TORONTO, ONTARIO--(Marketwire - Oct 31, 2012) - The BMO Retirement Institute today issued a report which found that, while Canadians'' top financial goal to achieve over the course of their lifetime is to live comfortably in retirement, many are not confident that they will save enough to achieve this. As a result, one-third of Boomers will or plan to sell their home to help fund their retirement.

The report, Home Sweet Home or Retirement Nest Egg?, examines the relationship between Canadians'' readiness for retirement and their attitudes regarding home ownership:

"The reliance on home equity to fund retirement is no surprise, given that almost half of Canadians say that their home is their biggest financial asset and, on average, accounts for half of their total net worth," said Marlena Pospiech, Retirement Strategist, BMO Retirement Institute. "While it is true that, in the past, Canadians have enjoyed a stable housing market and increasing real estate values, there is no guarantee that this trend will continue.As a result, individuals shouldn''t count exclusively on their homes to fund their retirement and should be focused on building up their personal retirement savings."

According to the report, one-third of Boomers who intend to sell or have sold their home will or have done so to supplement their income in retirement.

Boomers may face a number of challenges when deciding whether to stay in their home or to sell it and downsize.

Market fluctuations: The majority (87 per cent) of Boomers have seen their homes rise in value; nearly half report gains of 50 per cent or more. But, considering the rapidly aging Canadian population, and more Boomers retiring and selling their houses, home prices could fall.

Attitudes toward home ownership: Canadians are torn between holding on to their "castle" vs. treating it as a retirement asset. According to the report, 45 per cent of homeowners do not intend to sell their home, and 34 per cent are unsure if they will sell it prior to or during retirement.

Lending standards: Should they materialize, tighter lending policies and the risk of higher interest rates could reduce the number of eligible homebuyers and motivate people to buy smaller, less expensive houses. In fact, they may lead to people not buying a home at all, which could impact the housing market.

Carrying mortgage and debt into retirement: Recent survey data suggests that many Boomers are carrying mortgages or other debt into retirement.Consequently, Boomers may not have accumulated as much home equity as they would like and may be more vulnerable to an increase in interest rates.

"If your retirement is only a few years away, it is wise to try and pay off your mortgage before you enter retirement," said Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "On the other end of the spectrum, for younger Canadians entering homeownership, it''s important to consider options that will ensure mortgage debt can be paid down faster and well before their retirement years."

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REPEAT-BMO Retirement Institute Report: Canadians Should Not Rely on Their Homes to Help Fund Retirement

Are you within a few years of retirement? It's time to get your financial house in order. Here are five must-do items to take care of now.

Take a look at all of your company benefits. Your 401(k) might be your biggest benefit, but there may be others. Can you continue medical or other insurance? Are there other benefits that you can continue at reduced group rates? In the case of your 401(k), you need to determine if you want to leave it with your soon-to-be-former employer, roll it into an IRA, or take a distribution. The last choice will likely result in a hefty tax bill, so this is generally not a good idea for most folks. Do you have company stock options that you haven't exercised? Check the rules here. Speaking of company stock, there are special rules called net unrealized appreciation to consider when dealing with company stock held in your 401(k).

Take a look at any pensions from current or former employers. Depending upon the rules of the plan, you may have several decisions to make with regard to your pension benefit if you are covered by one. Do you take the benefit immediately upon retirement, or wait? This will depend upon the plan rules and your need for the money. In some plans the benefit may be greater if you wait until age 65. Additionally, some plans allow you the choice of taking an annuitized lifetime benefit (a monthly check) or taking a lump-sum payout. This decision should be made in the context of your overall financial situation and your ability to effectively manage a lump sum. Also, as this lump sum would be taxable, it is generally advisable for you to roll it over into a tax-deferred account such as an IRA. Lastly, if you have earned a pension benefit from a former employer, be sure to contact your old company to get all of the details and to make sure they have your current address and contact information.

