Retirement Planning – Lake Forest, IL
For anyone in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your mother and father or other "old people" might do. But guess what? With lots of "baby boomers" either already in the midst of retirement or looking at it in the near future, "Generation X" stands out as the next generation of individuals to reach old age. Sure, it is still a ways off, but those in their 30s and 40s have to begin focusing their investment planning on retirement and making sure they have the kind of retirement they are working so hard to enjoy. 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 far better in some ways, and worse in some ways. But, the retirement planning for today's workforce needs to be far different than it was in the past.
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 over the average life span in 1990 and more than 4 years more than the average life span in 1980. So investment planning for retirement has to account for a longer period of time now than a generation or two in the past.
Social Security and Retiring - Lake Forest, IL
On the down side, Social Security will probably be a far less trustworthy source of income compared to now. And also the likelihood is slim-and getting slimmer every year-that retirees 20 and 30 years from now will be able to rely on a work pension and enjoy lifetime benefits from their previous employer. More and more, retirees will have to depend on their financial savings to cover the expenses of just living and health insurance.
With folks living longer and needing additional money to do so, retirement planning is an essential activity even for those people who are halfway to the regular retirement age of sixty-five. It can be an intimidating task to plan for a couple of decades into the future, particularly with bills, housing costs and mortgages to pay today, but procrastinating will not make it any less difficult.
Placing even just a little bit 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 preliminary investments to grow to something sustainable. A savings account will offer a place where you can build up capital earning a little interest rate until there is enough to invest in a trusted security which will yield you more like a municipal bond.
Another solid strategy that could surely and gradually build a nest egg is to put money into long-term bonds. After maturation of the bond, you will get back your initial investment as well as all the interest that collected over the life of the bond. This is a considerable amount of money for a 20- or 30-year bond-money that could provide a great foundation for retirement. And a municipal or government bond is really as safe an investment as you can ever make.
401K and IRA With Retirement - Lake Forest, IL
However, 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 the people for whom a 401K isn't a retirement planning option, an IRA is the next best thing. Money put in this account is tax deferred and may be tax-deductible, depending on how much is invested annually.
For more information, please feel free to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We offer 401K and IRA rollover and review services for folks in the Lake Forest, IL area.
