Retirement Planning – Blue Island
For those in "Generation X" - described as individuals born between the mid-1960s and the early 1980s - retirement planning seems like something your mother and father or other "old people" might 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" stands out as the next generation of people to reach retirement. Sure, it is still a ways off, but people in their 30s and 40s should start centering their investment planning on retirement and making sure they have the type 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 in the present day. It will likely be better in some ways, and worse in some ways. But, the retirement planning for today's workforce must be far different than it was in earlier times.
On the bright side, people 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 more 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 time of time now than a generation or two ago.
Social Security and Retiring - Blue Island
On the down side, Social Security is going to be a far less trustworthy source of income compared to 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 employer. More and more, retirees will have to rely on their financial savings to cover the costs of living and health insurance.
With folks living for a longer time and needing extra money to do so, retirement planning is a vital activity even for those people who are half way to the common retirement age of sixty-five. It can be an intimidating task to plan for a couple of decades into the future, especially 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 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 accumulate 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 solid strategy which could certainly and steadily build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll get back your initial investment and also all the interest which collected over the life of the bond. That's a considerable amount of money for a 20- or 30-year bond-money which could provide a good foundation for retirement. And a municipal or government bond is really as safe an investment as you can ever make.
401K and IRA - Blue Island
However, the best approach when it comes to retirement planning would be to put funds 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 placed in this account is tax deferred and might be tax-deductible, depending on how much is invested annually.
For more details, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We provide 401K and IRA rollover and review services for individuals in the Blue Island area.
