. Every time the piggy bank was full, we went to the coin counter, turned coins into bills, and then put it in the bank. Online, we had set up SPP as a bill payment, and presto, there’s another few bucks in the retirement kitty.

After all, your future you will greatly appreciate those savings, no matter what challenge you’ve selected to create them.

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There was a time when taking debt into retirement was considered an absolute no-no. But in these days of higher living costs, less helpful interest rates, and the many temptations of debt, is owing money when you retire now the norm?

Save with SPP took a look at this topic, which is one that we are well acquainted with on a personal basis!

Well-known personal finance writer Rob Carrick recently covered this topic in The Globe and Mail. He cites figures from insolvency expert Scott Terrio that show that, according to the most recent data, “42 per cent of senior households had debt…. compared to 27 per cent in 1999. Vehicle debt held by seniors nearly tripled between 2005 and 2019, while mortgage debt quadrupled.”

(Save with SPP talked with Scott Terrio a little while ago on the topic of retiring with debt. Here’s a link to that article: Debt can squeeze the spending power of seniors: Scott Terrio | Save with SPP)

Carrick suggests that younger people have a conversation with their parents about debt.

“Parents helping their adult children financially is the new normal in family life. It’s less common for those kids to help their parents, but high debt levels among seniors suggest this could change. Boomers and Gen Xers, do you know how well set up your parents are in their retirement or pre-retirement years,” he asks.

An article in Forbes agrees that “retiring with debt is often considered a cardinal financial sin: Every dollar you owe reduces your income in retirement, after all.”

However, the article warns, trying to get out of debt before you retire might also cost you. Huh? “Blindly prioritizing debt reduction before retirement savings, particularly for low-interest debt, could shortchange your nest egg,” the writers at Forbes warn.

On the other hand, not prioritizing debt has consequences as well, the article continues.

Currently, the article notes, credit card interest rates are well over 20 per cent. “Paying interest rates this high would hamstring your finances at any stage of life, let alone when you’re living on a fixed income in retirement. That means you need to prioritize paying down as much high-interest debt as possible before you stop working—and then keep from accruing any new credit card debt.”

The folks over at GoBankingRates say debt is manageable for retirees, but it’s no picnic.

“Yes, you can retire with debt, but it may impact the quality of your retirement. Having debt, especially high-interest debt, can strain your retirement savings and limit your financial freedom. It’s important to assess the type and amount of debt you have and create a plan to manage it effectively,” their article notes.

The article recommends trying to “minimize or clear your debts before retiring.” You might need to think harder about when you want to retire, boost your savings, or even downsize as strategies to cope with debt, the article continues.

“Focusing on high-interest debts, like credit card balances, should be a priority. Developing a comprehensive plan on how to get out of debt before retirement can significantly ease your financial burden during your later years,” the article notes.

MoneySense provides some good news on this topic, noting that some of your debt will eventually get paid off – and that when that happens, your retirement spending power gets a boost.

“If you only have a small mortgage and a few years of payments remaining, your income requirements may be on the verge of a big decrease. I’ve seen a lot of retirees with generous DB pensions work hard to pay off debt, retire, and suddenly find they’re flush with cash flow because their $500, $1,000, or $2,000 monthly mortgage payment disappears,” MoneySense reports.

There are several themes here to think about – retirement with debt is not seen as ideal. But neither is not saving for retirement in order to pay off debt. If you do bring debt with you on the retirement voyage, each time you pay something off you’ll have better cash flow.

All the articles suggested consulting a financial professional to help map your personal route – that’s always good advice.

If you don’t have a workplace pension plan, or want to augment your savings, have a look at the Saskatchewan Pension Plan. With SPP, you can consolidate little bits of savings in various RRSPs into one place, and also make regular contributions. SPP will grow your investments in a low-cost, professionally managed, pooled fund, and when it’s time to collect, your options include monthly annuity payments for life or the flexible Variable Benefit option.

Check out SPP today!

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Any of us who play golf watch with awe as better golfers blast their drive 100 yards past ours, and putt for birdies instead of bogeys. What, we wonder, are they doing differently to be having such success?

Save with SPP had those same sorts of thoughts about investing recently. After taking a boat tour of the river/canal network of Fort Lauderdale, Florida, we wondered what did folks do with their investments that brought them here – massive, waterfront houses with multi-storey crewed yachts?

