The Great Recession of 2008-09 blew up many a retirement plan, and now we have the data to prove it and finally understand just how damaging the boom and bust cycle has been. The Employment Benefit Research Institute (EBRI) Retirement Confidence Survey was published this month and the news is grim.

How could it not be? For the last 15 years, far too many Americans jumped from one asset bubble (rising stocks in the late 1990s into early 2000) to another (real estate from 2000-06), hoping that the increasing value of the asset would do the work to fund retirement, instead of relying on boring old savings. I can recount dozens of conversations with former clients who said some variation of, "Why do I need to save so much if I keep earning 12 percent a year on my retirement funds?" or "I'll just sell my house and use the equity for retirement." It was a hard sell to convince these folks that saving was a more reliable way to reach their retirement goals.

The problem was that the two asset bubbles made many people lazy. Americans went from a personal savings rate of about 8 percent in 1985, down to 1.5 percent in 2005, back to 4.6 percent today. The combination of a falling savings rate and two bubbles bursting has put many in a precarious state as they approach retirement.

According to EBRI, Americans' confidence in their ability to retire comfortably is at historically low levels. Just 14 percent are very confident they will have enough money to live comfortably in retirement. Part of the reason why confidence plunged is because the Great Recession decimated asset values so severely. Household net worth still remains seven percent below where it was in July 2006, the peak of the nation's housing bubble. But an equally significant impediment to a healthy retirement is the weak labor market. Forty-two percent of those surveyed said job uncertainty is the most pressing financial issue facing most Americans today.

Without income from a job, retirement account values remain stagnant, and households are forced to spend savings, which have been depleted over the past five years. In fact, 60 percent of workers report that the total value of their household's savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.

With such a low level of savings, 25 percent of workers have changed their expectations about when they might stop working. In 1991, 11 percent of workers said they expected to retire after age 65; and now in 2012 that number has grown to 37 percent. Most experts believe that the number of people who will continue to work throughout their 60s will increase dramatically.

There is one major risk that arises with the "I'll just keep working" retirement plan: What if you can't keep working, either because your job doesn't exist or because you physically aren't able to? Half of the current retirees surveyed say they left the workforce unexpectedly due to health problems, disability or changes at their employer, such as downsizing or closure.

These statistics point to an obvious solution: save more as quickly as you can. How much more? That depends on your specific circumstances. As I noted in a recent article ("What's your retirement number?"), EBRI has a terrific calculator called the "Choose to Save Ballpark E$timate," which should help the 56 percent of workers who have not tried to calculate how much money they will need to have saved by the time they retire in order to live comfortably in retirement.

There aren't a lot of easy answers, but I have seen great progress when retirees and near-retirees focus on the parts of their financial lives over which they exert control -- their expenses. For many, this may mean downsizing, while for others, it may mean reducing spending on everyday discretionary items or accelerating debt pay-down. It's never too late to start building your retirement confidence.

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Building Retirement Confidence

TORONTO, ONTARIO--(Marketwire -03/30/12)- A number of Canadians aged 54 and under will be affected by changes to Old Age Security (OAS) announced in the Federal Budget. In 10 years the age for OAS eligibility will rise from 65 to 67.

OAS benefits are currently paid to Canadians aged 65 and over; individuals can receive up to a maximum of nearly $6,500 per year based on meeting residency requirements.

According to a report by Harris Decima commissioned by the BMO Retirement Institute, 32 per cent of Canadians aged 25-54 will rely on OAS, the Canadian Pension Plan (CPP) and the Quebec Pension Plan (QPP) as their primary source of retirement income.

Tina Di Vito, Head of the BMO Retirement Institute, advises Canadians to adopt a long-term approach to saving for retirement and understand the right tax strategies to maximize old age security benefits. These strategies, despite the changes announced in the Federal Budget, enable income to be earned from the most advantageous sources.

BMO offers tips on how Canadians can prepare for retirement:

To learn more about retirement income strategies and to read Retirement Institute reports, please visit: http://www.bmo.com/retirementinstitute.

