Retirement Planning – Bolingbrook
For anyone in "Generation X" - described as folks born between the mid-1960s and also the early 1980s - retirement planning sounds like something your mother and father or other "old people" might do. But guess what? With a lot of "baby boomers" either already in the middle of retirement or looking at it on the horizon, "Generation X" is the next generation of individuals to reach retirement. Sure, it's still a ways off, but people in their 30s and 40s need to begin focusing their investment planning on retirement and ensuring they've got the type of retirement they are working hard to have. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement of today. It'll be far better in some ways, and worse somewhat. However, the retirement planning for today's labor force must be far different than it was in earlier times.
On the bright side, people are living longer than ever. As of a few years ago, the average life span of an American was 77.9 years, exactly 2.5 years more than the average life span in 1990 and more than 4 years more than the average life span in 1980. Therefore investment planning for retirement has to account for an extended period of time right now than a generation or two in the past.
Social Security and Retiring - Bolingbrook
On the down side, Social Security is going to be a far less trustworthy income source compared to now. And also the odds are slim-and getting slimmer each year-that retirees 20 and 30 years from right now will be able to rely on a work pension and enjoy lifetime benefits from their previous employer. Increasingly more, retirees will need to rely on their financial savings to cover the costs of living and medical health insurance.
With people living for a longer time and needing more money to do so, retirement planning is a vital activity even for those who are halfway to the regular retirement age of 65. It could be an intimidating task to plan for a couple of decades into the future, especially with bills, rents and mortgages to pay today, but procrastinating will not make it any less difficult.
Putting even just a small amount of cash into a savings account that works as a retirement savings plan can pay off later on. The interest you get on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will provide a place where you can accumulate capital earning a little interest rate until there's enough to invest in a reliable security that will yield you more like a municipal bond.
Another good approach which could certainly and gradually build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll get back your initial investment along with all the interest that collected over the lifetime of the bond. That's a significant amount of money for a 20- or 30-year bond-money which could provide a nice foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA - Bolingbrook
Nevertheless, the best approach when it comes to retirement planning would be to put cash in a 401K plan at your workplace or in an IRA opened with an investment house. For those for whom a 401K isn't a retirement planning option, an IRA is the next best thing. Money placed in this account is tax deferred and might be tax-deductible, depending on how much is invested every year.
For more details, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we'll be glad to help you! We offer 401K and IRA rollover and review services for individuals in the Bolingbrook area.
