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Planning for Retirement (Part 1)

Back in April, the Financial Sense Newshour produced a series of program segments devoted to the issue of retirement planning.

Today we're going to look at the first installment of FSN's retirement special, and guide you to the archived broadcast link and a written transcript of this program.

But first, a quick overview. Why is retirement such an important topic?

Retirement is currently a very big issue not only in America, but in other developed nations as well. These countries face a demographic overhang of "baby boomers" facing retirement, and there is no shortage of news stories and articles covering this trend.

How will these nations deal with the structural changes taking place as a result of this mass retirement? Are individuals in North America, Europe, and Japan ready for this shift? Are Americans better prepared or less prepared for retirement than their counterparts in other nations?

A recent Financial Post article entitled, "Ill-prepared spendthrifts", speaks to some of these questions. Excerpt:

"Being ill-prepared for retirement appears to be a global phenomenon. The largest global retirement study of its kind, released yesterday by HSBC Insurance, has identified an entire demographic cohort it calls the "IP" generation -- as in Ill Prepared for Retirement.

Failure to prepare for retirement is directly related to overspending and low savings rates, says University of Virginia business professor Ronald Wilcox, author of Whatever Happened to Thrift? [Yale University Press, 2008].

He says North American savings rates of negative 1% are lower than the plus 2% of the United Kingdom, or the 10%-plus of Germany and France, and even higher savings rates in Asia. He suggests the failure of profligate North American Baby Boomers to save means they will eventually pressure governments to introduce "measures that transfer wealth from the people who have saved responsibly to those who have not."

"The U. S. really sticks out," Wilcox said yesterday, "American citizens are less prepared to shoulder their burden relative to their counterparts in other developed nations."

Unfortunately, this seems to be a global phenomenon. High taxes and low savings levels in many developed nations have left a large number of Boomers ill-prepared and desperate to implement tax-thy-neighbor policies for transference of wealth (government-sponsored theft).

Keep your eyes and ears open to this, as wealth transfer and onerous taxation are key themes for the future, and all these things are discussed in the Financial Sense Newshour retirement programs.

Now let's get started with Part 1 of the Planning for Retirement series.

In the intro to the first part of this program series, FSN hosts Jim Puplava and John Loeffler discuss the differences in retirement for baby boomers, as compared to that of preceding generations.

"Now, you look at our generation. Both you and I are boomers, John. We didn't -- well, I have had my own business now for almost three decades but other than that, most boomers have had three or four, five job changes, maybe two or three career changes in the sense that you may have started out in one field, you moved over to another field.

The pension systems changed in this company. Companies downsized as the country changed from a manufacturing to a service to a financial economy, so a lot of these structural changes in the economy have taken place. And now, you have the largest population in US history heading into retirement. That's going to have a profound change, I think, both economically and in the financial markets."

Jim and John follow up their discussion on the changing face of retirement with an overview of some important considerations for retiring individuals.

There's a lot of ground covered here in the opening segment of this series, from some very straight talk on Social Security and Medicare, to inflation and the expected rising costs for food, services, health care. You might find some very worthwhile insights here.

Listen to the FSN "Planning for Retirement - Part 1" program.

Tune in tomorrow for Part 2. See you then!

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