Retirement Planning – Broadview
For the people in "Generation X" - described as individuals born between the mid-1960s and also the early 1980s - retirement planning sounds like something your parents or other "old people" would do. But you know what? With a lot of "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" is definitely the next generation of folks to reach old age. Sure, it is a ways off, but those in their 30s and 40s have to start focusing their investment planning on retirement and making sure they have the kind of retirement they are working hard to have. Here are some tips on planning for retirement:
Retirement life in the future will be different than the retirement of today. It'll be better in some ways, and worse somewhat. But, the retirement planning for today's labor force must be far different than it was in days gone by.
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 four years more than the average life span in 1980. Therefore investment planning for retirement has to account for an extended period of time right now than a generation or two ago.
Social Security and Retiring - Broadview
On the down side, Social Security is going to be a far less trustworthy income source compared to now. And also the odds are slim-and getting slimmer each 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 former employer. More and more, retired people will have to depend on their financial savings to pay for the costs of just living and health insurance.
With folks living for a longer time and needing more money to do so, retirement planning is an essential activity even for those people who are half way to the standard retirement age of 65. It can be a daunting task to plan for a few decades into the future, particularly with bills, housing costs and mortgages to pay today, but procrastinating will not make it any easier.
Putting even just a little bit of cash into a savings account which serves as a retirement savings plan can pay off later. The interest you receive on money in a savings account will allow your preliminary investments to grow to something sustainable. A savings account will supply a place where you can accumulate 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 solid strategy which could surely and steadily build a nest egg is to put money into long-term bonds. On maturation of the bond, you will get back your initial investment along with all the interest which collected over the lifetime of the bond. This is 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 - Broadview
However, 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 people for whom a 401K isn't 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 feel free 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 Broadview area.
