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March 09, 2016 09:00 ET

Americans Excited About Retirement, But Have Concerns About Their Finances: BMO Wealth Institute Report

- More than half of Americans have a positive outlook when thinking about their retirement years

- Many (58 percent) will miss employment income and 47 percent will miss the social connections from their working life

- Sixty-nine percent think that running out of money will be their biggest challenge in retirement

CHICAGO, ILLINOIS--(Marketwired - March 9, 2016) - BMO Wealth Institute today released a report, "What's your retirement game plan?", which examines the concerns, attitudes and opinions that Americans have about retirement.

The report found that 54 percent are excited and optimistic about retirement and 45 percent feel prepared for whatever might happen. However, almost 60 percent say they miss or will miss their employment income from their working life once they retire.

Additionally, Americans believe that the most significant challenges they will face in retirement include:

  • Ensuring they do not run out of money to live comfortably (69 percent)
  • Dealing with serious health problems (66 percent)
  • Having difficulty finding a sense of purpose (40 percent)

"Like almost anything else in life, preparation is the key to success and retirement is no different," said Stephen Williams, Co-Head, U.S. Financial Planning Strategy, BMO Private Bank. "Preparing for the future can bring a surge of unease. Working with a financial professional can help you develop a robust financial plan to ensure you're in the best possible position to live the way you want in your golden years."

What makes a satisfied retiree?

The report also found that 62 percent have given at least some thought to the non-financial aspects of retirement. According to the report, the attitudes, activities and mindsets they think are most likely to be found in a satisfied retiree include being:

  • Busy and active (90 percent)
  • Independent (64 percent)
  • Involved with volunteer work (33 percent)

"Preparing for the non-financial aspects of retirement is just as important as making sure you have the dollars and cents to be comfortable," noted Mr. Williams. "Having a positive outlook and staying busy, active and current are key during this stage of your life."

BMO offers the following tips to help Americans prepare for retirement:

Pre-Retirement Investment Strategies: A financial professional can help you determine the right investment strategy and the appropriate investments for you. There are many actively managed and diversified portfolios available. Determining how to allocate your investments between these various types of accounts can help reduce your taxes and maximize the amount of income available for your retirement.

Guaranteed Income Sources: Determine what guaranteed income sources exist, such as pensions and social security, and supplement with income annuities to match fixed expenses. This will allow long-term assets to grow without having to worry about paying the consistent monthly bills.

Individual Retirement Accounts (IRAs): It is necessary to understand your cash flow requirements in retirement and ensure that there are sufficient resources to cover both day-to-day expenses and funding for larger goals. IRAs offer flexibility, particularly Roth IRAs, which have no required minimum distributions.

Appropriate Risk Management: It is important to have a review done on your insurance, including umbrella policies, life insurance, and long-term care.

To view a copy of the full report, please visit: https://www.bmo.com/privatebank/us/insights/newsletters/bmo-wealth-institute

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About the BMO Wealth Institute

The BMO Wealth Institute provides insights and strategies around wealth planning and financial decisions. The Institute's team of professionals have deep expertise around all aspects of wealth planning including retirement, estate, tax and insurance.

About BMO Private Bank, a part of BMO Wealth Management (U.S.)

BMO Private Bank offers a comprehensive range of wealth management services that include investment advisory, trust, banking and financial planning to meet the financial needs of high-net worth clients. Through integrated teams of experienced financial professionals, BMO Private Bank helps its clients realize their financial and lifestyle goals with solutions that are custom tailored and delivered with the highest level of personalized service.

Investment products are NOT FDIC INSURED - MAY LOSE VALUE - CARRY NO BANK GUARANTEE.

BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC. Not all products and services are available in every state and/or location.

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