Retirement Planning – Aurora, Illinois
For anyone in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your parents or other "old people" would do. But you know what? With a lot of "baby boomers" either already in the middle of retirement or viewing it on the horizon, "Generation X" stands out as the next generation of folks to reach old age. Sure, it's still a ways off, but people in their 30s and 40s really need to begin focusing their investment planning on retirement and making sure they've got the type of retirement they are working so hard to enjoy. Below are great tips on preparing for retirement:
Retirement life in the future will be different than the retirement in the present day. It will likely be better in some ways, and worse in some ways. However, the retirement planning for today's workforce must be far different than it was in yesteryear.
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 greater 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 now than a generation or two in the past.
Social Security and Retirement - Aurora, Illinois
On the downside, Social Security is going to be a far less trustworthy source of income than it is now. And the odds are slim-and getting slimmer each year-that retirees 20 and 30 years from now will be able to rely on a work pension and enjoy lifetime benefits from their former employer. More and more, retired people will have to depend on their financial savings to cover the costs of just living and medical health insurance.
With folks living for a longer time and needing additional money to do so, retirement planning is a vital 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, rents and mortgages to pay right now, but procrastinating won't make it any less complicated.
Putting even just a small amount of money now into a savings account that serves as a retirement savings plan can pay off later. 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 small interest rate until there is enough to invest in a trusted security that will yield you more like a municipal bond.
Another solid strategy that can certainly and gradually build a nest egg is to put money into long-term bonds. On maturation of the bond, you'll get back your initial investment and also all the interest that collected over the life of the bond. That's a significant amount of money for a 20- or 30-year bond-money that can provide a great foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.
401K and IRA - Aurora, Illinois
Nevertheless, 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 the people for whom a 401K isn't a retirement planning option, an IRA is the next best thing. Money put into this account is tax deferred and may be tax-deductible, depending on how much is invested every year.
For more information, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we'll be happy to help you! We offer 401K and IRA rollover and review services for folks in the Aurora, Illinois area.