Let’s see what the Interweb tells us.

An article from The Globe and Mail suggests that “the wealthy have a greater exposure to real estate and alternate investments in their portfolios – as much as a third.”

The article quotes Nancy Grouni of Objective Financial Partners Inc., in Markham, Ontario, as saying “a typical portfolio breakdown would be 25 per cent real estate – excluding their personal residences – plus 10 per cent alternative investments such as hedge funds, derivatives, foreign currency and private equity. Then a third of the portfolio consists of cash and fixed-income vehicles, and the balance is in equities.”

“I find that people with a higher net worth tend to be more comfortable with those non-traditional, alternative ways of investing,” Grouni tells the Globe. “They have invested in private equity through personally held corporations; that’s how they earned a living.”

Writing for Business Insider, Peter Syme tries to find out the investing preferences of what he calls “ultra high net worth individuals,” or UHNWIs.

His research breaks it down as follows – 26 per cent is invested in equities, 34 per cent is in commercial property (21 per cent of the total commercial investment is direct, meaning owning the property, while the rest comes through real estate investment trusts or REITs), 17 per cent goes into bonds, private equity (again this means direct ownership of something, such as a business) gets nine per cent, “investments of passion” get five per cent and gold, three per cent. Seven per cent is invested in “other” investments, and the final two per cent is invested in cryptocurrency, the article concludes.

What’s an investment of passion? “Art, cars and wine – which may be bought for enjoyment or simply as an investment,” the article notes.

The Medium blog looked at folks in the U.S. who were millionaires, but perhaps not yet UHNWIs, and got a different asset mix.

“On average, the portfolios of the wealthy are heavily weighted toward equities, which make up 53 per cent of assets. The remainder is largely divided amongst bonds (15 per cent), cash (11 per cent) and CDs/money market funds (nine per cent). Real estate, excluding the primary residence, comprises just six per cent of their net worth,” the article notes, citing research from the National Bureau of Economic Research in the U.S.

There’s much more emphasis on owning stocks in this group, the article notes.

“Take it from the best: Warren Buffett’s will dictates that 90 percent of his wealth be invested in stock market index funds when he dies, with the remainder in government bonds,” concludes.

An article from Forbes offers a look at the investment habits of the wealthy, noting that they tend not to “sit” on their money, but keep it mostly invested.

As well, their focus is on “a year-over-year increase in net worth,” so “they don’t waste a considerable amount of time on the details.” They “live below their means,” avoid debt and paying interest, and are very aware of their income and expenses.

We once read a quote from Mark Cuban, well-known U.S. entrepreneur, who said that once you begin investing, try not to dip into that money – let it grow. It is certainly interesting to take a short look at how the richer half invests!

Members of the Saskatchewan Pension Plan don’t have to sweat out an investment strategy for their savings. SPP’s asset mix is currently 10 per cent Canadian equities, 16 per cent U.S. equities, 15 per cent non-North American equities, 11 per cent real estate, 18 per cent infrastructure, 13 per cent bonds, six per cent mortgages, and 10 per cent private debt, with the balance (small) in short-term investments. SPP isn’t sitting on its cash – it’s carefully growing its members’ contributions to help fund their future retirements!

Check out SPP today!

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We read all the time about “active” and “passive” management of investments. While it sounds like one type is for those that jog and work out, and the other is for people comfy on their couches, the actual meaning is a little different. Save with SPP had a look around to find a good explainer or two.

Writing for Bankrate via AOL, Dr. James Royal writes that “active investing is what you often see in films and TV shows. It involves an analyst or trader identifying an undervalued stock, purchasing it and riding it to wealth.”

“It’s true – there’s a lot of glamour in finding the undervalued needles in a haystack of stocks. But it involves analysis and insight, knowledge of the market and a lot of work, especially if you’re a short-term trader,” he continues.

On the other hand, he notes, “passive investing is all about taking a long-term buy-and-hold approach, typically by buying an index fund. Passive investing using an index fund avoids the analysis of individual stocks and trading in and out of the market. The goal of these passive investors is to get the index’s return, rather than trying to outpace the index.”

