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Boomers will redefine retirement with enormous energy and creativity. Many will work well beyond age 65 and mostly by choice, seeing this as a time for advance not decline, according to Dr. Sherry Cooper, Chief Economist, BMO Capital Markets in her new book released today, The New Retirement: How it will Change our Future.

“The boomer generation will be reaching traditional retirement age very soon and the enormous wave of boomer retirees will crest in 2025,” said Dr. Cooper. “With the dramatic rise in longevity, healthy goal-driven boomers will seek purposeful leisure – a time for regeneration, rejuvenation, and lower-stress contributions to society and their own personal wealth.”

Referring to her new book, Dr. Cooper notes that it is not a typical retirement-planning book nor is it a personal finance book. “This book looks at the optimal transition to late life and what it takes to achieve a successful final third of your life. I examine how we can prepare to give ourselves the best chance of physical and mental well-being as well as financial security. We can actually regenerate rather than degenerate,” she said.

The book focuses on a number of subjects related to retirement and includes the following key points on each:

The New Retirement

• Despite the inadequacy of many boomers' savings habits and the reduction in defined-benefit pension plans,surveys suggest that most boomers expect a comfortable retirement with sufficient funds.
• Most report that they would choose to work, at least part-time, in retirement.
• Labour shortages and rising healthful life expectancy will encourage boomers to work longer, helping to meet the financial demands of this “sandwich generation”.

The Generational Divide

• As children of the Depression and wartime, parents of boomers are more frugal than their children. Conversely, boomers grew up in times of economic bounty and represent huge buying power.
• Early boomers were the first in their generation to enter schools, the job market, and the housing market. They benefited from being the first in. Late boomers had very different life experiences and have found it tougher to amass wealth.

Health and Achievement

• The increase in longevity provides the opportunity for boomers to do so much more after age 60 than earlier generations did.
• Late-life can be active and pain-free. You can be accepting of natural physical and mental weakening, while enjoying the enhanced wisdom, selflessness, and peacefulness that aging can bring.
• Success in life varies from person to person, but it is much broader than simply success in work.
• Boomers have strived for self-actualization all their working lives. In retirement, they will do so by giving back and leaving a legacy.

Canadian Boomers in a Global Context

• Labour shortages will mount in the developed world – especially Canada – as aging boomers leave the workforce.
• Potential growth in advanced economies will slow unless the decline in the growth of the labour force can be offset by rising productivity growth, increased immigration of skilled workers, additional outsourcing, and later retirement for boomers.
• Productivity growth is essential to raising living standards. We need more appropriate corporate tax policies to encourage investment to boost productivity.

The Aging Population

• Large numbers of retirees will strain the pension and health-care systems in most industrial countries.
• Governments will be torn between the needs of boomers (health care, pensions, safety, public services) and those of young families (schools, highways, affordable housing, daycare). There could be significant conflict between age groups. This requires immediate action and planning.

Lifestyle and Health Planning

• Develop a lifestyle plan for retirement. It will help determine (and be determined by) how much income you will likely need (and have) in retirement. Develop this plan long before retirement and test it out – what you thought was ideal may not be so.
• Your health is paramount. Do what is best for your health and well-being. Make sure you have easy access to good health care.
• Stress is a killer, so is obesity. Premature illness and death can be mitigated by lifestyle and nutritional choices.
• The like between body and mind is well established. Healthful emotional development is a life-long process and adds life to your years as well as years to your life.

Dollars and Sense

• For the day you stop working, you may need more money than you think.
• Large nest eggs are required to cover the uncertainties of not knowing how long you will live, how large financial asset returns and inflation will be, or how much money you might need for unexpected but necessary expenditures.
• Rely on accredited experts with experience and references to devise your investment plan. Any consideration of financial issues should be discussed with a disinterested expert.

Have Boomers Saved Enough for Retirement?

• CPP will not be sufficient to ensure the maintenance of an affluent lifestyle. Increasingly fewer workers are covered by traditional defined benefit pension plans, as the cost to employers has risen sharply with the rise in life expectancy. These days, defined contribution plans like RRSPs are more the norm.
• Relatively affluent families must save significant amounts for their retirement security, some will need to save beyond the annual maximum contributions to their RRSPs.
• Investors should look at a diversified approach to income generation and inflation protection. A portfolio of at least 50 percent stocks (especially high-quality dividend-paying stocks) and 50 percent bonds has the best chance of achieving portfolio longevity.

How Much is Enough?

• As a rule of thumb, you will need a retirement nest egg of between 20 and 25 times the level of desired pre-tax annual income over and above the income from government and private pensions in order to generate the income you need.
• This is a conservative rule, allowing you to withdraw between 4 and 5 percent of your next egg in your first year of retirement. Each subsequent year, you can increase your withdrawal rate by the rate of inflation.

Health and Happiness

• A successful retirement for most people is to be physically and fiscally independent, to be active, and to have love and purpose in their lives.
• In the new retirement we will not settle for personal diminishment, social isolation, dependency, and inertia. We will remain active in mind and body, and most of us will continue to be productive well into our eighth decade.
• A positive attitude is much more than being unrealistically optimistic. The reality is that bad things will happen to all of us. Good coping or adapting skills are essential to successful aging.

The New Retirement: How it will Change our Future is a Viking Canada hardcover from Penguin Group (Canada), and is now on sale at major bookstores.

Comments about Dr. Cooper and the book:

“Sherry Cooper is a dynamo – bright, savvy – and literally redefines the way we view retirement and what lies ahead for us in this groundbreaking book.”
Don Tapscott, bestselling author of Wikinomics

“As expected, the estimable economist Sherry Cooper provides sage financial advice to baby boomers contemplating their retirement. But surprise: she also draws from the latest literature in psychology and gerontology to offer wise counsel on how boomers can live the second half of their adult lives productively and in good health. Turns out we don't have to be millionaires for the best years of our lives to be the ones ahead of us.”
Michael Adams, bestselling author and president of the Environics group of research and communications consulting companies

“With her usual combination of trenchant analysis and creative insight, Sherry Cooper draws a portrait that will redefine retirement and, indeed, society as we have come to know it.”
Allan Gregg, Chair, Harris/Decima Research

“As one would expect, Sherry's latest book is crisp, clear, focused, and laser-like in its ability to answer the questions that all of us had better start asking. The New Retirement offers just the kind of analysis and insight that both informs us and jolts us into taking action.”
Pamela Wallin

To hear directly from Dr. Cooper about her new book, visit BMO's retirement website at: www.bmo.com/retirementyourway to view a video podcast with Dr. Cooper and veteran journalist, Pamela Wallin. This episode is part of a podcast series BMO launched last year that examines the emerging issues facing Canadian boomers who are approaching retirement.

Dr. Cooper will be available for media interviews on the book in several Canadian cities over the coming weeks. If you would like to arrange an interview, please contact Peter Scott at BMO Financial Group or Debbie Gaudet at Penguin Group (contact information below). Dr. Cooper will be in the following cities:

• Wed. Jan. 16: Winnipeg, MB
• Thu. Jan. 17: Regina, SK
• Tue. Jan. 22: Ottawa, ON
• Wed. Jan. 23 – Thu. Jan. 24: Vancouver, BC
• Wed. Jan. 30: Edmonton, AB
• Thu. Jan. 31 – Fri. Feb. 1: Calgary, AB
• Wed. Feb. 6: Halifax, NS
• Fri. Feb. 15: Montreal, QC

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