Thinking of your Local Foodbank.

August,  summer is half over, and we are starting to think about the fall. Do you remember heading back to school as a kid?  Do you remember the total mix of emotions that came with it? I certainly do. I remember the anticipation of attending a new class, the excitement of seeing school friends again, and the pride in showing off my first day of school outfit. 

I even remember the forgotten smell of the early morning air during the crisp walk to school. And while my family didn’t necessarily have the best of everything, I always knew that I was taken care of and that my lunch box was full.

But I was lucky, while many are not, and families struggle to make ends meet, many use the food bank to lend a helping hand to make it through the tough times. Summer is tough for many families and planning to go back to school is also hard. Your local food bank needs your help so it can be there for your neigbours who need your help.

A food bank volunteer recently shared a letter with me that they received from a single mom who had just lost her husband. To ensure that her daughter had all that she needed, the mother made many sacrifices that you or I might take for granted. She didn’t have a car or a cell phone and often went without eating so that her daughter could have what was needed for school. This, unfortunately, still wasn’t enough. They were still hungry.

Many like this single mom, exhaust all resources before they ask for help. Your local food bank has programs that help families like this one. Because many people’s schedules are more variable in the summer, and because few summer holidays traditionally involve big meals, it’s easy for food banks to drop off of people’s radars.

People are away, and it’s not top of mind,b ut those who need food banks aren’t off on holiday

In fact, the need for food often rises in the summer, because children who normally rely on school breakfast programs no longer have that option.

Demand is the same or it increases a lot at the time when support is the lowest. So many food banks have summer programs to encourage your participation and support. Remember the demand is still high, so please support your local food bank.

For a different view on retirement savings Take a look at Simplicity New Zealand

I found an interesting alternative site with a different view on investing for retirement. The site caters to people in New Zealand and I wish we had this type of approach in Canada.  The site is called Simplicity and it  can be accessed here: https://simplicity.kiwi/

Simplicity is an online, non-profit KiwiSaver plan that only charges members what their account costs to manage, nothing more. I am posting just one of their articles that show their approach. If you live in New Zealand check this out if you don’t check it out anyway because it has a lot of great information

Women's retirement funds are typically 40% lower than men’s. Are you saving enough?

Here are a few stats that could make you go gray earlier than expected as a female.

·         Women makeup 61% of the 75-84 age group and outnumber men more than 2 to 1 in the over 85s.

·         Women live longer than men, and by the time we're 65, more than half of will be single or living alone.

·         Not only do women tend to take time out of the workforce to care for children and/or dependents...

...but, on average, they earn less and spend longer in retirement than men.

So, if women earn less, live longer and spend more time in retirement than men, you might expect there's a financial plan in place for that. Guess again?

Although the gender scales are fairly balanced when it comes to account sizes in KiwiSaver, men are still socking away close to 40% more than women in private savings schemes.

According to Statistics NZ, median balances for men are $69,000 while women's are $42,000.  The median value of non-KiwiSaver schemes was $53,000 – six times more than the $8,000 median value (the average is $15,000) of KiwiSaver schemes.

Reason to panic? Sure, but it won't change the outcome. A more productive response is to get a plan in place.

Start by reviewing your current situation. Tally up your assets and debts, and figure out your net position. If you are partnered, do the sums with and without your joint assets, or run two scenarios where joint assets are halved.

Hammer the debt as fast as you can, so you can boost your savings. Get a divorce from debt, so you don't go back again.

Take a close look at your savings strategies and vehicles. How much are you saving, how often, where and what assets are you invested in?

KiwiSaver is a great savings tool for a number of reasons: it's a diversified investment (Simplicity invests in more than 3,000 companies across 23 countries); it's regular savings (that's compounded savings optimised); both you and your employer contribute to it; and as an added bonus you get free money from the Government in the form of member tax credits if you are over 18 and under age 65.  

 Note: If you're self-employed and haven't already done so, make sure you pay $1,043 into your account before June 25th to be eligible for the full member tax credit of $521.

Contact info@simplicity.kiwi if you're unsure how to do this. See also KiwiSaver for the Self-employed blog here. 

Save early, save often, save a lot 

How much you'll need in retirement will depend on some of these scary stats mentioned above. How long you'll live, whether you'll have someone to grow old with, (and hopefully help with the costs), lifestyle choices and here's a big one: whether you've paid off your mortgage.

At current rates, New Zealand Superannuation (see current rates here), covers just the bare minimum. And the bare minimum (basic bills, food, no alcohol, movie nights, or dinners out) assumes you're not having to pay rent or a mortgage with your government cheques. 

Arguably, one of the best returns on investment will be paying off the mortgage -- as fast as humanly possible. Given house prices these days, and the size of many peoples' mortgages, it could be awhile. Saving for retirement as well as paying off the mortgage could be challenging but smart if you can make it work for all the reasons outlined above.

How will your savings grow?

Projections are tricky with managed funds because of the volatility of the stock market but there are some good forecasting tools to help you meet some targets.

Simplicity's member area (see My Options) includes a forecasting tool that shows you how different fund types and contribution rates will impact your financial future. Please read the assumptions so you understand how these calculations are made. Tools like these will help you see how much you'll need to save to meet a financial goal at a particular age.

