Retirement Planning Company – Barrington
For those in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning seems like something your parents or other "old people" might do. But you know what? With many "baby boomers" either already in the middle of retirement or observing it in the near future, "Generation X" will be the next generation of people to reach retirement. Sure, it is still a ways off, but those in their 30s and 40s need to start centering their investment planning on retirement and making certain they have the kind of retirement they are working so hard to have. Below are great tips on planning 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 labor force needs to be far different than it was in the past.
On the bright side, folks 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 more 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 ago.
Social Security and Retiring - Barrington
On the downside, Social Security is going to be a far less trustworthy income source compared to now. And 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 former workplace. More and more, retired people will have to rely on their financial savings to cover the costs of living and medical health insurance.
With individuals living for a longer time and needing more money to do so, retirement planning is a vital activity even for those people who are half way to the common retirement age of 65. It can be a daunting task to plan for a few decades into the future, especially with bills, rents and home loans to pay right now, but procrastinating will not make it any easier.
Placing even just a small amount of cash into a savings account which functions 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 offer a place where you can build up capital earning a small interest rate until there's enough to invest in a reliable security which will yield you more like a municipal bond.
Another good approach which could surely and gradually build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you'll get back your initial investment and also all the interest which collected over the lifetime of the bond. That's a significant amount of money for a 20- or 30-year bond-money which could provide a nice 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 is to put cash in a 401K plan at work or in an IRA opened with an investment house. For those for whom a 401K is not 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 each year.
For more information, please do not 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 folks in the Barrington area.
