Or, more accurately, how to save 1,200 dollars in an hour.

As we get closer to our retirement, we have been doing a careful analysis of our spending patterns. And there is certainly room to improve. During the course of an hour last week-end, we saved 1,200 dollars in annual expenses.

When I turned 50, the monthly payment of one of my term insurance policies had doubled from 45 dollars a month to 90 dollars a month. The payment is bundled with a number of other term insurance policies that get paid through automatic withdrawal and I am embarrassed to say that I hadn’t bothered to take any action for the past nine months.

I went online to get a quote from my favorite bank, the Bank of Montreal. And I obtained a quote for 50 dollars a month. For a policy with a significantly higher face value. I bought that policy and cancelled the old one. Annual savings? 480 dollars.

I had switched from the National Post to the Globe and Mail last year. We were paying 25 dollars a month for the Globe. I had received an offer in the mail to subscribe to the National Post. 30 dollars. For one year. We cancelled the Globe and switched to the Post. Annual savings? 270 dollars.

My wife received a Gold Card for my charge account. Not that we asked for it. And then I thought about whether there was a fee for this card. Yes indeed. 50 dollars. Card cancelled. Annual savings? 50 dollars.

We keep three active cellphone accounts in our household. I never use mine. Contract is at end of term so that phone is gone. Annual savings? 400 dollars.

Many financial planners talk about the so-called Latte Factor. It is so easy to throw money away without thinking about it. And a little bit saved here and there can make a difference over time.

Statistics Canada released income data on Canadians taxpayers from 2004. If your individual income was $89,000 or more, you were in the top 5 percent of Canadian taxpayers. To be in the top 5 percent in terms of family income, you would need $154,000 or more.

A middle income family earned $43,000 in 2004.

The range of incomes in the top 1 percent of the Canadian population varies dramatically. To gain entry into the top 1 percent, your individual income would be more than $181,000 or more than $305,000 for the total family income. To be in the top 0.1 percent your individual income would need to be more than $648,000. The family income for the top 0.01 percent? A mere $1,045,000.

The top 2,000 Canadians, 0.01 percent of the population, individually earn more than $2.8 million. For the family to be considered as the top 0.01 percent, the income would need to be more than $4.3 million.

95 percent of Canadian families earn less than $154,000.

At the end of the day, income is relative. I found that over the years, as I made more money, my expenses somehow increased.

Thank heavens for forced savings.

Scattered across the mainstream media was a story on retirement planning in Canada. The question: are Canadians saving enough for their retirement. The answer: no.

This is news?

The media story was based on a report, sponsored by the Canadian Institute of Actuaries. You can download the pdf report here. And some doom and gloom stories covered by the mainstream media can be found here, here and here.

The report asks some basic questions about whether a person, 40 years old or over, is saving enough for retirement. According to the report, two thirds of Canadians are not.

However, reading through the report is very confusing. Assumptions are made without clearly specifying data. For example, modeling of investment returns followed the projected yield curve for Government of Canada bonds adjusted for low and moderate inflation. The report does not mention the assumed rate of return or the impact of inflation.

Looking at the Bank of Canada website here, I suspect that the report used an interest rate of about 4.7%. Factor inflation between 2 and 3% and little wonder most Canadians won’t make it.

Look at one of the scare diagrams below. I have no idea how someone on the Average Wage Index of $40,000 per year can save 20% of their pre-tax income for retirement. Looks like WalMart will have a large labour pool of senior citizens.

How many households in Canada have investable assets over $1 million? I came across some data which reported that only 100,000 households have investable assets over that amount. Investable assets do not include the primary residence.

According to BMO Harris Private Bank, the Canadian high net worth market statistics are as follows:

• 390,000 people between $500,000 and $1 million
• 185,000 people between $1 million and $2 million
• 91,100 people between $2 million and $5 million
• 12,100 people between $5 million and $10 million
• 7,000 people over $10 million

The average age of a Canadian with investable assets over $1 million is 58. And what about philanthropy? I could only find data on inherited vs entrepeneur philanthropy.

A Cornell University study showed that for every $1,000 of entrepreneurial wealth, an entrepreneur will give $4.56 to charity. However, in the case of inherited wealth, the inheritor will only give $0.76 for every $1,000 of inherited wealth.