Retirement GPS

Securian Financial Group has developed a Retirement GPS to help Baby Boomers map their retirement journey.

The GPS breaks retirement into three stages:

• Gearing up: The first phase includes the last few years of full-time employment and the first few years of retirement. This is when people are thinking hard about how to structure their retirement income or make up a shortfall.
• Taking off: This is the most exciting period of retirement, when people dive into the activities they didn't have time for when they were fully employed. Though the retirement income strategy has been fully developed, this is the time for adjustments as people establish their retirement lifestyles.
• Cruise control: Late retirement is when life quiets and medical issues come to the fore. By this time, personal directives are in place, and people make decisions about the inheritance or charitable legacy they will leave and take steps to ensure their heirs receive it intact.

The Piggy Bank Index

CD Howe Institute and the Bank of Canada have developed the Piggy Bank Index: Matching Canadians' Saving Rates to Their Retirement Dreams. The study concluded Canadians needed to set aside 10 to 21 per cent of their pre-tax earnings every year for 35 years to replace 70 per cent of the pre-retirement income at retirement at age 65.

Another reality: Statistics Canada reports that in any given year, only about 35 per cent of income-earning Canadians are saving for retirement.

Impact of Delayed Retirement on Social Security and Medicare Systems

An unprecedented upturn in the number of older Americans who delay retirement is likely to accelerate over the next two decades. That trend should help ease the financial challenges facing both Social Security and Medicare, according to a new RAND Corporation study. Longer work lives for many Americans will help to ease that imbalance and the financial stress it puts on Social Security and Medicare.

An Elder Faculty

Between 7 and 9 percent of the faculties at private research universities are now over 70, well past traditional retirement age, according to the Chronicle of Higher Education.

In a 2007 survey of colleges and universities conducted by the American Association of University Professors, only 19 percent of institutions felt that the retirement of older professors was an important institutional matter whereas 96 percent of institutions considered recruiting new professors important.

Mismatch between Employee and Employer Goals in Canada

Canada has seven million workers on the cusp of retirement age. But a poll from Royal  Bank of Canada has found that most Canadians would like to work past age 65. Among respondents, 63 per cent said they would like to ease into retirement or stay employed beyond their retirement date and 50 per cent said they would be interested in part-time work during the transition. Not a good fit with the realities of the workplace, for only 33 per cent of employers said they would be very likely to allow workers to stay past their “hard-stop” dates.

Five Practical Reforms for Canada

The BMO Retirement Institute of Canada has released a report, Proposals To Improve The Flexibility Of RRSPs And RRIFs, recommending Canadians be given more control over their retirement savings to promote flexibility in managing them according to individual circumstances.

The report outlines five practical reforms:

1. The removal of age restrictions for Registered Retirement Savings Plans (RRSPs)
2. The reduction of taxes on Registered Retirement Income Fund (RRIF) withdrawals
3. The broadening of opportunities for tax-free RRSP/RRIF rollover on death
4. Lowering the rate of mandatory RRIF withdrawals
5. An increase to the maximum contribution limit for RRSPs

Affluent Insights

Bank of America has released findings from the latest Merrill Lynch Affluent Insights Quarterly, a survey of the financial priorities and concerns of affluent Americans.

Since the beginning of this year, this group has become slightly less concerned about the economy's impact on their ability to meet financial goals. Forty-nine percent currently express such concerns compared with 58 percent in October 2009. But despite declining economic worries, issues related to retirement and rising health care costs continue to rank highest among financial concerns. Among those who identified health care as a top concern (62 percent), more than half (56 percent) reported feeling unsure of how rising costs should factor into their retirement planning, up from 40 percent in January 2010. Hence, the number of survey respondents concerned about whether their assets will last throughout their lifetime rose from 53 to 61 percent during the last quarter.

Consistent with previous survey findings, affluent individuals over the age of 65 appear to be working longer and approaching retirement practically and altruistically – focusing most on spending more time with family and friends (67 percent). Interestingly, just as many in this age group plan to dedicate time to philanthropic endeavors as those who intend to spend more time traveling during their retirement years (45 percent in both cases).

According to a Bank of America official: "Our study continues to underscore an evolving approach to retirement, with many individuals choosing to remain active in their current careers, if only part-time, into their late 60s and 70s, pursuing dream jobs and devoting more time to charitable causes."

Affluent baby boomers ages 51-64 are the group most concerned about whether their assets will last throughout their lifetime (73 percent) and whether they will be able to live the lifestyle they had hoped to in retirement (61 percent). In fact, 40 percent of survey respondents in this age range expect to retire later than they did one year ago. monthly expenses across the family.

Individuals ages 35-50 echoed similar levels of longer-term concerns about health care, retirement lifestyle and income. Among all age groups, 35 to 50-year-olds face the greatest struggles with also balancing short-term financial priorities and concerns, such as funding their children's education (52 percent), and knowing how best to manage a proper cash flow and liquidity strategy (31 percent).

Younger affluent individuals ages 18-34 indicate they simply lack the financial education needed to make the best decisions early in life to maximize their long-term savings and investments. When asked what they find most challenging about retirement planning, 23 percent said "knowing where to begin" while 24 percent find "understanding various tax implications associated with different retirement savings vehicles" to be most challenging.

Holiday Retirement’s Good Cause

Holiday Retirement, a firm specializing in independent retirement, has donated $82,500 to the American Cancer Society raised during its inaugural Move for a Cure promotion. Holiday Retirement had pledged a donation to support the fight against cancer on behalf of each new move-in at any of its more than 300 communities.

Louisiana Justice

The retirement system for Louisiana state employees says it may be overpaying former the Southern University System President nearly $7,100 a month. Resolution is expected in court.

Mismatch between Retirees and Financial Advisors

Limra International has surveyed retirees and financial advisors on the risks of retirement and has found quite a dichotomy in the understanding of either group.

Retirees named health care as their top priority, followed by inflation, volatility and, lastly, longevity (how long their money will last).

In contrast, advisers ranked longevity as their top priority on behalf of clients, followed by volatility, health care and inflation.