So the Coles Notes on this are as follows – an active management approach involves you (or an advisor) actually picking investments that you think will beat the market’s returns. Passive means you aim to duplicate the market’s returns, usually by buying index funds that consist (unsurprisingly) of all the funds on the various index.

So, is one approach better than the other?

A recent New York Times article suggests that over time, the passive approach tends to work out the best.

“Over the last 20 years, stock pickers have had a dismal record. Most haven’t come close to beating the overall stock market,” writes Jeff Sommer.

“But occasionally, there are exceptions. In some periods, stock pickers rule, and the start of this year was one of those times. In fact, it was the best January for actively managed stock mutual funds since Bank of America began compiling data in 1991. It wasn’t just that they turned in handsome returns for investors. The entire stock market did that. The S&P 500 and other stock indexes set records during the month,” he notes.

The article goes on to say that stock pickers seem to do best when markets are doing the worst – such as the 2008/9 credit crisis. Passive investing does well at most other times, he points out.

A Forbes article on the topic makes the point that active investing requires much more of an effort.

“You can do active investing yourself, or you can outsource it to professionals through actively managed mutual funds and exchanged traded funds (ETFs),” the article notes. However, the article notes, you need to be watching your holdings all the time.

“Without that constant attention, it’s easy for even the most meticulously designed actively managed portfolio to fall prey to volatile market fluctuations and rack up short-term losses that may impact long-term goals,” Forbes reports. “This is why active investing is not recommended to most investors, particularly when it comes to their long-term retirement savings.”

On the contrary, “because it’s a set-it-and-forget-it approach that only aims to match market performance, passive investing doesn’t require daily attention. Especially where funds are concerned, this leads to fewer transactions and drastically lower fees. That’s why it’s a favorite of financial advisors for retirement savings and other investment goals.”

No one likes to talk about investments unless they are winning. It’s like bingo – you hear when your friends win the big jackpot, but otherwise, you don’t. We have heard horror stories from friends who went for the home run with things like Bre-X, or Nortel, or cannabis stocks, and of late, bitcoin.

Whatever approach you personally choose for your own investments, we recommend that you seek the advice of a professional investor. The portfolio you construct on your own may be fine, but will almost always benefit from the oversight of a pro.

If you’re a member of the Saskatchewan Pension Plan, you are already benefitting from professional investment advice. The SPP balanced fund returned 7.73 per cent, on average, since its inception more than 35 years ago. While past returns are of course no guarantee of future rates of return – no one can predict the future – it’s nice knowing that SPP’s investing history has been so positive. Check out SPP today!

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For the first time in 70 years, there’s a new monarch on the back of our nickels, dimes, quarters, loonies and toonies.

And that change recalls an age-old question – is it better to use cash or credit, generally? Save with SPP took a look around for some answers.

According to figures from the Bank of Canada, this country has seen a gradual move away from cash spending. Cash accounted for 54 per cent of transactions as recently as 2009, the bank reports, but by 2013 that figure had dropped to 44 per cent. It slid to just 33 per cent in 2017.

Interestingly, the value of cash transactions also declined in the same period – in 2009, the bank notes, 23 per “of the total value of goods and services purchased” was in cash. By 2017, this number had fallen to 15 per cent. And we’ll recall cash use fell even more during the pandemic.

Is cash dead?

“So, does this mean that Canadians are giving up on cash? The short answer is no. Canadians still rate cash as easy to use, low in cost, secure and nearly universally accepted, and it’s the preferred payment option for small-value purchases like a cup of coffee or a muffin,” the bank notes.

“In fact, the lower the value, the more likely it is the buyer will choose cash,” the article adds.

An article in MoneySense from a while back highlights how using cash may make us more conscious of our spending than using credit or debit cards.

“Is it harder to part with cash than to slide your credit card through the machine? Would a $200 pair of shoes give you pause to think if you paid for them in cash more so than if charged your credit card? You betcha,” the article notes.

The article cites two U.S. studies on the topic. A Journal of Experimental Psychology article reports on a study, MoneySense notes, that concluded “shopping with cash discourages spending, while using credit or gift cards actually encourages it.” Why?

The authors of the study, reports MoneySense, found that “using a less transparent form of payment such as a credit card or a gift card lowers the vividness with which one feels that one is parting with real money, thereby encouraging spending.”