Get the latest BMO press releases via Twitter by following @BMOmedia.

This study was conducted by Harris/Decima using their proprietary online panel. A total of 1,008 Canadians ages 25 to 64 were surveyed between November 10th and 24th, 2011.

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Changes to Old Age Security-BMO Retirement Institute Offers Tips on How Canadians Can Prepare for Retirement

Forced retirement is a fact of life for a growing number of baby boomers and can be just as traumatic as divorce or the loss of a family member. When you're suddenly facing retirement because your company has closed, given you a buyout or eliminated your job, myriad financial issues can have an immediate impact on your goals and dreams for the future.

According to a 2011 survey from the Employee Benefit Research Institute, 45% of retirees said they stopped working earlier than they expected. The three most common reasons were poor health (cited by 63%), corporate downsizing or closures (23%), and the need to care for a spouse or other family member (18%).

Christine Moriarty, CFP and the founder of MoneyPeace, recommends that you be defensive in case you have to retire early by following time-tested advice, especially if you're in your 50s. "Have enough money liquid at a local bank to cover your basic needs for at least six months," she says. "This way, you won't have to react to a circumstance and can adjust in a more structured way after the immediate crisis has passed."

Moriarty also suggests that boomers consider paying off their mortgage as soon as they can. "The lower your home loan, the more manageable it is in times of crisis."

Not only is this sound financial advice during a difficult financial transition, but a Consumer Reports survey published in 2010 found that about three-quarters of retired people who had paid off their large debts, including mortgages, had a high level of satisfaction with their lives.

Whatever the reason for a forced retirement, it stirs up a host of big questions and issues such as: Should I start receiving Social Security immediately? Live off my savings or take distributions from a retirement plan? Do I need to reshuffle my investments to make up for lost savings or shield myself from future losses?

Many forced retirees need to apply for Social Security right away in order to pay everyday bills, according to Andy Landis, author of "Social Security: The Inside Story." But any decision on whether to accept early Social Security benefits at a reduced rate or delay benefits for higher future payments does not have to be permanent. "For those who aspire to return to the workforce, the system and payment calculations don't penalize you; they actually adjust automatically for you," Landis says.

That means if you return to work and earn more income than you're allowed, your Social Security payments will automatically stop. Landis says when you reach your full retirement age, you'll be re-credited for any months in which payment was halted.

Your Social Security payments could increase as a result of inflationary adjustments, and if you resume working and paying into the system, your lifetime Social Security earnings could increase as well.

Knowing how and when to use various retirement savings is important when you're suddenly forced to retire. The options for those with retirement plans such as 401(k)s and 403(b)s can be dizzying and add to an already stressful and anxious time.

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Forced Into Retirement? Here's How to Cope

When he was 39, Mark Brandemuehl bought a home in Colorado properties with the intention he'd retire there.

But until the day comes when he leaves the workforce and enter retirement, he plans to rent out the properties and have them pay for themselves until he is ready to move in. With rock-bottom home prices and mortgage interest rates hovering around 4%, Brandemuehl, who is on the hunt for his third property, isnt the only one with this idea.

A 2011 survey by vacation rental booking site HomeAway.com shows 14% of vacation rental owners purchased their home to be used during retirement and are renting it out in the meantime. Some homeowners rent out their second home for a limited time each year while others seek longer terms with one-year or longer leases.

The National Association of Realtors reports rental income influenced 71% of second home buyers who purchased in 2011, nd 91 percent of them plan to rent their new purchase within 12 months.HomeAway.com members generate $28,000 annually by renting their home about 19 weeks a year, and half of the sites owners can cover 75% or more of their mortgage by renting to travelers.

Renting out a house until retirement rolls around offers many advantages. Real estate yields are usually much higher than the average stock market return, and buying a retirement home for the future can provide enough cash flow to pay for and even completely payoff the home by the time you move in, says Brandemuehl, who is also vice president of real estate site Movoto.com. Retirement and vacation destinations usually provide a reliable, gainfully employed stable of tenants; Brandemuehl's properties have been vacant less than six months total in the last seven years.

