Today, though, things have changed. Every day you read a new headline that gives you pause; "Dancing Bears at Your Retirement Party", "Americans Delay Retirement As Housing, Stocks Swoon", "Savers Feel Pinch of Tight Credit", "Sales of Triangle Homes Off Again", "Government Benefit Programs in Trouble", and the list goes on.



What is a baby boomer to do? We have been stashing money away as fast as we can into our homes and retirement plans, hoping for the market to drive prices ever upward only to find that what goes up does indeed come down. We are now faced with the prospect of working longer, saving even more and hoping that things turn around quickly.

We could just get depressed, resort to substance abuse or consider an early death but those options don't seem all that appealing either. Perhaps the answer to our problems is a new President, one who promises change or a better life? That might indeed be the answer but I doubt it. Very few individuals can fix what is a fundamental flaw in a very complex system.

The biggest problems you will face in retirement are:

* How long you live?

* What your tax bracket will be?

* How well your portfolio performs?

* What government benefits will look like?

Under "how long you will live" falls one other factor that will affect everything else; how healthy will you be? Fidelity investments recently completed a study that projected that the average couple will need about $225,000 in retirement just to cover non-covered medical expenses. This could put a real crimp on a couple's lifestyle. Also, longer life means your money must last as long as you do, so, your returns better be predictable.

What about your tax bracket? If you have all of your retirement savings in tax-deferred savings plans (IRAs, 401ks and annuities) you might be in for a real shock when it comes time to pull these dollars out. If you were counting on being in a lower tax bracket in retirement you may find that every 1% uptick in taxes will begin to eat away at the pool of dollars you have saved.

And what about your investment returns? Most projections of your assets lasting until the end of your life are based on returns of at least 5-6% per year, assuming you only withdraw 4% or less. If you experience returns of less than 5%, even negative returns, your assets will be expended much sooner than you expect. Can you predict with certainty that the market will perform the way you need it to once you get to retirement?

Government benefits are even a greater risk. The last article listed above gives you some of the stark statistics. Medicare will consume over half of all tax revenue by 2042, Medicaid is already dipping into its trust fund and Social Security will be out of money by 2041. All of this means your benefits will be reduced, you will have to wait longer and taxes will need to go up in order to prolong these programs.

Is there hope? Sure, but you will need to take action to make it happen. Now is the time to begin creating tax-free income sources that you can use in retirement. You also need to look for ways to guarantee your returns or find products that have more predictable returns. This doesn't mean that you have to give up on market based returns though, as there are several products that can meet these criteria.

The important thing for you to do is educate yourself about what actions will impact your future retirement the most, both negatively and positively. Once you have this knowledge you can find ways to maximize your potential retirement income and protect your assets without giving up choice and control.

Here's hoping both you and your money survive.