Retirement Planning Company – Barrington
For those in "Generation X" - described as folks born between the mid-1960s and also 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" will be the next generation of individuals to reach old age. Sure, it is a ways off, but those in their 30s and 40s have to begin centering their investment planning on retirement and ensuring they have the kind of retirement they are working hard to have. Here are some tips on planning for retirement:
Retirement life in the future will be different than the retirement right now. It'll be much better in some ways, and worse somewhat. But, the retirement planning for today's workforce needs to be far different than it was in the past.
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 over 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 a longer period of time now than a generation or two back.
Social Security and Retirement - Barrington
On the downside, Social Security will likely be a far less reliable source of income than it is 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 former workplace. Increasingly more, retired people will have to rely on their savings to pay for the costs of just living and medical health insurance.
With folks living for a longer time and needing more cash to do so, retirement planning is an essential activity even for those people who are halfway to the common retirement age of sixty-five. It can be a daunting task to plan for a couple of decades into the future, particularly with bills, housing costs and home loans to pay today, but procrastinating will not make it any easier.
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 provide a place where you can accumulate 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 good approach that could certainly and steadily 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 life of the bond. That's a tremendous amount of money for a 20- or 30-year bond-money that could provide a nice foundation for retirement. And a municipal or government bond is really as safe an investment as you can ever make.
401K and IRA - Barrington
However, the best approach when it comes to retirement planning is 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 into this account is tax deferred and may be tax-deductible, depending on how much is invested annually.
For more details, please don't 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 Barrington area.
