Amidst all the chaos of the housing crisis, a less obvious casualty of the epic catastrophe may be easily overlooked: your retirement prosperity. The Center for Economic and Policy Research, a Washington, D.C. think tank, released a report stating the collapse of the housing market has wiped out $4 trillion in home equity, compromising the net worth of millions of baby boomers.

By next year, homeowners age 45 to 54 will experience a drop in the value of the average net worth of households, making them worth 25 percent less than they were in 2004.

In order to prepare you for future retirement planning, CNNMoney advises you to heed the following three valuable lessons in light of the housing bubble burst.

Real estate used to be considered a sure thing when it came to making investments. A steady surge of investors traded up, flipped fixer-uppers and bought second homes. However, these investments eventually led to stagnant returns and steady losses. The current fad for the investment-savvy is natural resource stocks, which have risen 29 percent for the 12 months to June 30, precious metals are up 29 percent and energy is up 26 percent. CNNMoney, warns investors to remember that while hot ticket investments might seem like a sure thing now, they will most likely lead to a reduction of wealth in the long run.

Another perverse effect of the housing bubble was the effect it had on our planning. It led Americans to save less. People used their asset gains on their houses as an excuse to cut back on retirement savings. It is important to keep making contributions to your retirement account, no matter how well you are doing in your career.

Americans also exacerbated the damage done by the falling prices by borrowing heavily from their homes. Federal Reserve economist James Kennedy estimates that from 2002 through 2007 home owners pulled $2.5 trillion in equity out of their homes through cash-out refinancings and home-equity loans, accounting for nearly a third of the increase in home values for that period.

The housing collapse is predicted to be among the largest fiascos in American economic history, and Americans would be wise to learn from it.

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