Interesting – spending with physical cash is seen as more “conscious” spending, then.

A Forbes article also weighs in on the topic.

The article makes the point that your own financial habits should dictate when you use cash, or not.

“If you are carrying a large credit balance or struggling to stay on top of payments, sticking to cash whenever possible may help you pay down debt,” the article notes.

“Many people use credit cards regularly and rarely carry a balance. If you stay on top of your payments and pay your card in full, a credit card is probably a great option for you,” Forbes reports.

Credit cards, the article notes, “provide a unique level of security against fraud and loss. In Canada, if your card is issued by a bank and unauthorized purchases are made on your card, the maximum amount you can be responsible for is $50 (unless you demonstrated gross negligence in safeguarding your card, its information and other info like your PIN or password).”

Similar protections apply to debt cards, the article reports.

Cards feature things like purchase protection and insurance, anti-fraud detection, a grace period and “rewards, cash back and bonuses” that you just don’t get with cash, the article adds.

“While creditors are hoping you will carry a balance, rewards points can be an excellent way to earn while you shop, especially if you don’t carry a balance. Some credit cards offer three to six per cent back on selected categories. Other cards may offer one per cent or more back on all purchases,” the article adds.

However, reports Forbes, cash has its advantages as well, particularly if you have balances on credit cards or lines of credit. “Debt is a major problem for Canadians. As of December 2022, the average debt in Canada was $21,183 (excluding mortgage debt), according to a report from Equifax,” the article notes.

“By paying for purchases with cash, you avoid interest charges on those new purchases,” as well as even higher interest on a higher balance, the magazine adds.

The Motley Fool lists off a few more advantages of cash. Cash is “universally accepted,” and by using cash you can avoid transaction fees common with credit and debit cards.

It is easier to budget using cash, the article continues. “Paying only in cash means that once the cash is gone, that’s it – you’re done spending,” The Motley Fool tells us. “This strict limitation can help you curb overspending, aligning your purchases more closely with your budget.”

A disadvantage of cash is that if it gets lost or stolen, you are out of luck – there is no theft protection or insurance built into it.

The Motley Fool article also makes the point that while you can earn cash back, rewards points and other perks with credit cards, it is easy to abuse them, and “spend more than you can reasonably afford.” And if you don’t pay the full credit card balance each month, you are looking at interest rates of 20 to 30 per cent, the article concludes.

Noted financier Mark Cuban once observed that when you pay with cash, you can often negotiate a better price. If something costs $200, and you say you only have $175 cash, maybe you will get a deal, he has said.

It sounds, from reading all this, like there is no single answer on which is best, cash or credit. The experts seem to be saying it depends on your personal relationship with money. If you pay all your bills on time, especially credit cards and lines of credit, then maybe credit use is OK for you. If not, cash is a way to keep your debt from getting even bigger.

We already know that the Saskatchewan Pension Plan is a great do-it-yourself retirement savings program for Canadians. Any Canuck with available registered retirement savings plan room can open an account, and can let SPP’s experts invest their savings in a professionally managed, low-cost fund. But what’s new is that now, any Canadian SPP member has the choice, at retirement, between a lifetime annuity or the flexible Variable Benefit option.

Check out SPP today!

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A “Goldilocks” approach to retirement focuses on guaranteed sources of income

Writing in Forbes, Steve Vernon notes that annuities can be a way to find a “just right,” or Goldilocks solution to making sure you don’t run out of money in retirement.

Those living off lump-sum savings (the article is intended for a U.S. audience, so here it might mean money in a registered retirement income fund (RRIF) or similar capital accumulation vehicle) “to pay for their living expenses face a serious challenge,” he writes. “How do they carefully invest and draw down their retirement savings to spend on living expenses, with the goal that they don’t outlive their money and recognizing that they might live a long time?”

If you are gradually drawing down income from a lump sum account, he writes, there is “a dilemma: spend too much, and you might run out of money in your 80s or 90s. But if you’re overly cautious with your spending, then you might not spend as much as you could have,” and won’t know that until you “finish your retirement.”

It’s the fear of running out of money in retirement that makes some retirees really watch their spending. Those on the “spend too little list,” he writes, “want to prevent being broke in their later years. While that might be financially prudent, it’s unfortunate that they aren’t enjoying retirement as much as they could.”