Determine your Social Security benefits. The main decision is when to start taking your benefit. While you can start at age 62, there is a significant reduction versus waiting until your full retirement age. Further, if you wait until after full retirement age your benefit increase until age 70. If you are married the planning should involve both spouses' benefits. There are a number of sophisticated strategies surrounding couples and whose benefits to take when so planning can payoff for you here.

Take stock of all of your retirement financial resources. Many pre-retirees suffer from financial clutter. They have several old retirement plans from previous employers in IRAs or still in an account in the old plan. Their spouse has several old retirement plans. They each have a 401(k) with their current employer. There might be IRAs, a variable annuity, taxable investments, stocks, bonds, mutual funds, etc. There is a lot of financial "stuff" but it isn't organized into a coherent portfolio. It is vital that you take the steps to consolidate accounts and to get a handle on what you have and how and where it is invested.

Determine how much you will need from all sources to support your retirement lifestyle and compare this with your projected retirement income. While this might seem intuitive you'd be surprised how many pre-retirees within a few years of retirement haven't done this. Specifically look at your Social Security, any pension payments, any part-time income from work, consulting, etc. Compare these with the amount that you project that you will need to support your lifestyle on a monthly basis to determine how much you need to take from your various investment accounts, both taxable and tax-deferred (IRAs, etc.). If this gap amounts to more than 4 percent of your nest egg (as a quick rule of thumb) you may need to reassess your lifestyle needs or possibly plan on working a bit longer.

This is a very cursory "checklist" for pre-retirees within a few years or less of retirement. This might be a good point to engage the services of a fee-only financial advisor if you've never done a financial plan, or if your plan is out of date. Retirement can be a great stage of life, but proper planning is required to help ensure your success.

Roger Wohlner, CFP, is a fee-only financial adviser at Asset Strategy Consultants based in Arlington Heights, Ill., where he provides advice to individual clients, retirement plan sponsors, foundations, and endowments. Read more about Roger here.

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Nearing Retirement? 5 Must-Do Steps

TORONTO, ONTARIO--(Marketwire - Oct 31, 2012) - The BMO Retirement Institute today issued a report which found that, while Canadians'' top financial goal to achieve over the course of their lifetime is to live comfortably in retirement, many are not confident that they will save enough to achieve this. As a result, one-third of Boomers will or plan to sell their home to help fund their retirement.

The report, Home Sweet Home or Retirement Nest Egg?, examines the relationship between Canadians'' readiness for retirement and their attitudes regarding home ownership:

"The reliance on home equity to fund retirement is no surprise, given that almost half of Canadians say that their home is their biggest financial asset and, on average, accounts for half of their total net worth," said Marlena Pospiech, Retirement Strategist, BMO Retirement Institute. "While it is true that, in the past, Canadians have enjoyed a stable housing market and increasing real estate values, there is no guarantee that this trend will continue.As a result, individuals shouldn''t count exclusively on their homes to fund their retirement and should be focused on building up their personal retirement savings."

According to the report, one-third of Boomers who intend to sell or have sold their home will or have done so to supplement their income in retirement.

Boomers may face a number of challenges when deciding whether to stay in their home or to sell it and downsize.

Market fluctuations: The majority (87 per cent) of Boomers have seen their homes rise in value; nearly half report gains of 50 per cent or more. But, considering the rapidly aging Canadian population, and more Boomers retiring and selling their houses, home prices could fall.

Attitudes toward home ownership: Canadians are torn between holding on to their "castle" vs. treating it as a retirement asset. According to the report, 45 per cent of homeowners do not intend to sell their home, and 34 per cent are unsure if they will sell it prior to or during retirement.

Lending standards: Should they materialize, tighter lending policies and the risk of higher interest rates could reduce the number of eligible homebuyers and motivate people to buy smaller, less expensive houses. In fact, they may lead to people not buying a home at all, which could impact the housing market.

Carrying mortgage and debt into retirement: Recent survey data suggests that many Boomers are carrying mortgages or other debt into retirement.Consequently, Boomers may not have accumulated as much home equity as they would like and may be more vulnerable to an increase in interest rates.