But being a landlord requires a lot of work and extensive planning. You could potentially become upside down on your investment or encounter heated or confrontational situations with tenants, says Mia Melle, a broker with property management firm RentToday.us.

You might also decide not to live where you bought the property, or the property could unexpectedly become vacant or misused. Higher-end homes, are harder to rent, according to Brandemuehl, so be prepared to advertising heavily.

Here are six expert tips to consider before buying a retirement home to rent:

Run the numbers. Renting out a second home can be a great opportunity if the rental income covers your mortgage, taxes, insurance, and provide an additional cushion for unexpected expenses, says Jean Allard, senior real estate specialist and vice president of Keystone Real Estate Group. But experts warn that you shouldnt buy a home unless you can afford the payment on your own in the event that there are vacancies. Ask a real estate agent how much your home could command in the vacation rental and long-term rental markets.

Be mindful of aging and rentability. Find a home with a single level so that stairs will not be an issue, Allard says. A retirement home should be ready to accommodate physical needs as they change. It should also need minimal work. Entry-level homes that are three bedrooms, two baths, around 1,300 square feet, and near (and not in) communities with Homeowners Associations tend to rent well, says Aimee Elizabeth, real estate investor and author of Poverty Sucks! How to Become a Self-Made Millionaire. You could buy a four bedroom, 2,000-square foot house that might cost you twice as much, but you wouldn't get twice the rent. You'd be lucky to get an extra $100 to $200 a month, she says.

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Renting to Retirement: Six Factors to Consider

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Whither our youth I scraped in under the wire - well, a little more, actually - on the changes that will affect retirement in Canada. As did much of my generation.

That's small comfort to our children, many of whom are already suffering the after-effects of the financial crisis and recession, and who now also face retirement, interrupted.

Canada's Finance Minister unveiled a budget this week that will, in time, reset the age of retirement to 67 by hiking the age of eligibility for the Old Age Security benefit, worth more than $6,000 a year, from 65. That begins in 2023, and will be phased in, so it doesn't capture the Boomers.

It will, though, hit their kids, many of whom are already struggling with a youth unemployment rate of more than 14 per cent and, according to studies, face a hit to earnings because they graduated in a recession.

Thirty-two per cent of people between the ages of 25 and 54 will be relying on OAS and Canada Pension Plan and Quebec Pension Plan benefits as their prime source of income in retirement, according to a Harris Decima survey commissioned by Bank of Montreal's BMO Retirement Institute.

The change, along with others announced in Thursday's budget, is meant to help sustain the OAS program, which the government warns will cost $108-billion by 2030, compared with $38-billion in 2011.

As some observers note, retirement is still a long way away for many of those affected, and they could start planning immediately.

"At least for those still thinking about retiring at 65, they should be saving a higher percentage of their income now to raise a larger pool of private funds to draw down," said chief economist Avery Shenfeld of CIBC World Markets. "In practice, as opposed to theory, we dont expect that degree of rational planning to materially hit Canadas savings/consumption mix in the near term."

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Retirement, Interrupted: A bleaker outlook for our kids

Video Link: https://www.youtube.com/watch?v=n3sAy_i8Dqs

29-03-2012 20:24 Months of speculation about changes to Old Age Security ended with today's budget. But, do the changes calm concerns among Canadians or fuel more anxiety?

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Retirement Takes a Hit - Video

I'm in my mid 60s and I'm rolling $1.5 million into an IRA. I'd like to create a portfolio of 60% stocks and 40% bonds using low-fee ETFs and mutual funds. Is this a good plan -- and which funds and ETFs would you suggest? -- Ollie F.

Your plan is spot on.

The real beauty of it is your focus on keeping investment expenses down, a strategy that has the potential to boost returns by limiting the portion of the your investment's gain siphoned off by the fund company.

Most people understand that lower costs and higher returns can help them amass more savings during a career, but I'm not sure people appreciate the benefit of that combination in retirement -- it can substantially reduce the danger of running through your savings too soon.

