What do you fear about retirement?

Jul 23, 2008

Retirement Planning Not the Forte of Canadians


1. According to a recently released Statistics Canada study, almost half of Canadian households spend more than their pretax income in a given year. That's up from 39 per cent in the early 1980s. From 1982 to 2001, the study found, per capita debt doubled, because of sharp increases in both mortgages and consumer debt.

2. 67 percent of Canadians say money is their most frequent worry.

3. Only 40 percent of Canadians know how many millions are in a billion.

4. Still worse, only 25 percent of Canadians know the difference between the National debt and National deficit.

5. According to Desjardins Financial security's latest retirement study, many Canadians are not prepared for the challenges retirement can bring. They are failing to consider a variety of factors and risks that can have an impact on the yield and longevity of their savings, such as inflation, rising life expectancies and healthcare costs. Nearly 60% of those surveyed are not concerned about having a large enough nest egg to sustain their standard of living in retirement. More than 80% have not eliminated their consumer debt in retirement and even more are not concerned about paying off their mortgages (88%). And more than half are not worried that inflation will erode their savings.

Jul 18, 2008

The New Retirement for Baby Boomers Means a Gruesome Retirement



Up until a few months ago, a lot was being written about how the baby boomers were so cool and how they would be creating a new retirement. Although I am a baby boomer myself, I have always found baby boomers thinking of themselves as so special and so cool as pathetic — quite revolting as a matter of fact!

So, now I actually get a great deal of pleasure when I read the latest headlines regarding retirement, particularly those relating to baby boomers and how many of them have to delay retirement — or may never be able to retire. Here are some of the headlines I received on Google Alert in the last week: (My favorites are in bold.)


  • The middle class can expect big retirement troubles
  • Slow economy forces seniors out of retirement
  • Study Warns 'Near Retirees' of Need for Frugality
  • Middle Class? Dreaming of retirement? Forget it!
  • Baby Boomers: retirement may be a mirage!
  • Baby Boomers Face Longer Lives with Fewer Assets
  • Retirees Could Face Final Years in Poverty
  • Study: Retirees should live frugally
  • Longer lives, not enough savings
  • Your retirement isn't looking so good, according to a new study from Ernst & Young. ...
  • Most Americans Struggling to Afford Retirement
  • Most Florida retirees must lower standard of living, study says
  • Americans Dipping into Retirement Funds Early
  • Americans Tapping In to Retirement Worries Idaho Senator
  • Workers Raid Retirement Funds During Tight Times
  • More Raiding Retirement Funds Amid Economic Woes
  • Returnment — the new retirement
  • The middle class can expect big retirement troubles
  • Study: Retirees should live frugally
  • The Worst News Yet for Your Retirement

It appears that the new retirement for baby boomers means a gruesome retirement. Fact is, if most baby boomers weren't so spoiled and so irresponsibile human beings, they wouldn't have a problem with their retirement. In other words, if you are a baby boomer, it's all your fault can't retire at 55 or 60. Don't blame the government or the economy or anyone or anything else.

I semi-retired when I was 35 and had a net worth of minus $30,000. Even though I have worked less than half of my adult life and have never made a penny in house appreciation (simply because I rented for all these years), I can remain semi-retired quite comfortably.

If you would like to be able to do the same, I recommend this well-titled book for which I have adapted a short review from two other reviews:


Money Book


You're Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead, by Larry Winget. The author is a no nonsense guy and a master of tough love. This book will tear down every excuse you can think of and show you that it's your choices that are making you broke. Warning: You have to quit blaming all of your financial problems on outside forces and circumstances. The author is harsh. So if you get upset about that, maybe you should pass on this one, continue to blame your problems on someone else, and end up broke in retirement — like a lot of baby boomers are likely to be.

To be sure, there's no sweet talk in Winget's advice, who summarizes money management to these points: Get off your duff and start doing the hard work necessary to make financial success happen. His advice includes: Give up cable TV. Get a cheaper car. Move to a more-affordable home. Live on what you earn. This guy pulls no punches, and points his finger right where it belongs — at YOU — the person who created your financial mess.


Another reason that I was able to semi-retire at an early age is that I have followed the financial philosophy that I advocate in my books How to Retire Happy, Wild, and Free and The Joy of Not Working.


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Purchase The Joy of Not Working on Amazon.com with this direct link:




Retirement Planning Book

Jul 14, 2008

Your Home as Part of Your Retirement Plan Is a Haunted House

Retirement Living

Many Americans came to think of their homes not only as castles but also as a nest egg for retirement while real estate prices were shooting up during the first half of this century.

Now with the bursting of the home price bubble (which does not come as a surprise to an intelligent person), however, American homeowners are finding that they have accumulated little wealth in the way of home equity, leaving them almost entirely dependent upon Social Security and Medicare.
Fact is, A home that is part of your retirement plan Is a haunted house. Financial planner Robert Doyle (CPA with Spoor, Doyle & Associates in St. Petersburg, FL) once said, "When you retire, your house is your home. Don’t look at it as an investment. You can convert it if you need to, but if you’re retiring because of the equity in your house, you better get back to work."