And here’s where the “Goldilocks” strategy enters.

You need, he explains, to “build a portfolio of monthly retirement paycheques that are designed to last the rest of your life, no matter how long you live.” As long as you spend less than that amount, “you can feel confident that you won’t outlive your money.”

So what does this guaranteed income portfolio consist of? Here in Canada, it would include your Canada Pension Plan (CPP) and Old Age Security (OAS) benefits, which are paid for life and are inflation-protected. Some of us also get the Guaranteed Income Supplement (GIS).

The article says other “guaranteed” sources of retirement income could be money from a workplace pension, “income annuities,” and also “payments from a reverse mortgage.”

Vernon says that if you add up all the “guaranteed money,” and get an income total, “then you’ll have a target for managing your living expenses.” The bigger the gap between your income and your expenses, the more prepared you will be for “the surprises that are inevitable over the course of a long retirement.”

If the math doesn’t work in your favour, and your guaranteed income is going to be less than your expenses, there are options out there for upping your income, Vernon adds:

• Downsizing: As housing is typically the most expensive cost for retirees, downsizing is “win-win” in that you reduce your housing costs while “finding a home that might better suit your needs in retirement,” he writes.
• Transportation: Vernon notes that it is cheaper to run one vehicle than two in retirement. Relying on public transportation and “not purchasing a new car until it’s absolutely necessary” can also dramatically cut your costs.
• Shared expenses: “Look for ways to share significant expenses with close family and friends, such as carpooling, buying food in bulk to divvy up, and even (sharing) housing,” he writes.
• Working part time: “Working part time in your 60s and 70s can really help pad your income, particularly if you have a small margin between your total retirement income and your living expenses,” he notes.

Vernon concludes by noting there is never a bad time to calculate (and adjust) your living expenses to align with your income, even if you are already retired.

Converting some or all of your registered retirement savings plan savings into a lifetime annuity has long been an option for Canadians, with the main alternative being to continue to invest your money within a RRIF. Similar options are available to Saskatchewan Pension Plan members.

Annuities sort of became less popular when interest rates were low, because the lower the interest rate, the higher the cost of the annuity. But in this higher interest rate environment, annuities are worth thinking about. A great SPP feature is that you can choose to convert some or all of your savings into an annuity within the plan – you don’t have to transfer money over to a third party to get the annuity.

Great news! SPP’s flexible Variable Benefit option is no longer limited to those members living within the borders of Saskatchewan. Now all retiring SPP members across the country can take advantage of this provision, which puts you in control of how much income you want to withdraw, and when you want to withdraw it. You can also transfer in additional savings from other unlocked registered sources. For full details see SaskPension.com.

Check out SPP today!

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As our two Shelties (Duncan and Phoebe) pulled us around the neighbourhood the other day, we came upon a small group of younger folks — parents of school aged kids — enjoying a sunny late spring afternoon.

After some friendly chatting, talk turned to retirement. “You two are both retired now — what’s it like?”

After thinking a bit, our reply was this — “being retired is like every day is a Sunday.” It is not like every day is a vacation day — who could afford that — so it is more like the weekend, we explained. They liked that.

So Save with SPP decided to do a quick search for other peoples’ takes — ideally a short sentence — on what retirement is like.

We started by asking our new AI chat thingie what it thought retirement is like — in one sentence.

“Retirement is the time of life when one chooses to leave the workforce behind and live on savings, passive income, or benefits,” the AI doodad replied. OK, good, but we were thinking more of what it is like rather than what is literally is.

At the AAG website, a writer had a similar view to our own. When you are retired, the article notes, “now Fridays aren’t the best day of the week any more — they all are!”

A fairly recent article from Forbes didn’t boil it down to one sentence, but said these ten words are the ones most often used to describe retirement — “relax, happy, travel, retirement (of course), family, fun, success, freedom, money and fulfilled.”  This may not be an actual sentence but it captures a lot of what it’s like.

“Retirement is not the end of the road. It is the beginning of the open highway.” This two-sentence statement, original author unknown, was posted on the Southern Living website.

“We work all our lives so we can retire so we can do what we want with our time and the way we define or spend our time defines who we are and what we value,” states Bruce Linton. His quote is featured on the Goalcast website.

