Shifting sands of retirement and women

Retirement planning is all the more important for women since they live longer than men. And for partnered women, “The average age of widowhood is 56 in Canada,” says Marlena Paspiech, senior manager with the BMO Retirement Institute. And with 40% of marriages not lasting more than 30 years, women must be financially prepared.

Women tend to accumulate smaller retirement funds due to two main factors, adds Paspiech. Studies show women earn 83 cents for every dollar a man earns. Also, “women tend to interrupt their employment to accommodate roles as family caregivers.” This means, on average, women work fewer hours, reducing potential pension benefits.

Another issue is that, “Women have said their opinions on financial matters aren’t taken as seriously as those of men and the industry isn’t doing a good job of serving their investment needs,” says Paspiech

Plan providers have been broadening the scope of the educational tools available to in hopes of encouraging them to be more mindful of the state of their pensions. Those tools range from literature about the funds available to assessment of risk aversion via call centre representatives to one-on-one meetings with licensed advisors.

Sara Hakim, associate partner at human capital consulting and outsourcing company Aon Hewitt, says that while advice services are being made available by plan providers for a set fee, few plan sponsors are opting to make it available to plan members.

Current pension regulations only loosely define the fiduciary responsibilities of plan sponsors with respect to the resources they must provide plan members to help them manage their pension investments.

Non-binding guidelines set out by the Canadian Association of Pension Supervisory Authorities (CAPSA) say employers have to offer plan members investment choices with varying degrees of risk and return so that a reasonable person could create a portfolio that meets their needs. However, employers who offer information that borders on specific investment advice could later be liable if that advice turns out to be poor.

Terra Klinck, partner at law firm Hicks Morley, says some plan sponsors are choosing to offer plan members a stipend to use toward third-party, fee-based advisors to indemnify themselves against potential litigation in the future, but more needs to be done.

Stormy Weather

I have been watching with interest the impact of the storm on the American East Coast and my heart goes out to all my American friends who are in harms way.

This round of Stormy Weather shows that most people have some common sense but I am alarmed at the news coverage. The TV news reporters who go out into the storm to get the best live shot, should have their heads examined. The story can be told, I think, without putting oneself in harms way. 

I have also been impressed by the American governments (all levels) who have spoken honestly to the people about the danger and about how to keep themselves safe. I hope is that all of you on the East Coast are kept out of harms way in the aftermath of the storm, and that you and your loved ones are safe.

For my Canadian friends in Ontario and the Maritime's, I hope that you are also kept out of harms way and that the storm does not wreck as much havoc it might.

In the aftermath of the storm, my hope is that friends, families and loved ones are safe and that life will begin to slowly return to a routine that is safer for all of you. The storm highlights I think, how much we are dependent on each other and how isolated we feel when we are cut off. The storm also shows us how much we need the infrastructure and why we need to  work to keep it up to date. I was also impressed with how prepared  the first responders in both countries  were when faced with dangerous situations.

Mike Law shared the following  description of the storm, which I thought was worth sharing:

The eye of the hurricane passed directly over us, when the eye passes all becomes calm. On the horizon in all directions one can see the eyewall of the Hurricane illuminated by flashes of lightning shimmering flashes of heat lightning as if this was a hot summer night with each flash of light, all is soft and distant and never strikes a blow of destruction.

The eyewall appears to be a steel curtain, dull gray as is steel, momentarily the wall appears and by its reflections of silver light from a flash lamp cosmic and high. In the calm you think maybe you woke up in a dream, but do not dream too long, because soon there will be a taste of new rage.

With a million people without electricity it is dark and it is cold, but mercifully it could have been much worse for us. In the mountains of Virginia, West Virginia and central Pennsylvania, some were nearly a meter of snow from thunder snowstorms in collision of a mass of hot tropical and humid air becomes shipwrecked in south of the arctic winter storm born in northern Canada. We had the chance ... a chance to be lucky.Winter is not yet on us, but in parts of the US and Canada, Sandy brought not only rain and high winds, but snow, sleet, and hail. For those of us who love winter--but not the storms of winter, here is a beautiful poem by Mike Law with a stunning image by Lisa Tyson Ennis  (taken in 2005) to remind us that there is hope and life even in the face of personal or community disaster.

In winter, A Solitary Place

On ghosting leafless trees upright their feet bare
covered with snow, each arm is sheathed solemnly in ice.
Freezing cold ...
Not a bird, not a squirrel, no movement,
Everything is frozen and silent.
This is not the brittle crunch of snow.
No footprints show my way when taken.
I stop, I'm paralyzed ... I can not
see my breath.
Momentarily confused I paused to reflect.
Of course, I understand, it's the fog.
Am I the fog? It seems so ...
enveloping all,
It steals my breath as in death.
The fog surrounds me...
a kiss ...
relax ...
I tremble, I tremble.
A lonely place on a dark
winter day.
I move in silence as if invisible as
the fog closes the door behind me.

March 2012 - mike law

Caring for someone with Alzheimer’s

The following is from Beth Kallmyer, Vice President, Constituent Services Alzheimer’s Association

Caring for someone with Alzheimer’s disease can be lonely and overwhelming. To help, the Alzheimer’s Association created ALZConnected, the first dedicated online social networking community where people with Alzheimer’s, their caregivers and others affected by the disease can share answers, opinions, ideas and support.

ALZConnected launched last year thanks to the generosity of our donors. This free site, designed especially for the Alzheimer’s community, offers a safe place for people to connect with others in similar situations 24 hours a day, 365 days a year through:

Message boards where members can pose questions and offer advice to one another.

Community solutions that include both public and private groups focused on topics of shared experience.

Personal inboxes that let members communicate one-on-one by sending secure, private messages.

If you or someone you know is impacted by the disease, I encourage you to explore ALZConnected. This extremely helpful resource is offered exclusively by the Alzheimer’s Association.

Shifting sands of retirement planning

Defined-contribution pension investments are managed by each individual plan member and are quickly replacing Defined Benefit Plans. This is going to be a major problem for our Country as it is for other countries around the world. In a report by the Financial Post in May the writer talked about the lack of preparation for retirement that will hurt us in the long run.

Despite heightened awareness and attention of the financial markets and the impact they could have on retirement nest eggs, Canadians remain predominantly indifferent toward their pension investments.

A BMO Retirement Institute study found 48% of women and 38% of men have no financial plan or investments.

Statistics Canada’s most numbers, show an estimated one million Canadians (6% of the workforce) are currently registered in a defined-contribution pension plan. Yet, few are actively managing their assets

Idan Shlesinger, managing partner of defined-contribution Pensions and Savings Plans at insurance consultancy firm Morneau Shepell, says most defined-contribution plan members mistakenly believe they need not worry about their retirement because they have a pension. “The impact of DC pensions hasn’t entirely been felt yet; the concern is that when it happens there will be a great deal of disappointment out there,” says Mr. Shlesinger

In England less than half of pension savers, just 46%, are putting aside enough for their retirement -- a number that's five percentage points down on last year, and a fall of eight percentage points from 2009.

To cut a long story short, it turns out that one in six pension savers has stopped making monthly pension contributions since the recession started in 2008. Keeping the wolf from the door today, in short, has taken priority over keeping the wolf from the door in retirement.

According to the Office for National Statistics (ONS), over a million of people in Britain have suspended monthly pension contributions, with pension contributions falling from £20.9 billion in 2008 to £18.7 billion in 2010 -- a fall of just over 10%. 

There are no reports that I could find about how many Canadians have reduced or stopped payments into their RRSP programs since the recession, perhaps there are studies done, so if you know of one, could you please post the link here for us.