Saturday, September 27, 2008

The New Retirement - Retire at 70, 80, or 90

The turmoil in the financial industry and markets in recent days has caused serious anxiety among retirees or near-retirees, as they have seen their savings plummet in recent days, The Wall Street Journal reports.

Either they are now planning to stay in the workforce longer, or they are-in many cases, reluctantly-looking to get back to work.

As many financial planners put it, it's a brand new reality for an entire generation of Baby Boomers.

And it's no wonder, a startling 59 percent of workers age 55 or older have less than $100,000 in savings and investments, excluding the value of their home, according to the Employee Benefit Research Institute. Another 18 percent have between $100,000 and $249,999, and only 23 percent have $250,000 or more.

Many people who were looking to retire in the near future are now expecting to work until they are 70, 80, or 90. reported the inquiries into its online resume writing service doubled in the past week, with visitors saying they need to return to the workforce due to the economy.

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Friday, September 19, 2008

The New Retirement for Baby Boomers - Going Bust and Not Being Able to Retire

It never ceases to amaze me how most people are fools with their money. A recent report confirms my suspicions that baby boomers are just as irresponsible with their money and act on their short-term interests. Very short, term interest. Just like most young people today, instant gratification takes too long.
Homeowners' behavior during the recent housing boom in the U.S. left American soon-to-be retirees in worse shape approaching retirement, because a house accounts for half of the property and financial wealth of the typical household approaching retirement age, according to the Center for Retirement Research at Boston College.

Alicia Munnell, the center's director, looked into how the housing bubble affected retirement security in a recent report with Mauricio Soto, a research economist at the center.

Here are some key findings of the report, released this month:
    • Many households reacted to the gain in housing prices by taking money out and increasing their debt. The center estimates that households extracted about $1.2 trillion of their home equity during the boom from 2001-06.

    • Total debt rose to 120 percent of disposable personal income in 2007 from about 80 percent in the early 1990s, according to government data.

    • With most of their family responsibilities out of the way, households headed by homeowners older than 50 were more likely to take out home equity. All told, homeowners 50 to 62 years old took out about $380 billion from their primary residences and posted expenses of $149 billion, based on government data from the Federal Reserve System and the Case-Shiller Home Price Index.

    • Homeowners with children were more likely to tap into their home equity, possibly to pay education and other expenses.

    • Homeowners said they spent 10.5 percent of what they took out from their primary homes on expenses, including personal spending and repayment of credit-card debt; 23.5 percent to pay off past debts; 32.2 percent for home improvement; and 33.8 percent for investment in the stock market, real estate or business.

    • For a typical homeowner nearing retirement (ages 50 to 62 in 2004), the gains in housing equity were nearly offset by additional spending. Their household net worth fell by an estimated $6,900, or 14 percent.
The report found that people increased mortgage debt by $1.2 trillion during the housing boom and increased consumption by $410 billion.

As I have said before, 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. Fact is, your most valuable asset is actually your ability to earn an income.

Your enhanced earning power that comes from your superior skills and knowledge should be part of overall retirement plan. 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.


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Saturday, September 13, 2008

The Best Places to Retire for Retirees Looking for a Retirement Home

In the midst of a recession, America’s baby boomers may be looking for some of the best places to retire in the US.

A list of most affordable places for retirees has just been released by the US the Bureau of Labor and Statistics, with Columbus, Ohio topping the list of where to retire if housing and living costs are a consideration. This college town has reasonably priced housing relative to income and a 4.5 percent inflation rate.

Dallas and Houston in Texas have been ranked second and fourth respectively, offering warm climate and growing economies. Minneapolis, Minnesota ranked third.

See Retirement Quotes about The Best Places to Retire to keep things in proper perspective:

Friday, September 5, 2008

Retirees May Resist Moving to a Smaller Retirement Home

More than 78 million baby boomers are approaching retirement, and, while most will likely decide to stay in their present houses or homre, some will be relocating.

"For many people 55 and older," reports Associated Press reporter Adrian Sainz in an article in
Forbes, "making the decision to move from a house into a smaller apartment, condo, assisted-living facility or nursing home can be a source of stress, apprehension and fear."

"It's overwhelming for both sides, both physically and mentally," added Nan Hayes, president of, one of many Web sites which helps seniors find relocation resources.

"Apparently age makes it difficult to maintain a single-family home. Other times, financial circumstances, the desire to be closer to family, health issues, a spouse's death or other crises force a move, requiring emotional decisions by seniors and their adult children," wrote

There are a few quotes at
Retirement Quotes about Where to Retire to things in proper perspective: