Retirement Planning – Forest Park
For the people in "Generation X" - described as people born between the mid-1960s and the early 1980s - retirement planning seems like something your mother and father or other "old people" might do. But guess what? With many "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" is definitely the next generation of individuals to reach retirement. Sure, it's still a ways off, but people in their 30s and 40s will need to start 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 foreseeable future will be different than the retirement right now. It'll be better in some ways, and worse somewhat. However, the retirement planning for today's workforce must be far different than it was in the past.
On the bright side, individuals are living longer than ever. As of not too long ago, the average life span of an American was 77.9 years, exactly 2.5 years over the average life span in 1990 and more than four years more than the average life span in 1980. Therefore investment planning for retirement has to account for a longer period of time right now than a generation or two in the past.
Social Security and Retiring - Forest Park
On the down side, Social Security will probably be a far less trustworthy income source than it is now. And also the likelihood is 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. More and more, retirees will need to depend on their savings to cover the costs of just living and health insurance.
With people living longer and needing more money to do so, retirement planning is an essential activity even for those people who are half way to the regular retirement age of 65. It may be a daunting task to plan for a few decades into the future, especially with bills, housing costs and home loans to pay today, but procrastinating will not make it any less complicated.
Putting even just a small amount of money now into a savings account that functions as a retirement savings plan can pay off later on. The interest you get on money in a savings account will allow your preliminary investments to grow to something sustainable. A savings account will supply a place where you can accumulate capital earning a small interest rate until there's enough to invest in a trusted security which will yield you more like a municipal bond.
Another solid strategy that may certainly and progressively build a nest egg is to invest in 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 tremendous amount of money for a 20- or 30-year bond-money that may provide a good foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA With Retirement - Forest Park
However, the best approach when it comes to retirement planning is to put money in a 401K plan at work or in an IRA opened with an investment house. For those for whom a 401K is not a retirement planning option, an IRA is the next best thing. Money put into this account is tax deferred and might be tax-deductible, depending on how much is invested each year.
For more details, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We offer 401K and IRA rollover and review services for folks in the Forest Park area.