Let's say you plan to withdraw an initial 4%, or $60,000, from your $1.5 million at age 65 and then increase that amount for inflation each year. And let's further assume that your annual expenses run 1.5% a year, a ballpark figure for people who invest in mutual funds and the like.

Reducing your investing costs by half a percentage point to 1% a year can lower your probability of running through your savings before age 95 by roughly 25%.

Reduce your yearly investing expenses a full percentage point to 0.5% -- which is doable if you stick to ETFs and index funds with the lowest expense ratios -- and your chances of running through your dough within 30 years may decline almost by half.

25 Best Places to Retire

There's no guarantee that you'll be able to duplicate these results exactly. That's because even though lower-cost investments do generally lead to higher returns, you can't be certain of getting a full percentage point in extra gain for each percentage-point reduction in expenses. So your results will depend, among other things, on the return your investments earn net of fees.

But to whatever extent lower expenses boosts your returns, your savings are likely to last longer at any given withdrawal rate. And that's a big deal in retirement, when the last thing you want to do is run out of money before you run out of time.

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Retirement IRA investing

WINNIPEG , March 28, 2012 /CNW/ - The Great-West Life Assurance Company commends the Quebec government for its proposed voluntary retirement savings plan (VRSP), the province's version of the federal pooled registered pension plan (PRPP) initiative, now in its third reading in Parliament.

"The VRSP offers a strategic framework for other Canadian provinces as they develop their own PRPP legislation," says Bill Kyle , Executive Vice-President, Wealth Management at Great-West Life. "We encourage all provincial governments in their efforts to help Canadians achieve retirement income adequacy by incorporating universal access, auto enrolment, auto escalation and locking in of contributions."

"The Quebec government's commitment to provide universal pension access to Quebec workers is critically important to the VRSP's success in Quebec ," Kyle says. "This same commitment to universal access will be key to making the PRPP a success in other provinces across Canada ."

VRSPs are expected to benefit Quebec workers by providing a plan structure to pool smaller employers' assets to allow these plans to benefit from economies of scale.

According to the proposal, which must still be passed into law, VRSPs will offer mechanisms to address issues identified as central to the retirement reform debate in Canada without disturbing existing employer-sponsored retirement plans. These mechanisms include:

As a leading provider of group retirement services for Canadians, Great West Life currently provides services to nearly 6,000 companies with five to 99 members. Great-West Life's experience will provide employers with a program that is easy to implement and administer - freeing them to focus on their day-to-day businesses.

About Great-West Life Great-West Life administers over 17,000 group retirement plans and over 1.2 million member accounts, representing nearly 30 per cent of capital accumulation plans (CAPs) in Canada . In the United States , Great-West is the fourth-largest group retirement plan recordkeeper based on total participants and Putnam Investments adds to the organization's North American presence in this market.

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Quebec's proposed voluntary retirement savings plan offers a strategic framework for other provincial plans

People who have money left over after they fund their lifestyle and save the necessary amount for retirement every month often wonder what they should do next. Many people who ask me for advice about what to do with their extra income are trying to seek approval for their desire to inflate their lifestyle. Instead, I give them this checklist of things to consider before they start spending more:

Keep saving. Unless you came into a huge windfall, you probably don't have enough assets to say that you are saving too much. There are way too many unknowns to accurately say that you are saving too much for your future. There could be changes in your marital status, a growing family, a need to support your family financially, a dive in investment performance, and decades of inflation, just to name a few of the things that could disrupt your savings plan. During the first two decades of your working life, the best thing you can do for your financial life is to save as much as you can live with.

Reconsider your assumptions. Seriously think about whether you are really comfortable with what you've already accumulated for retirement. You can't assume that your income will grow consistently all the way until you are 65. You should stress test your retirement plan to see if your assumptions are really solid. What if you are laid off and don't have income for a year? What if your parents need financial support? Make sure you include the possibility of financial shocks in your retirement plan.