"If your retirement is only a few years away, it is wise to try and pay off your mortgage before you enter retirement," said Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "On the other end of the spectrum, for younger Canadians entering homeownership, it''s important to consider options that will ensure mortgage debt can be paid down faster and well before their retirement years."

Read more here:
BMO Retirement Institute Report: Canadians Should Not Rely on Their Homes to Help Fund Retirement

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

23-10-2012 06:38 http Find out the retirement secret that every baby boomer must know. Find out the 401k and retirement secrets that Wall Street doesn't want you to know about. Finally, uncover the secrets of lifetime retirement income that thousands of wise consumers have uncovered and seen life changing results from.

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Savior Retirement | Savior Retirement Book - Video

Video Link: https://www.youtube.com/watch?v=lt3Xfnavlpk

25-10-2012 20:01 ESPN New York's Andrew Marchand discusses the possibility of Mariano Rivera's retirement as well as options for the Yankees if he decides not to come back.

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Mariano Rivera Thinking Retirement - Video

Three-fourths of middle-class Americans say their estimate of what they'll need to live on in retirement is based on "some sort of guess," a new survey finds.

And those guesses often appear off the mark, according to the annual Wells Fargo Retirement Survey. For instance, middle-class Americans say they believe the median cost of their out-of-pocket health care costs in retirement will be $47,000. But the Center for Retirement Research estimates a typical couple at age 65 can expect to spend $260,000 or more over the rest of their lives.

Further, when asked what percentage of their nest egg they expect to withdraw annually in retirement, the median-or typical - withdrawal predicted by middle-class Americans is 10 percent. But most experts recommend annual withdrawals of 3 to 4 percent.

In addition, middle-class Americans say they'll need a median of $300,000 to support themselves in retirement -- but to date have saved only $25,000.

The survey also found that 34 percent of middle-class Americans estimate that their retirement income will be half their current annual income, or less. The median household income for Americans was roughly $50,000 last year, so that means many are planning on living on $25,000.

"Clearly, the guessing doesn't work," said Laurie Nordquist, a director of institutional retirement and trust services at Wells Fargo. The survey findings suggest that many consumers are too focused on paying day-to-day bills to spend more time on retirement planning, she said, even though that's clearly warranted.

Harris Interactive Inc. conducted the telephone survey of 1,000 middle-class adults from July 9 through Sept. 12. To aim at the middle class, participants fell within specified income and wealth brackets. For example, those between the ages of 30 and 75 had 2011 household income of $50,000 to $99,999, and assets of $25,000 to $99,999 that could be invested.

Have you done detailed calculations of your financial needs in retirement, or are you, too, playing the guessing game?

More From NY Times

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Many in Middle Class 'Guess' on Retirement Needs

As they struggle to save for retirement, a growing number of middle-class Americans plan to postpone their golden years until they are in their 80's.

Nearly one-third, or 30%, now plan to work until they are 80 or older -- up from 25% a year ago, according to a Wells Fargo survey of 1,000 adults with income less than $100,000.

"It is so tough for Americans to save for retirement that the answer seems to be to work longer," said Joe Ready, director of Wells Fargo Institutional Retirement and Trust.

Overall, 70% of respondents plan to work during retirement, many of whom plan to do so because they simply won't be able to afford to retire full time.

But working well into your 70's, 80's or even 90's, isn't always realistic, said Ready. Nearly three-quarters of those who plan to work into their 80's say their employer won't want them working when they're that old, for example. Other roadblocks, like health issues, could arise as well.

Those who are unable to work as long as they intend could therefore face a very grim reality. In fact, more than one-third of Americans could wind up living at or near poverty in retirement, the survey found.

About 34% of middle-class Americans expect their retirement income to be 50% or less of their current annual income. Given Census Bureau data showing a median household income of $50,054 in 2011, this would mean living on roughly $25,000 or less per year -- which is near the poverty line for a family of four, the report found.

Retirement saving on the backburner: Half of middle-class Americans report that their most pressing financial concern is paying their monthly bills, up from 37% a year ago. Saving for retirement is second on the list.

Respondents also said that home remodeling and vacation planning have taken precedence over saving for retirement over the past 12 months.