On the Goodreads website writer Charles Baxter describes retirement as being “gainfully unemployed; very proud of it too.” We like this one.

“Retirement is the best gift. No gold watch or plaque could ever top it,” state the folks at the Chapparal Winds Retirement Community website.

If there’s a common thread to all this, it’s that retirement means that your time is now yours, and it is up to you to decide what you’ll do with the time.

We saw that “money” was mentioned by Forbes magazine, and it’s true that money is part of it. The more you have when you retire, the more options you’ll have for your free time. So if you haven’t started saving for retirement — and maybe don’t have a pension or retirement savings plan through work — you ought to think about the Saskatchewan Pension Plan.

Any Canadian with registered retirement savings plan room can join. You can contribute as much as you want to each year (up to your personal RRSP room limit), and if you want to consolidate savings from other RRSPs into SPP, you can transfer any amount in. It’s how SPP makes your savings options limitless. Check out SPP today!

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Saving for retirement sounds like building wealth, but there’s a twist. After the saving is done, you’ll be wanting to convert that piggy bank into income for your golden years.

Do you bet it all on black, or is there a more sensible approach to investing for retirement? Save with SPP scouted the Interweb for some thoughts on the principles behind retirement investing.

Forbes magazine suggests retirement investors should take advantage of “tax advantaged accounts” available to them. In Canada, this would be things like a registered retirement savings plan (RRSP) or tax free savings account (TFSA).

The article suggests an “asset allocation” approach makes sense for retirement investing, with a portion of your investments targeting growth, through exposure to equities (stocks), and the rest to income, via fixed income investments, such as bonds.

You can either buy stocks and bonds directly, or via exchange-traded funds (ETFs) or mutual funds, the article adds.

Forbes believes that your age should help dictate the portion of your holdings that is in equities versus that in fixed income. In your 20s, the article notes, you should invest “90 to 100 per cent” in equities. By your 50s, you should be around 65 per cent equities and 35 per cent bonds, and once over 70, “30 to 50 per cent in stocks, 40 to 60 per cent bonds,” with the rest in cash.

At The Motley Fool Canada, dividend stocks are seen as one of the best investments in a retirement portfolio.

“You pay lower income taxes on dividend income from dividend stocks than your job’s income, interest income, and foreign income. Therefore, it is one of the best incomes to build up and grow as soon as you can. This low-taxed income will benefit you through retirement,” writes The Motley Fool’s Kay Ng.

She also notes that even if you have paid off your mortgage when you retire, you are still going to need income “to pay for home insurance, property taxes, and potentially utilities, condo, or home repair fees during retirement.”

Her article suggests real estate income trusts (REITs) are an investment well suited for your retirement portfolio. Owning REITs, she explains, is like owning shares in a property that is being rented out — you’ll get regular monthly income (like rent) and the value of the properties held by the REIT tend to go up over the long term.

The folks at MoneySense note the RRSP, now more than six decades old, is still a “go-to” for Canadian retirement investors.

The article begins by noting that the RRSP allows investments to grow on a “tax deferred basis,” meaning no taxes are owed until you take the money out in retirement. The Saskatchewan Pension Plan (SPP) operates very similarly, for tax purposes.

MoneySense agrees with the idea that Canadian dividend stocks make sense in your retirement investment portfolio, as they are taxed at a lower rate than foreign stocks in a non-registered account and aren’t taxed in a registered account.

Since the end game of retirement investing is converting savings to income, MoneySense notes the annuity — “which pays a fixed income for life” — is a good idea for some or all of your savings once you have retired.

So, let’s recap. You want to build your retirement portfolio with a mixture of dividend-producing stocks, and interest-producing (and lower risk) fixed-income investments. Real estate income is seen as beneficial both before and after retirement. When retirement begins, these sources will provide regular income, and if you want to guarantee the level of income, you can convert some or all of your holdings to an annuity.

If you’re hesitant about wading into this somewhat complex topic, another way to go is to join the SPP. SPP’s Balanced Fund is invested in Canadian, U.S. and international equities, but also bonds, mortgages, real estate, infrastructure and money market funds. The savings of SPP members are invested, at a very low cost, in a large pooled fund. And when it’s time to collect your SPP benefit, you can choose from a variety of annuity options for some or all of your account. Check out SPP today!

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