Tips provide ways you can have a happy and financially secure retirement

What sorts of things do we need to think about to have a happy retirement – fun and financially secure?

Save with SPP decided to take a look around the Web to see what sort of retirement tips there are for those of us who are still working away.

The Wellington Advertiser in Ontario offers up several tips.

First, the newspaper suggests, you need to “get your finances in order.” As you prepare to retire you need to “plan out your finances ahead of time… people heading towards retirement should look into paying off any outstanding debts, and organizing their money, so they know what to expect come retirement and how much they will be living on.”

The Advertiser’s second tip is to “take it slow.”

“Going from working full time to not working at all can be a harsh adjustment for some, slowly working into retirement is a great way to smooth out the transition. Those heading towards retirement should consider easing off their workload over the course of several years or months,” the newspaper notes.

The article’s other tips include being active, and “getting out” as well. “It’s important to stay mentally active as well, volunteering, clubs, committees and community events are all great ways to stay connected in the community.” That involvement can ease any feelings of loneliness you may have post-work, the article concludes.

The Kiplinger website offers up a few more ideas.

“Happy retirees find a clear sense of purpose,” the site explains. Sometimes, the article continues, golf, strolling the beach and reading don’t provide enough “purpose or meaning.” Many retirees go back to the workforce, not only for the money but for the social connections and sense of purpose, the article adds. Others like to volunteer, which “keeps the brain healthy and active” and prevents “loneliness and isolation.”

The article notes that happier retirees “never stop learning.”

“Experts believe that ongoing education and learning new things can help keep you mentally sharp. Plus, exercising your brain may help prevent cognitive decline and reduce the risk of dementia,” the article reports.

Finally, the folks at Kiplinger extoll the virtues of having a “furry friend” in retirement.

“It turns out that Fido can provide more benefits to you than grabbing the newspaper. Older dog owners who walked their dogs at least once a day got 20 per cent more physical activity than people without dogs, and spent 30 fewer minutes a day being sedentary, on average, according to a study published in The Journal of Epidemiology and Community Health. Research has also indicated that dogs help soothe those suffering from cognitive decline, and the physical and mental health benefits of owning a dog can boost the longevity of the owner.

At Forbes Advisor, the importance of having money in retirement is raised.

“Strive to save 10 per cent (or more) of your gross income in a tax-advantaged retirement account,” the article suggests. In Canada, this would include things like a registered retirement savings plan, a company pension plan, a Tax Free Savings Account, and so on.

The article also suggests you “spend smarter” in retirement. Huh?

“Cost and value are not the same thing. For example, if two couples took the same trip of a lifetime, stayed in the same level hotel, and booked the same class of airfare, it would be fair to say that they got the same value from the trip. But if one couple paid full price and the other couple booked at a discounted rate, like my mom always does when she travels, there would be an obvious difference between the cost for each couple. I will give my mom credit; she is the queen of stretching a dollar,” author David Rae writes.

So let’s recap. You’ll want to plan ahead for retirement and set up a budget to handle the fact you will probably be living on less income. The more you save before retirement, the closer your post-work income will be to what you are making now.

Ease into retirement, rather than jumping headlong. Stay active, get out and do things with new people. Have a sense of purpose – maybe volunteer or join a group. Keep learning. Spend smart.

If you don’t have a retirement program through work, a great resource that may be of interest is the Saskatchewan Pension Plan. Join the more than 30,000 Canadians who are members of this voluntary defined contribution pension plan that not only helps you save but can help turn those savings into retirement income.

Check out SPP today!

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For many of us, inflation is an unwelcome guest from a long time ago who has made a sudden reappearance. For the younger among us, it’s a weird new thing.

How do we cope with a reality that has prices for things like groceries soaring? Save with SPP took a look around for some top tips on slaying the beast of inflation.

The folks at Ratehub.ca describe “two common categories of inflation” as being “cost-push inflation” and “demand-pull” inflation.

Cost-push inflation, the blog reports, “happens when production costs rise (wages, raw materials, transportation, etc.) but demand doesn’t.” The higher cost of producing items inflates their cost, the blog explains.

Demand-pull inflation, Ratehub explains, “is the result of higher consumer demand for certain goods.” Popular items become harder to find, supplies shrink, and companies “start charging more.”