A little over a year and a half ago, when I was forced to purchase the half-duplex that I had rented happily for over 25 years, some of my friends warned me that I could be purchasing at the height of the house boom in Edmonton. I told my friends that I was aware of this but I was not purchasing the place as an investment or as part of my retirement plan. Indeed, houses should never be considered as an investment — for retirement or otherwise!
"A house should be viewed only as any other consumer item," was how I put it. "Then if the price goes down, it is no different than when the price of your car or your running shoes go down in price. Unfortunately, most people don't understand this. Some do, however. (Robert T. Kiyosaki, the author of Rich Dad, Poor Dad, stated that your house is not an asset but a liability.)
"The problem," I told my friends, "is that millions of people have been conned by shady bankers and real estate agents into believing that their home is the biggest investment that they will ever make in their lives. What a ridiculous statement! I know that the biggest investment that I will ever make in my life is in myself, in my self-education about how to live within my means so that I don't have money problems. My self-education also is enhanced by tapes, books, and seminars on how to create money in innovative ways so that I don't have to live in poverty — even if haven't had a real job in over 25 years."
Alas, the con job of having people believe that their houses are investments has come home to roost. The 2008 Retirement Confidence Survey just showed the biggest one-year drop in its 18-year history.
One of the major reasons was that that home ownership was a substantial component of most respondents' net financial worth: one-third on average, according to a study of baby boomer retirement security by Dartmouth College economist Annamaria Lusardi and her colleagues. They further calculated that an average national housing price drop of 13.5 percent — less than we've already experienced — would decrease the net worth of the boomers they surveyed an average of 10 percent.
A loss of 10 percent of net worth for people on the verge of retirement — which doesn't include stock market losses or the losses people will incur if the housing market continues to fall, as many analysts think it will — can have a big impact on a retiree's ability to live the life he or she imagined.
Yet many Americans are relying on their homes as a source of income in retirement, either through downsizing to a smaller property or through dubious transactions like reverse mortgages. Between 1997 and 2006, housing prices increased an average of 83 percent, leading more people to assume their equity would see them through their retirement years.
In the last year, however, house prices in the U.S. are down on average 14.1 percent. Worse yet, some people say that the house price declines have just started. A few analysts are predicting that house prices will go down for 5 to 7 years straight. Think this can't happen? You are fooling yourself. Remember how financial analysts claimed that real estate prices could never go down in Japan, particularly Tokyo. When Japan had their recession hit in the 1990s, real estate prices in Tokyo declined for 10 years straight.
So much for houses as investments for retirement. Again, houses are consumer products and not investments. If you are buying a house on the hope that it will go up, you are speculating. If you are speculating, you should be prepared for the price to go down instead of up. Don't blame anyone else when your house price goes down. You caused this situation to happen by believing what the shady real estate agents and mortgage lenders have told you.
If you want to be financially well-prepared for retirement, invest in yourself by spending as much money as you can on books, seminars, and motivational tapes on how to run your own business or how to make money on the Internet. This is for certain: The most valuable asset is actually your ability to earn an income. I know that if I was to lose all my financial net worth that I have today, I can still survive financially. I can earn a living without having to get a job and still have a great retirement.
The same applies to you. Your marketable job skills and knowledge represent your personal earning power. Although the banks and other financial institutions don't count intangibles such as creativity, innovative character, risk-taking ability, and specialized knowledge in tallying your net worth, you should. These items are much more important to a retirement portfolio than a house.
Note the retirement quote by Financial planner Robert Doyle comes from the E-book:

The 237 Best Things Ever Said about Retirement by Ernie J. Zelinski


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Download the Free E-book The 237 Best Things Ever Said about Retirement by Ernie J. Zelinski at:


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Jul 12, 2008

Mortgages Okay in Retirement Say New Wave of Retirees

The baby-boomer generation about to retire is in no rush to pay off their mortgages according to the third annual Affluent Boomers at 60 survey from Bell Investment Advisors.

The prior generation of retirees had a major goal prior to retirement: "Burn the mortgage!"

Not so with the baby-boomer generation. More than 55 percent of boomers surveyed who currently hold mortgages do not plan to pay their mortgages off until at least their 70s, and likely never.

Of the 500 boomers surveyed approximately two-thirds currently have mortgages on their residences. The remaining third either rent or do not have a mortgage.


For Retirement Quotes about Mortgages and Money



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Jul 9, 2008

A Little Retirement Planning Means a Lot

Dartmouth College economist Annamaria Lusardi and her colleagues found that any amount of planning for retirement had a significant effect on the bottom line of the people she surveyed. Take a look at this comparison of net worth between different levels of retirement planning:



Time Spent Retirement Planning Av. Net Worth



  • Hardly any time at retirement planning $315,579

  • A little time at retirement planning $356,552

  • Some time spent on retirement plannning $365,354

  • A lot of time spent retirement planning $517,252

As you can see from the above figures, even a little time spent on retirement planning will go a long way.


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Jul 5, 2008

Americans Know Little about Retirement Planning

Most Americans spend more time planning for vacations and holidays than planning for their retirement, according to the Employee Benefit Research Institute. No wonder they know little about retirement planning.

This past January, the first Baby Boomers turned 62, marking a new era, as approximately 78 million of them move toward retirement. Alas, today, many retirees don't really retire. They keep on working into their 70s and beyond, just to make ends meet. For some, their pension plans didn't pan out according to their retirement plan, paying only 30 to 40 percent of what they expected.

Scott Pyle, managing director of Pyle/Cunningham Wealth Management Group of Wachovia Securities, said it's quite a blow for these folks who've worked hard their whole lives, just to have to change strategies quickly at retirement time.

It forces them to "transition" into retirement, by working another 10 years and reinvesting their pension money, so that they can have enough money to live on when they do actually retire.

Pyle says this retirement generation faced two very big surprises: They're living much longer than they expected. And as a result they have to go back to work, or face cutting back on their lifestyle and their quality of healthcare.

And Pyle said if you think Social Security is your retirement plan, think again. "Many people that are putting into the Social Security Plan think this will be a retirement plan. But Congress can change
any benefits as we see it," he added.

Pyle has one simple word of advice - budget. He says it's the best way to avoid the risks that many retirees face today. "Over 80 percent of Americans do not have a formal written budget, and if you don't know how much you're spending, the money is just going to fall through your fingers," Pyle said.