As a result, there's a huge disparity between what people need and what they have saved. While respondents said they will need a median of $300,000 in total savings to support themselves in retirement, the average amount saved is only $25,000.

Originally posted here:
More Americans Delaying Retirement Until Age 80

NEW YORK--(BUSINESS WIRE)--

BlackRock, Inc. (BLK) today launched a new digital retirement center to coincide with the congressionally-sanctioned National Save for Retirement Week, which runs from October 21 through 27. Individuals are encouraged to visit The BlackRock Retirement Center to access insights, resources and tools at http://www.blackrock.com/retirement.

The BlackRock Retirement Center features practical and relevant age-based content and insights to help individuals better prepare for retirement in what BlackRock has called a New World of Investing, in which yields are low, markets are volatile and confidence is scarce. The age-based content assists investors with defining needs, identifying goals and providing actionable steps when saving and investing for or during their retirement.

The launch coincides with BlackRocks observation of National Save for Retirement Week a national event sanctioned by Congress to promote retirement savings among Americans and to encourage employees to participate in their employer-sponsored retirement plans.

One of the most important human achievements of our time is people are living longer, said Robert Kapito, President of BlackRock. But we cannot continue to allow the blessing of longer lifespans to become a burden - safeguarding financially secure retirements is the defining challenge of our society.

BlackRock Investor Watch a nationwide survey fielded in September, found many respondents to be more concerned than ever before about retirement planning and they are taking action. The survey found that 70 percent of investors are initiating conversations with their financial advisors about retirement. The complete set of findings from BlackRock Investor Watch will be released in the coming weeks.

At BlackRock we feel an enormous responsibility to the investors we serve, Mr. Kapito said. Of the $3.6 trillion in assets under BlackRocks management, two-thirds are in some way related to retirement. Behind the pension funds and 401ks we manage, and the mutual funds and ETFs we sell are real people facing real challenges, and they are depending on those assets. They are firefighters, teachers, parents and students and all of them are or will be retirees.

With the launch of the retirement center, we hope to reach people of all ages who can benefit from our insights and digital resources. When it comes to retirement savings, no action is too small; however, starting early is a critical factor in building retirement income over time.

To highlight the people that BlackRock serves, the Company is also launching today advertisements in the United States emphasizing the importance of providing secure retirements for those who protect, teach and serve Americans nationwide.

Features of the BlackRock Retirement Center

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BlackRock Launches New Digital Retirement Center

Current workers who are planning for retirement often envision retirement as something very different from what current retirees are actually experiencing. A recent BlackRock and Boston Research Group poll of 1,002 workers with retirement accounts at work and 1,035 retirees who previously participated in a 401(k) or similar type of retirement plan found that workers are expecting to pay for and experience retirement in a way that contrasts with the lifestyle of current retirees. Here's a look at how current workers are planning to remake retirement:

Aiming for a later retirement age. Many current workers plan to stay on the job until their mid or late 60s. Some 48 percent of workers think they will retire at age 64 or later. Another 17 percent of workers surveyed think they will never retire due to their finances or personal preferences. "They are much less confident of their ability to actually amass the dollars they need to retire," says Warren Cormier, president of Boston Research Group. "I don't know if its pessimism or realism. They are not as far along in the path toward retirement as they had hoped." Only 19 percent of current retirees were able and willing to work until age 64 or later. Job loss, health problems, or family circumstances often push people into retirement ahead of schedule. While only 11 percent of current workers plan to retire before age 60, 42 percent of current retirees left their jobs before reaching their 60s.

[See the Best Places to Retire for Under $40,000.]

Planning on working in retirement. Only 15 percent of current workers envision a retirement that involves not working at all. Most workers would like their retirement to include volunteer work (36 percent), paid employment even though they won't need the money (34 percent), or working out of necessity (15 percent). "Working a few more years really lessens the amount you will need in retirement," says Chip Castille, head of BlackRock's U.S. and Canada Defined Contribution Group. "As we move into a retirement system that relies more on defined-contribution than defined-benefit plans, people are realizing they may need to work a little bit longer." Most of the retirees surveyed (86 percent) don't receive any income from employment. And planning to work in retirement doesn't mean you will be able to find a job or will still want to work or be able to work in your late 60s.