Terrific. But what can we do about it?

Among the tips offered up by Ratehub are:

• Putting off big expenses – if you can, Ratehub suggests, put off costly home renos or big-ticket purchases like new cars.
• Save on groceries – buy in bulk, the blog suggests; take advantage of grocery store points programs, and plan more vegetarian meals given the high price of meat
• Pay off debt – “Brainstorm some ways in which you can free up money… by cutting back, then use the extra cash you saved to begin paying off your debt.”

Global News suggests a few more ideas:

• Spend less on dining out, entertainment – A recent poll, the broadcaster reports, found that 54 per cent of those polled (in 2022) were “dining out less.” As well, Global notes, 46 per cent said they were “cutting back on entertainment spending.”
• “Spring clean” your budget – Myron Genyk of Evermore Capital tells Global News that people should be “taking a look at credit card statements (for) recurring charges that might not be worth the monthly fee, such as a streaming subscription that is not being watched.” Cutting these “passive” charges may be easier than “overhauling one’s lifestyle” to make spending cuts, she tells Global.
• Consider the impact of higher interest rates on savings, expenses – Interest rates, reports Global, haven’t been this high for a generation. For savers, now may be a good time to consider a Guaranteed Investment Certificate (GIC), but the article warns that even GICs may not keep pace with inflation if it continues to increase. For those with mortgages, Genyk suggests they consider a longer amortization period. “While they might end up owing more on their mortgage by extending the life of the loan, it might be worth it to offset the temporary inflationary pressures on their monthly budget,” the article suggests.

Forbes Advisor has some additional thoughts on the subject.

• Speed up debt repayment – With interest rates on debt rising, a bad thing is getting worse, Forbes reports. The article quotes Doug Hoyes of Hoyes Michalos as saying “if you are spending more money on food, rent, and gas for your car, that leaves less money to service your debt.” His first tip for surviving inflation is “to tack consumer debt as quickly as possible to avoid the snowball effect of debt overwhelming your finances.”
• Use cash-back credit cards – Vanessa Bowen of Mint Worthy tells Forbes that using a cash-back credit card “on essential expenses like gas and groceries can be a simple way to put money back in your pocket.”
• Avoid volatile investments – When investing, watch out for companies carrying a lot of debt. Nesbitt Burns’ John Sacke tells Forbes “you want to buy stocks in companies that are likely—and I use that word ‘likely’ very carefully—to perform better than other companies in a rising rate environment.”

The folks at Sun Life Financial finish us off with some classic inflation-beating advice.

• Cook at home – “Cooking at home is cost effective,” especially when compared to the cost of dining out or ordering in, the article advises. Think of the $6 latte you like – on a daily basis, it is costing you $2,190 per year! Much cheaper, the article notes, to make your own coffee at home.
• Buy used, or borrow – “Consider buying second-hand items – you can sometimes find great deals at a fraction of the original price. Books, toys, sports equipment, furniture, clothing and accessories … you can find it all on platforms like Facebook Marketplace and Kijiji,” the article suggests. You may also be able to borrow or rent things like speciality tools for a home improvement job, rather than laying out money to own them, the article suggests.
• Travel during off-peak times – The article suggests being “smart” about travel, and to “take advantage of the off-season. You’ll likely have a cheaper and more relaxed holiday.”

Some of our friends have started doing challenges related to health and weight loss; maybe some of these ideas would make good challenges – going a week, or a month, without dining out or ordering in would save a pile of cash, for example. Creativity is always good when it comes to saving money, we wish you the best of luck in your own challenges.

When you are able to generate some extra savings, don’t forget about the future. If you are saving on your own for retirement, a wonderful and willing partner is out there for you – the Saskatchewan Pension Plan. SPP members have their savings pooled in a low-fee, professionally managed fund. Those savings grow over time, and when it’s time to collect, SPP members have choices, such as a lifetime monthly annuity payment or the flexibility of our Variable Benefit. Check out SPP today!

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Ah, spring. Time to drag the golf clubs back up to the garage, to pump up the bike tires, and start getting the garden going. And, for many of us, time to get a nice tax refund cheque (or, more likely, a refund deposit).

Save with SPP wondered what people do with the refunds. Let’s take a look around and find out!

