Boomers Go Long, But are they Falling Short?

    BMO says Boomers Working Longer to Bolster Retirement Savings Need to Be
    Better Informed

    TORONTO, April 15 /CNW/ - According to a new research study from the BMO
Retirement Institute, there is a strong sentiment among Canadian Boomers that
setting retirement clocks back a few years may be the best option to secure a
steady income stream. And while the research indicates people are accepting of
this notion, many may be making this decision without having all the necessary
information.

    The study reveals:

    -   31 per cent of Canadians who plan to retire in the next 5 years are
        considering delaying their retirement date
    -   Retirees are also thinking about returning to work. For those that
        are considering it, 41 per cent definitely intend to return to paid
        work within the next year.
    -   More than two-thirds of respondents were accepting or happy about
        delaying retirement
    -   However, almost half of pre-retirees say they do not know how much
        they will receive from their personal savings and investments

    "Money is the main reason people are working longer or returning to work.
   Staying mentally active is of secondary importance, but money is by far the
top concern. However, many retirees and pre-retirees are making moves to
bolster retirement savings by working longer without a clear understanding of
their retirement income gap; the difference between how much is needed and how
much is available from various sources including personal savings, employer
and government benefits," said Tina Di Vito, Director, Retirement Strategies,
BMO Financial Group. Di Vito also heads up the BMO Retirement Institute, a
think tank set up by the Bank to provide leading perspectives around
retirement issues.

    How Much, How Long and in What Capacity?

    The study indicates that:

    -   Over 30 per cent say they do not know how much they will receive from
        the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP)
    -   In addition, 42 per cent of pre-retirees and 59 per cent of retirees
        say they have not spoken with their financial advisor about the
        potential impact that delaying retirement or working longer will have
        on their financial/retirement plan.

    "How Boomers choose to go about remaining or re-entering the workforce
will shape their retirement lifestyle and a financial advisor can provide a
realistic perspective on how such decisions impact income in retirement," said
Di Vito.
    "It is vital for Boomers to know where they stand financially and
understand the impact working longer will have on their savings so that they
can determine how long they need to continue to work, and in what capacity, to
achieve their personal retirement goals. In some cases, Boomers may discover
they need to work fewer years than anticipated to realistically meet their
retirement goals."

    Making an Informed Decision

    The BMO Retirement Institute has also just released a report Boomers
Revise their "Retire-By" Date as Financial Landscape Changes. This report
details various factors that should be considered so people can make an
educated assessment about working longer, including:

    -   Plan and Save - More burden of funding retirement has shifted to
        individuals and away from government and employers. So a combination
        of government and company pensions, personal savings, home equity and
        insurance products are necessary.
    -   Healthcare - Many future retirees have not set aside enough funds to
        deal with rising healthcare costs. It may be prudent to stay working
        to ensure continued healthcare benefits and look for companies that
        have a comprehensive benefits package.
    -   Inflation - Living longer puts pressure to save more and comes with
        other financial risks. Even a relatively low inflation rate of 3 per
        cent can significantly reduce purchasing power over a 20-30 year
        period.
    -   Withdrawals - withdrawing money during a period of declining markets
        can greatly reduce how long retirement savings will last. Instead,
        reducing withdrawals during the first few years of retirement, as a
        result of working longer, can significantly extend the duration of
        savings.

    BMO Financial Group offers a simple online calculator to help
pre-retirees and retirees get a clear understanding of how key variables such
as current age, life expectancy and style of investing can impact one's
retirement savings. For more information please visit:
www.bmo.com/RetirementCalculators

    About The BMO Retirement Institute

    The BMO Retirement Institute, launched in April 2008, provides insight
and financial strategies for those either planning for or in their retirement
years. The Institute was launched to help pre-retirees simplify the complex
dynamic between personal finances, personal relationships and retirement
lifestyles. (www.bmo.com/RetirementInstitute)

    About the BMO Retirement Institute Study

    A Harris/Decima online poll was conducted for the BMO Retirement
Institute between Feb. 26 and March 4, 2009 and is based on a sample size of
1,006 randomly selected retirees 55 years of age or older who indicated they
"definitely or probably will return to work" and pre-retirees who are planning
to retire in the next five years.

    Contact the BMO Retirement Institute at:
    bmo.retirementinstitute@bmo.com

For further information: or for an interview with a Retirement Institute
Representative please call our Media Contacts: Martha McInnis, Toronto,
martha.mcinnis@bmo.com, (416) 867-3996; Lucie Gosselin, Montreal,
lucie.gosselin@bmo.com, (514) 877-1101; Laurie Grant, Vancouver,
laurie.grant@bmo.com, (604) 665-7596