Thursday, October 19, 2006

Five Signs of Retirement Postponement Syndrome

Are you banking on selling your home or your business? Are you ensared in the financial T.R.A.P of "Tuition, Retirement And (related) Problems? Could you be the featured disaster in a reality TV show? Then you may be suffering from RPS, known as the "Retirement Postponement Syndrome."

Are you a victim of RPS? This syndrome is outlined in this piece that I received in my e-mail box.

Millions of Americans in their 40s and 50s may be suffering from "retirement postponement syndrome" (RPS) shortcomings that could end up robbing their golden years unless they take strong corrective action, according to a warning issued today during a national news event held by the Zero Alpha Group (ZAG) and featuring three financial experts.


What are the symptoms of retirement postponement syndrome? Which conditions put you at greatest risk of suffering this financial malady? Based on their experience in dealing with hundreds and hundreds of clients, the experts at the financial advisory firms that make up the Zero Alpha Group have identified the following five key warning signs of RPS:


If you are counting on the sale of your home or small business to bail out underfunded retirement savings and investments, think again. As recent months have illustrated, home prices can be mercurial. In addition, a home may sit on the market for months or even longer before being sold, often at a reduced price. Small business owners who rely heavily on selling their firm at a handsome profit or making a smooth transition via a family succession take a big chance on coming up short on their retirement nest egg.

That approach is just as risky as the executive who works for someone else and has too much tied up in the stock of the company that employs him or her. You should have a diversified investment portfolio that spreads out the risk by avoiding overconcentration of your wealth in the single "basket" of your small business.


Many Baby Boomers had children later in life than their parents did ... and others started a second family in their 40s or even early 50s. Both of these parenting circumstances can put even the most diligent saver and investor in the T.R.A.P.: Tuition, Retirement and (Related) Problems.

Boomers in their 50s and early 60s with children heading off to college risk seeing their retirement savings substantially depleted at the worst possible time. With some private colleges costing $25,000-$30,000 a year or more for tuition, room and board, many parents who have failed to allow for such costs are forced to put off their retirement dates.


If your retirement plan is predicated on the notion that your living expenses will go way down, you could be making a classic mistake. Financial advisors know that spending by retirees (particularly Baby Boomers) often does not go down. In fact, such spending often surges as people realize they finally can travel and engage in the hobbies they never had the time to do while working.

Unless you are the rare person who could be content reading library books and watching basic cable TV reruns for 20 years, don't base what you save and invest for retirement on the assumption that your golden years will be your penny-pinching years.


More and more Baby Boomers are finding themselves saddled with medical and housing expenses for aging parents. Investors in such a situation are said to be in the "sandwich generation," particularly when they are also confronted with paying for college or other expenses of one or more children.

In 2005, 71 percent of Baby Boomers aged 41-59 had at least one living parent, according to a survey by the Pew Research Center. That was up considerably from 1989, when only 60 percent of Boomers had a living parent. The good news is that you can look down the road and anticipate well in advance if you are at risk of getting "sandwiched" in this fashion . and then plan your saving and investing accordingly.


All too many parents with children returning to live at home after college - or never leaving home in the first place! - end up saddled with their own "reality show"-like headaches.

Irresponsible adult children can mean such major savings-draining expenses as lavish second or third weddings, gambling debts and the cost of dealing with drug problems. Today more than 25 percent of Americans ages 18-34 live at home with their parents, according to U.S. Census figures. For 18 to 24-year-olds, 56 percent of men and 43 percent of women live with one or both parents. These numbers may be heading even higher: One job search Web site found that fully 62 percent of college students say they expect to live at home after graduation. Those parents who impose firm deadlines and require so-called "boomerang" children to share all or most costs are the ones most likely to emerge from the experience with their nest eggs intact.


Founded in 1995, the Zero Alpha Group ( is an international network of independent investment advisory firms that manage a total of more than $7 billion in assets.

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