Retirement Planning – Berwyn
For those in "Generation X" - defined as folks born between the mid-1960s and also the early 1980s - retirement planning sounds like something your mother and father or other "old people" might do. But you know what? With many "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" is the next generation of people to reach old age. Sure, it is a ways off, but people in their 30s and 40s need to begin focusing their investment planning on retirement and ensuring they've got the type of retirement they are working hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement of today. It'll 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 earlier times.
On the bright side, individuals are living longer than ever. As of a short while 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 right now than a generation or two in the past.
Social Security and Retirement - Berwyn
On the downside, Social Security will likely be a far less dependable income source compared to now. And also the likelihood is slim-and getting slimmer every year-that retirees 20 and 30 years from right now will be able to rely on a work pension and enjoy lifetime benefits from their previous employer. Increasingly more, retired people will have to rely on their financial savings to cover the costs of living and health insurance.
With individuals living longer and needing additional money to do so, retirement planning is a vital activity even for those people who are halfway to the regular 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.
Putting even just a little bit of cash into a savings account that 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 supply a place where you can build up capital earning a small interest rate until there is enough to invest in a trusted security that will yield you more like a municipal bond.
Another good approach that may surely and gradually build a nest egg is to put money into long-term bonds. On maturation of the bond, you will get back your initial investment as well as all the interest that collected over the lifetime of the bond. This is a considerable amount of money for a 20- or 30-year bond-money that may 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 With Retirement - Berwyn
However, 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 people for whom a 401K is not a retirement planning option, an IRA is the next best thing. Money put into this account is tax deferred and might be tax-deductible, depending on how much is invested every year.
For more information, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We offer 401K and IRA rollover and review services for individuals in the Berwyn area.