Many advisors use $50,000 a year income in retirement as a hallmark to aim for. See also Craig's guide to retirement here for some numbers. 

Sorted.org.nz also has some excellent planning tools and calculators.  

KiwiSaver funds are eligible to be drawn down starting at age 65. New Zealand Superannuation, if you are born after Jan.1, 1974, will commence at age 67. If you were born earlier, it's 65.

When you're young, it's hard to fathom yourself a senior but one of the worse things you can do is pretend it's not going to happen, and risk missing out on years of compounding interest or returns. That's especially the case when you'll need more in retirement than your male counterpart. 

Especially if they live a long time.

A female born today is expected to live to 84. Get saving ladies

Did you see the news last week?

I'm actually not referring to anything in particular, but I'm willing to bet that your mind was able to instantly jump to something from the news last week.  Now let me ask you:  was it good news or bad news that sprang to mind?

The fact is, there are a million things out there all vying for our attention.  A million issues. A million causes. A million stories. And a million headlines. It can quickly become very numbing. Especially when so many of them are negative.

The thing I want to remind you about is that we always get to choose where we look. Choosing not to look at depressing or enraging headlines doesn't mean that you're condoning things or that you're allowing things to continue.  First and foremost, it means that you're choosing to own your life by owning your attention and deciding where to direct your focus.

We all have options, focus on the bad news and spring into action to do something about it; focus on the bad news and get angry and depressed about it. 

Maybe even re-post the bad news while adding in your angry/depressed $0.02. This is not helpful at all. Reposting doesn't help the situation and drags you and others down in the process.

Another option, see the bad news but focus on kittens and puppies instead. This is much less depressing, but not very productive.

Choose to focus on the things that really matter to you and throw yourself into them.  Who's with me on the last option?

Internet Literacy for Baby Boomers

It’s an undisputed fact that new technologies have the potential to revolutionize how we live, how we purchase and even how we retire. Take smartwatches, for example. The writers at A Better Way in Home Care, an LA Based home care referral service, report that a California scientist named Michael Snyder found a way to diagnose a mild illness through his smartwatch and prevent the onset of symptoms through therapy. This example is just one of many that demonstrate the great benefits of being a savvy tech user.

While the Internet may not be as new as smartwatch technology, it still represents a great unknown to Baby Boomers. However, that seems to be gradually changing. According to the 2016 Technology Survey for Older Adults, Age 59-85+ sponsored by Link∙age and conducted by Aging in Place Technology Watch, 50% of people 75+ use the Internet. This is an impressive improvement compared to 93% of this age group who were not using the Internet back in 2000.

However, at the same time, Boomers are reporting that they find the ever-advancing technology both good and frightening. A lot of this fear comes from the fact that technology is constantly changing and Boomers are slower to adapt to the changes without the proper instruction.

Within the past few years, remarkable changes in technology have permeated society, driven by smaller, cheaper core technologies, slick designs, and must-have information, reinforcing the importance of the following:

·       The Internet is a path to connections and engagement. Adequate access

·       to online information is a basic prerequisite to keeping up with change. The federal government has encouraged individuals to apply for Social Security and Medicare benefits online; and numerous coupons and discounts are only available online.

·       The Internet provides the ability to connect with family members, find new friends, locate a health care provider, learn about a new medical discovery, and buy lower-cost goods and services online.

Within the older age cohorts, access and interest is still limited but growing. Pew Research studies reinforce the digital dividing line for Internet access (regardless of device), finding that 50% of the 75+ population indicated that they go online. This represents a remarkable change over the past fifteen years, when 93% of those aged 75+ were not online in 2000.

The digital divide among older seniors is not surprising, given the complex process and cost to obtain: First, a senior must obtain both an Internet service plan (average price $60/month) and a relatively current device: a PC, tablet or smartphone fast enough to use with today’s graphics-rich websites. It must be customized for the user’s individual needs. Training in device use and ongoing support helps newcomers. A few senior-specialty vendors simplify complexity with senior-focused products or services, but most technology innovation is designed by the young for the young.

Older adults do not see their family members as the path to obtaining new technologies – or for that matter, asking them to use them. And as the updated version shows, health and wellness technology use by older adults has yet to happen – not surprising, because the general population is not yet fully convinced of their benefit

For those seniors, able to afford high speed connections, Internet access links them to families, enables them to learn about and find resources, take advantage of streaming services, and enables them to shop online – versus driving around -- for good deals.

To help seniors become more tech savvy, companies could:

Promote senior-friendly service plans. Having a senior-friendly plan is a good start.5 Offering a plan to low-income seniors is progress. Promoting/marketing it, along with available (and free) training at point of purchase is better

Provide training when upgrades are available. Some carrier and tech reseller organizations see a market for serving older populations and encouraging purchase of new smartphones – critically important because their younger market segments are saturated – and it is fast becoming a chore to get current owners to purchase costly upgrades.

Publicize and deliver more training opportunities. Some organizations have long been offering free online and in-person training for older adults (for example, AARP TEK and SeniorNet). Some of these have partnerships with carriers, identified, as with OATS, on the sponsorship portion of the websites.

Create and market online/telephone support services. If the future is online, then service should be there as well. Assume that over time, seniors will migrate away from special purpose technology and be more likely to acquire standard devices (designed for all), customizing to their specific needs through software.