Retirement Planning – Barrington
For anyone in "Generation X" - described as individuals born between the mid-1960s and also the early 1980s - retirement planning may sound like something your parents or other "old people" would do. But you know what? With lots of "baby boomers" either already in the middle of retirement or looking at it in the near future, "Generation X" stands out as the next generation of folks to reach retirement. Sure, it is a ways off, but people in their 30s and 40s ought to begin focusing their investment planning on retirement and making sure they've got the sort of retirement they are working hard to have. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement of today. It will be 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 days gone by.
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 greater than the average life span in 1990 and more than four 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 ago.
Social Security and Retiring - Barrington
On the down side, Social Security is going to be a far less reliable income source compared to now. And also the odds are 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 workplace. Increasingly more, retirees will need to depend on their financial savings to cover the costs of 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 standard retirement age of 65. It may be a daunting task to plan for a few decades into the future, particularly with bills, housing costs and home loans to pay right now, but procrastinating will not make it any easier.
Placing even just a little bit of money now into a savings account which functions as a retirement savings plan can pay off later on. The interest you receive 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 acquire 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 surely and steadily build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you will get back your initial investment as well as all the interest which collected over the life of the bond. That's a tremendous amount of money for a 20- or 30-year bond-money that may 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 - Barrington
Nevertheless, the best approach when it comes to retirement planning would be to put money in a 401K plan at work or in an IRA opened with an investment house. For those for whom a 401K isn't a retirement planning choice, an IRA is the next best thing. Money placed in this account is tax deferred and may be tax-deductible, depending on how much is invested every year.
For more details, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We provide 401K and IRA rollover and review services for folks in the Barrington area.
