Retirement Planning – Aurora
For the people in "Generation X" - defined as folks born between the mid-1960s and also the early 1980s - retirement planning may sound like something your mother and father or other "old people" would do. But you know what? With a lot of "baby boomers" either already in the midst of retirement or looking at it on the horizon, "Generation X" is the next generation of people to reach old age. Sure, it is still a ways off, but those in their 30s and 40s will need to start focusing their investment planning on retirement and making sure they have the kind of retirement they are working hard to enjoy. Here are some tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement in the present day. It will be better in some ways, and worse in some ways. But, the retirement planning for today's labor force must be far different than it was in yesteryear.
On the bright side, individuals 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 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 back.
Social Security and Retiring - Aurora
On the down side, Social Security is going to be a far less dependable source of income compared to now. And the likelihood is 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 previous employer. Increasingly more, retired people will need to depend on their savings to pay for the expenses of just living and health insurance.
With individuals living for a longer time and needing more cash to do so, retirement planning is a vital activity even for those people who are halfway to the common retirement age of 65. It may be an intimidating task to plan for a few decades into the future, particularly with bills, housing costs and mortgages to pay right now, 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 receive 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 pile up capital earning a little interest rate until there is enough to invest in a trusted security that will yield you more like a municipal bond.
Another good strategy that may certainly and gradually build a nest egg is to invest in long-term bonds. On maturation of the bond, you'll get back your initial investment as well as 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 may provide a good foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.
401K and IRA With Retirement - Aurora
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 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 might be tax-deductible, depending on how much is invested every year.
For more info, please feel free to contact GC Financial Advisors Ltd. at any time and we'll be happy to help you! We provide 401K and IRA rollover and review services for individuals in the Aurora area.