According to Fiona Campbell, writing for Forbes Advisor, tax refunds “are a sweet perk of filing your income tax return – and the good news is that most Canadians get one.” In fact, she notes, 58 per cent of filers got a refund in 2021, and the refund averaged just over $2,000.

This year, the average refund is more like $2,100 and change, she continues.

Campbell’s ideas on how to spend the refund don’t include “concert tickets, vacations, or designer clothes,” but are intended to “put you ahead financially in the long run and give you peace of mind instead.”

First (no surprise) is paying down debt. “If you carry a credit card balance, or only make the minimum payments, you’ll end up paying interest each month—and with APRs averaging 21 per cent, that can add up quickly,” she warns. The average Canadian owes more than $4,000 in credit card debt, she adds. If you don’t have credit card debt, you may have other loans or credit lines that can use a hand, she continues.

Next comes the mortgage. Campbell suggests making a prepayment on your mortgage, either as a lump sum or as an extra amount each payment. “If you don’t have other outstanding debt with higher interest rates, prepaying your mortgage can be a smart way to use your tax refund as it goes directly to the principal portion of your loan,” she notes.

Other ideas from Forbes Advisor include topping up your registered retirement savings plan (RRSP) or Tax Free Savings Account (TFSA), starting or adding to your emergency fund, or saving for a child’s education via a registered education savings plan (RESP).

The folks at the Nerd Wallet blog have a few more ideas.

“A tax return can be a great way to fund home repairs and upgrades. Maybe you have a big project to tackle, such as redoing a bathroom or renovating your kitchen. Spending your money on home upgrades is an investment that could shrink your home insurance bill and add value to your property in a way that pays off handsomely when it comes time to sell,” the blog advises.

Another idea, the blog continues, is to “invest in yourself.”

“While tackling debt, saving for the future and improving your home are all worthwhile uses for your tax-season windfall, don’t forget that you are also a smart investment. Maybe you’d like to start a side hustle, treat yourself to a monthly massage, or complete a professional certification. Though they might not earn compound interest, these types of investments can yield a sense of wellbeing and set you up for future success in a way that’s truly priceless,” the blog suggests.

Global News covers many of the same ideas, concluding that it really boils down to either paying down debt or adding to savings (or both).

The broadcaster suggests targeting credit card debt first.

“Credit card debt, which typically carries high interest rates at upwards of 20 per cent, can be particularly damaging to Canadians’ finances and “snowball” out of control, states financial author Sandy Yong in the article.

However, Yong says, even though saving and paying off debt are seen as the most sensible things to do with a refund, having a little fun is never out of the question. There’s no reason, she tells Global, to “feel bad about spending it on something for yourself.”

If you’re planning to use some or all of your tax return on your retirement savings, why not consider the Saskatchewan Pension Plan. SPP works just like an RRSP – the contributions you make are tax-deductible, which may help you get a refund down the road. And, way further down that road, the contributions you make to SPP – having been professionally invested, at a low fee, in a pooled fund – will grow into a future income stream for the retired you. A gift that keeps giving, as they say.

Check out SPP today!

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For many of us, retirement savings is something that — if we think about it at all — we worry about chiefly right ahead of the registered retirement savings plan deadline in March.

But there’s a school of thought that suggests automating your savings, rather than scraping up a lump sum at the last possible minute, is the way to go. Save with SPP took a look at what others are saying about this important topic.

At the Young and the Invested blog, automated savings is defined as “savings that happen passively — that is, without you having to do something every time you save.”

Through automated saving, the blog continues, “a predetermined sum of money is automatically transferred into a savings account or similar financial vehicle.” This happens on a recurring cycle, the article adds, typically “monthly, or every paycheque.”

So — how to do this? The article suggests that if all of your pay is deposited in your chequing account, you can set up — via online banking or a banking app — a regular transfer of some of that money to your savings account.

An article in Forbes Advisor continues that thinking, and advises that you make sure the savings account you choose offers high interest.

“To maximize your savings, choose one of the best high-interest savings accounts, which offer rates that are 10 times higher than the national average. Consider switching banks if your current account doesn’t pay much interest. Online banks often have the most attractive interest rates,” the article notes.

Another idea in the Forbes piece is the concept of boosting savings when you are cutting expenses. Say what, now?