Consider lowering your risks. If you have an extra savings cushion, you might want to reduce the risks that you are taking with your investments. By owning more bonds instead of stocks, you are limiting your maximum upside, but you can also drastically lower the chances that an unpredictable economic event can ruin your financial cushion.

Buy an annuity. Another possibility is to buy a few annuities that guarantee payments for the rest of your life. Although some annuities have high costs, knowing that a check will always arrive like clockwork can help relieve financial stress, which is ultimately what comfortable living is all about.

Spend less time working. Instead of buying more stuff, you could spend less time working and gain more time to do what you actually enjoy. Many people in our society work long hours just to pay for their stuff, which is such a stressful way to live. If you've already saved enough for retirement, it's time to develop interests outside of your finances.

Spending more sounds great on the surface, but it's not always the best choice. Having more money than you know what exactly to do with is a great problem to have, but you shouldn't waste the opportunity to ultimately make your life better.

David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. He likes to share simple changes that anyone can make, such as picking the best online savings account and figuring out whether a 0 percent balance transfer credit card makes sense.

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What to Do Once You Are on Track for Retirement

For many people, the idea of retirement elicits visions of a never-ending vacation, with the retiree choosing to do what they want to do, whenever they want to. But, the reality is that is not the case for a growing number of individuals; as many find that they have no choice but to work during what many consider 'retirement years.' If you find yourself forced to have a working-retirement, or even if you choose to work during retirement even when you don't have to, you might find the following tips helpful.

Convert Hobbies to Income Producing BusinessesYou are likely to be more accepting of having to work during retirement, if you enjoy your job. One way to do so is to convert hobbies that you enjoy into money making ventures. Some relatively inexpensive hobbies that have significant earning potential are: photography, art, pottery and gardening. One thing that you should keep in mind is that some of these hobbies will be time consuming, so make sure that you can manage your time efficiently to allow time to enjoy your retirement experience.

Stay Current with TechnologyTechnology is rapidly changing and employers are adapting by modifying business practices to benefit from these changes. If you fall behind in your knowledge and experience of how basic technology works, that could make it difficult for you to compete with other job seekers. If you are unable to afford to pay for courses, check out your local library or government institutions that offer education support for adults. Some libraries offer basic computer training as part of their community programs, and some government agencies include adult education as part of their social services programs.

Note: If you decide to start your own business, visit websites like http://www.sba.gov to get tips on starting and operating a business.

Engage in Lifelong LearningOne way to increase and maintain your competition with other job seekers is to continue your education. The level of continuation depends of how much education you have already gained in the area that you want to work. If you are changing careers, it may take you longer to complete your education, but it may be worth it in the end. Your options include technical and computer courses and general education. Many of these can be completed after hours if necessary, as well as during the daytime. If you decide to pursue this option, check to determine whether you are eligible for financial aid, which include student loans and grants.

Learn Industry JargonConvincing a potential employer that you are familiar with the job for which you are applying may require 'speaking the language' of the job. For example, if you are looking for a job as an accountant, make sure you know what terms like 'capital accounts,' 'general ledger' and subsidiary accounts mean. Being familiar with the jargon helps you to effectively engage in discussions, and explain why you are the perfect hire for the role.

Stay in ShapeAnother thing to keep in mind is your physical health. When you are retired, it's very easy to fall out of shape if you become inactive, which can cause lethargy and might cause others to perceive you as being lazy. Staying active helps to increase your energy level, and helps you to be productive. Your energy level could determine your ability to 'get the job done' efficiently and effectively, which may determine whether you keep the job you get.

The Bottom Line While you may feel the need to take on a few responsibilities in order to give yourself that extra retirement income that you need, you should always consider the fact that you are retired and make sure that you make time to enjoy your retirement years. If you feel that you don't have enough post retirement income to achieve your desired lifestyle, and must therefore continue working, take the steps to ensure that you are qualified to get the job that you want. They key is to maintain a balance, so that you can enjoy your retirement as much as reasonably possible.

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5 Steps To Embracing A Working Retirement