The recession has hurt many retirement accounts around the world. iRetirement provides strategies, news, and avenues to quality websites to help you rebuild your retirement account. These times require going back to basics. This means saving money, making extra money, and if needed finding a better paying job. We provide information from experts in each of these areas and a place to find quality resources to ensure your financial future. We also proved powerful tools to calculate your future.

Everyone would agree that 2008 was a very bad year but will 2009 be better? Most would also agree that the financial crisis caught them surprise. Many did not do the necessary research and did not kept up with the markets. At iRetirement we provide current information and news to help you be optimistic about 2009.

Our focus this month is protecting you from investment scams. Worried about being taken in by a Ponzi scheme? Our newest page "Safe Investing" will help you learn what a Ponzi scheme is and how to avoid some of the most popular money scams.

2009...A Year For Optimism?

Yes, there are good reasons to be optimistic in 2009. As the legend goes, after the bombing of Pearl Harbor, a Japanese Admiral turned and said “We have awakened a sleeping giant”.  The same thing happened in 2007. Many brokers, government agencies, bankers and more importantly individual investors were asleep at the wheel. During the years leading up to 2007, anyone could make easy money by simply investing in a mutual fund. It was so easy that making only 8% in a mutual fund seemed like a bad deal. Investors started requiring double digit returns for their investments. To meet these unreasonable expectations financial institutions created complex investments offerings that individual investors could not understand. In turn those investments lead many people to turning over their money to companies without doing any research. Sadly it appears that some of these companies did not understand these complex investments either. It was a case of the blind leading the blind.

In 2008, terms like bailout, housing crisis, Ponzi scheme, recession, financial bubble, and TARP where discussed on the local news almost every night. Before then the financial news had ten second spots right before a commercial or were isolated to business cable shows. This increase in exposure to money news will empower people to become more involved in their financial future. People have learned that making and keeping their money with investments takes work. 2009 will usher in a year where more people will do their homework and no longer simply trust companies or individuals with their money. This change in individual accountability for their portfolios and retirement accounts makes 2009 to be a good year to be optimistic.

Gladly in 2008 the unreasonable belief of unabated growth and wealth entitlement has taken a fatal hit. Of course it would be wonderful if stocks and real estate always increased in value but this is simply not possible. Today, the concept of home prices increasing has many people confused. These people bought their home because of the neighborhood or local schools. The drop in real estate value has caused their mortgage to temporarily be more then the value of the house. Some are panicking because they believe that their home should always appreciate. The truth is that the neighborhood or local schools are still great. Unless they need to move soon then their home should be a long term investment. Do their homework and refinance only when interest rates make sense.

These changes in thinking are making inroads into people’s lives and that will be a good thing in the long run. Savings will increase and more people will invest in quality companies. They will no longer pay attention to get rich schemes on late night TV or financial message boards. In 1977, over thirty years ago, a song was released titled “The Grand Illusion”. It talked about the fact that blind ambition and keeping up with our neighbors is a marketing inspired fantasy. The lesson of 2008 is that living within your means, researching before you invest and not going into debt are the surest ways to keep or increase wealth in the future. These concepts may not be as exciting as “Make 20% The Easy Way”. We now know the truth about these claims and that makes 2009 a very optimistic year.

Financial Crisis: How Did We Get Here?

Submitted By: Jeffrey Stoffer CFA, CFP

We are on the verge of the biggest financial crisis since the 1930's. So much has happened in the last few weeks that I felt it was important to step back and try to get a handle on what has transpired. We experienced a real estate bubble. Most bubbles throughout history result from too much of a good thing. Since 2003, credit is that thing. At the time, it all seemed so wonderful. More and more people were living the American dream of home ownership. Those already owning homes were pleased to see their value rise and happy to tap into the equity to purchase cars, vacations, and bathroom remodels. This story played out in many countries.

But ingredients were coming together in the financial markets that made for a bad recipe. Too many people were getting loans that they would likely never be able to repay. The big financial institutions were lending more and more money to questionable borrowers as a route to quick profits. They could "package" these mortgages and sell them to someone else, and they were sold, across the globe.

This makes me think of a Warren Buffet quote, "Only when the tide goes out do you discover who's been swimming naked. " The tide in our case is home prices. As home prices decline, these packages of mortgages depreciate in value. Then, the financial institutions holding these risky packages have to devalue them on their books.

Now the pendulum of easy credit has swung too far back in the opposite direction. Every player in the markets has gotten more conservative, in fact down right tight, with lending. We need qualified buyers to step up and buy homes, thus supporting prices.

But lenders have become so strict that this is not happening and home prices continue to decline. Mortgage securities decline in value, the strength of the financial institution weakens, so they lend less, and home prices continue down in a self-perpetuating vortex.

This reluctance to lend is what brought us to the current crisis. Credit and lending are the red blood cells in the financial circulatory system. Think of them as carrying needed oxygen and nutrients to sustain the body. What Fed Chairman Bernanke and Treasury Secretary Paulson saw this week was a credit contraction of unprecedented proportions. The recent take over of Fannie and Freddie, the bankruptcy of Lehman, and the "rescue" of AIG, were supposed to restore some sense of order and keep credit flowing. But it wasn't enough and markets were at a tipping point.

The decisions made in this month of September will be questioned, analyzed, and debated for years to come, but I believe the actions of Messrs. Bernanke and Paulson were needed to avert a global crisis. It was clear the stopgap measures and band aid solutions were not having enough of an effect. We were at the point at which taking no action was a huge risk. I am breathing a cautious sigh of relief.

What Can We Do Now?

In these times of turmoil and uncertainty it is easy to become emotional about our investments. It is times like these that we discover how much risk we really can or cannot tolerate. We may feel the need to "do something." When your emotions are high because of stressful market conditions, you should NEVER make financial decisions.

However, now is a good time to review things. The first thing is a "gut check." How are you feeling on these days of wild market swings? When you see a huge drop in the market does your stomach turn? Are you afraid to look at your financial statements? These are signs you are taking too much risk.

Second, do you have an investment plan? People with a plan have investments suited to their needs, to their goals, and objectives. Their assets are positioned for the long term. If they have needs in the near term, these are taken care of with only the safest of investments. These are the people who will be better able to handle financial crises without losing sleep.