[Read: New Retirees: Avoid These Mistakes.]

Depending on a 401(k) to fund retirement. Almost half of workers (48 percent) expect their 401(k) or 403(b) plan to be their largest source of monthly income in retirement. Most workers (75 percent) expect to begin drawing down their 401(k) at age 65 or later. But only 15 percent of retirees get 25 percent or more of their retirement income from their 401(k) and similar types of savings and investment accounts, even though all the retirees in the survey participated in a retirement account while they were working. "The current retirees take a vast portion of their income from secure income sources such as Social Security and legacy defined-benefit plans and they are secure in their concept of receiving Social Security," says Cormier. "People who are actively working today don't have a defined-benefit plan available to them. The only thing they have left to expect is a defined-contribution plan. It's a completely different mix of what is available to them to pay expenses in retirement." The more retirement income sources you have, the better protected you will be if something goes wrong with any one of them.

[Read: 10 Things You Should Know About Your 401(k) Plan.]

Saving for a shorter period of retirement. Most workers (61 percent) think their savings or investments will need to last for between 20 and 29 years. Only a quarter of the employees surveyed think their retirement savings and investments will need to last for 30 or more years. But what if you end up living until 100? Most retirees (52 percent) think their savings needs to last for 30 or more years after retirement. "Current workers tend to underestimate how long they are going to live and retirees have a better idea," says Castille. "Retirees have actually gone through the exercise of creating a budget."

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How Retirement Expectations Differ From Reality

Happy "National Save for Retirement Week"! Retirement has become such a hot issue, that the Senate passed a Resolution "with the goal of increasing the retirement savings and personal financial literacy of all people in the United States." To help further the Senate's cause, here are the steps you need to take to get your retirement plan on track.

What are the core components to every retirement plan?

1. Determine how much money you spend. Whether you use a software program (Quicken), an app (Mint.com), a spreadsheet or an old-fashioned legal pad, it's nearly impossible to build a retirement plan without determining how much money is coming in and going out these days.

2. Pay down outstanding consumer debt. This includes credit cards, auto loans, etc., but not mortgage debt.

3. Establish an emergency cash (or cash equivalent) reserve fund of 6-12 months of expenses (1-2 years if you are in, or within two years, of retirement).

4. Crunch your retirement numbers: use an online retirement calculator like EBRI's Choose to Save Ballpark E$timate to determine where you currently stand. To be conservative, use 4 to 4.5 percent for an inflation assumption; for rate of investment return, use 4-6 percent; for life expectancy, use 95 if you are younger than 50, and use 90 if you are over 50 (for a more precise estimate, go to http://www.livingto100.com and use their Life Expectancy Calculator.) You can also go to the Social Security estimator to review your future benefit.

With those steps completed, let's break down the next steps by age.

5. Under 25: About two-thirds of those who earned bachelor's degrees last year graduated with student loan debt and of those, the average amount of debt is about $26,500. With that burden, combined with a tough job market, it's hard to help young workers focus on retirement. If you are fortunate enough to have a job, now is the time to begin the habit of saving for retirement. The goal is to contribute an amount that will allow you to qualify for your employer's match into its retirement plan. For many, this will be 6 percent of salary.

6. Ages 25-40: Those college years are fading fast and now its time to increase retirement contributions to at least 10 percent of income. There will always be competing goals during these years, like saving for a house down payment or putting away college money for your own kids, but these should occur after your own retirement contribution or simultaneously, if you can afford to do so. Securing your own financial future is paramount in these years.

7. Ages 40-55: Hopefully, you are entering your prime earning years, which means that your retirement contributions should be increasing to 15 percent or more. The contribution limit for 401 (k) plans will increase by $500 to $17,500 next year and if you are 50 or over, the catch-up contribution level is $5,500.

Read more from the original source:
The 9-step retirement plan