“If you decide to make some cuts to your monthly spending, it’s important that you actually follow through with putting that extra money in savings. You can do this by increasing automatic transfers to your savings by the amount you plan to cut from your spending,” the article explains.

Now we get it. If you cut back on cable or a streaming app or two, don’t just spend that “saved” money — boost the amount you are transferring each month into savings.

The article also reminds us that when we get a raise, our monthly savings should get a raise too.

The U.S. articles mention the idea of using apps that “round up” spending, directing a portion of what you are buying into savings.

One such app, reports the Money Reverie blog, is called Moka (formerly Mylo).

The Moka app, reports the blog, connects to your savings account, and then does a little rounding up.

“For example, if you buy a cup of coffee for $3.25 with your credit card. The Moka app rounds up your purchase to $4.00 and saves the extra $0.75 in your Moka account. If you order that coffee everyday for one year, that’s $273.75 you have saved up. Your money would be automatically transferred from your chosen funding account to your Moka account,” the article explains.

We’re sure there are many other such “fintech” apps to choose from, but the idea of “rounding up” to save seems to be a good one.

If you’re a member of the Saskatchewan Pension Plan you can automate your savings in one of two ways. You can set up pre-authorized contributions to SPP from your bank account, or you can set up SPP as a “bill” via your online banking app and make automated bill payments to your future you. Automating savings means setting it and forgetting it — you can let SPP invest your savings for your future. Check out SPP today!

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Years ago, when we were working away at Lakehead Living in Thunder Bay, Ont., a colleague asked us if we were contributing to a registered retirement savings plan (RRSP).

“What’s that?” we asked. And once it was explained that you would get a tax refund for contributions made to an RRSP, the 25-year-old us was in – starting off at $25 per month.

What’s the best retirement savings tip out there? Save with SPP decided to have a look.

Start saving today, advises the Merrill division of Bank of America. “Start saving as much as you can now and let compound interest — the ability of your assets to generate earnings, which are reinvested to generate their own earnings — have an opportunity to work in your favour,” the bank advises.

At the InvestedWallet blog there are two tips of note – to “fund your retirement account with side hustles,” and to “ditch the lavish vacations.”

Using “side hustles,” such as “flipping furniture, using a 3D printer to make money, or completing freelance gigs” is a great way to boost savings – direct your profits there, rather than to buying furniture or taking trips, the blog advises. And on big annual trips, Invested Wallet suggests cutting back on “destination” vacations (the average vacation in the U.S. costs $1,145 per year) and instead, doing something affordable during time off and putting the saved cash into retirement.

The Forbes Advisor offers up a couple of good tips – get rid of your debt now, and not after you are retired, and “practice retirement spending now.” The first one needs no further explanation – debt is harder to pay off when you are living on less.

The “practice” tip is intriguing. Basically, the article suggests that most retirees will live on 80 per cent of what they were earning before retiring. We had a friend who was fearful about living with her first mortgage. So her husband said look, let’s bank the difference between our rent and the mortgage in the run-up to buying the house, and live on the reduced income. This idea worked, her fears were abated and by now we’re sure that house is paid for.

At Sun Life, a variety of tips are included, with a sound bit of advice being “take full advantage of your employee pension plan.” A lot of times, the company pension plan may be optional. You don’t have to join. But if you don’t, you are missing out on putting away money for retirement, often with an employer match.

If you are in a defined benefit pension plan, be sure to find out if there are ways to purchase service for periods of time when you were off on a maternity or parental leave. Your future you will thank you later.

We’ll add a few others we have gleaned over the years.

Make your saving automatic – contribute something towards your retirement every payday, and up it when you get a raise. You will be paying yourself first.

A nice place to put your Canada Revenue Agency tax refund is back into your SPP or RRSP account. You’re making the refund tax-deductible.

Start small. We started with $25 a month nearly 40 years ago. Don’t think you have to start off big, or you may never start off at all!

If you haven’t started saving yet, a wonderful resource to be aware of is the Saskatchewan Pension Plan. It’s open to any Canadian with RRSP room. With SPP, you can contribute any amount you want, up to $7,000 per year, and can transfer up to $10,000 a year from other RRSPs. SPP will pool your contributions, invest them at a low cost, and grow them into a future source of retirement income. Check out SPP today!

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