Retirement Planning Services – Bellwood
For anyone in "Generation X" - described as people born between the mid-1960s and the early 1980s - retirement planning seems like something your parents or other "old people" would do. But guess what? With a lot of "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" is definitely the next generation of people to reach old age. Sure, it is still a ways off, but people in their 30s and 40s really need to begin centering their investment planning on retirement and making sure they've got the type of retirement they are working so hard to have. Here are some tips on planning for retirement:
Retirement life in the foreseeable 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 labor force needs to be far different than it was in earlier times.
On the bright side, people 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 a longer time of time now than a generation or two back.
Social Security and Retiring - Bellwood
On the downside, Social Security will probably be a far less reliable source of income than it is now. And also the likelihood is 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 persons will have to rely on their financial savings to cover the expenses of just living and medical health insurance.
With individuals living longer and needing extra money to do so, retirement planning is an essential activity even for those who are halfway to the common retirement age of 65. It could be an intimidating task to plan for a couple of decades into the future, especially with bills, rents and home loans to pay today, but procrastinating won't make it any easier.
Putting even just a little bit of cash into a savings account that serves as a retirement savings plan can pay off later on. 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 build up capital earning a small interest rate until there's enough to invest in a trusted security that will yield you more like a municipal bond.
Another solid strategy which could surely and progressively build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you will 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 which could 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 With Retirement - Bellwood
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 is not a retirement planning option, an IRA is the next best thing. Money put in this account is tax deferred and may be tax-deductible, depending on how much is invested each year.
For more info, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we'll be glad to help you! We provide 401K and IRA rollover and review services for folks in the Bellwood area.
