[...]... changing They were changing before the bear market of 2000–2002, the recession of 2001, and before September 11, 2001 Significant trends were already afoot that transformed many aspects of retirement and retirement planning: the cost of retirement, pensions, health care, housing, the financial markets, estate planning, tax planning, and many more facets of the years after middle age In the future, there... collectively can be called the Wave They also are called the Retirement Wave or the Age Wave The Wave can be summed up as: the aging of the large Baby Boom generation, longer life spans, and fewer offspring Together, they amount to an aging population that has tremendous effects on the economy, the financial markets, and society See Chart 1.1 Where Will the Wave Take Us? There’s no doubt that demographic changes... on the ability to save and invest Investment options are more complicated than in the past, and the results are uncertain Financial deregulation produced many benefits for Americans They are no longer saddled with the fixed-interest-rate savings accounts of the 1970s and earlier The many options available today can substantially increase an individual’s wealth and enhance retirement However, the new. .. We already have seen changes in health care, housing, the cost of retirement, the financial markets, pension programs, and much more Because of key, unstoppable trends that already are in place, in the coming years changes in these and other areas affecting retirement will continue and accelerate Even those who already are retired have felt the effects of these trends and will feel them in the future. .. to foresee and adapt to changes Most of the financial disasters and near disasters of the past did not have the severe adverse consequences that were predicted at the onset Consider the horrifying scenarios that were predicted after the Asian financial crisis of 1997, the Russian debt default of 1998, and the anticipated year 2000 computer glitch Even the terrorist attacks on the World Trade Center and... mean those parts of the forecasts will be correct), they disagree on others Population aging on this scale is new Since the dawn of man, aging certainly hasn’t occurred in combination with longer life expectancies and the accompanying need for retirement income and medical care Yet, the consequences of the Baby Boomers passing through the earlier phases of their lives were anticipated fairly accurately... not want the large homes A decline in housing prices could seriously undermine the financial health of the Boomers and the U.S economy Home equity is a major portion of the wealth of many Americans For many older Americans, home equity is the only wealth they own or, at least, it is a substantial part of their net worth For many people, home equity is a big part of their retirement plans A number of. .. lower tax rates Japan’s stock market was booming, while the U.S market was stagnant The interest in overseas havens decreased through the 1980s as the domestic financial picture improved There was a brief uptick of interest in the early 1990s that was significant enough to cause Congress to pass a law that discouraged wealthy Americans from leaving the country for tax reasons But as a general rule,... those of the first generation of retirees The senior years will be dramatically longer and more vibrant That’s the good news The bad news is that the Boomers will have to save and invest to bear more of the expenses of those extra years The Boomers also are unlikely to realize the buoyant investment returns or receive the postretirement tax breaks of their parents and grandparents to help with that burden... invest the maximum in a 401(k) account, and invest for the long term Think of this book as your instruction manual for the new world of retirement You can have the retirement you desire, but you must act now to stay ahead of the dramatic, rapid changes that are taking place Even those who already are retired will be affected and must act The time you lose may be your own Those who don’t learn about and . planning: the cost of retirement, pensions, health care, housing, the financial markets, estate planning, tax planning, and many more facets of the years after middle age. In the fu- ture, there. were changing before the bear market of 2000–2002, the recession of 2001, and before September 11, 2001. Significant trends were already afoot that transformed many aspects of retirement and retirement. To take advantage of the coming retirement opportunities, you have to adapt. You must plan and prepare for the consequences of the new trends. Three key, unstoppable trends that already are in