Retirement Planning – Broadview
For those in "Generation X" - defined as folks born between the mid-1960s and the early 1980s - retirement planning may sound like something your parents or other "old people" would do. But guess what? With many "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" stands out as the next generation of men and women to reach old age. Sure, it is still a ways off, but those in their 30s and 40s will need to begin focusing their investment planning on retirement and making sure they've got the kind of retirement they are working so hard to have. Below are great tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It will likely be better in some ways, and worse in some ways. However, the retirement planning for today's labor force must be far different than it was in earlier times.
On the bright side, folks 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 greater than 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 now than a generation or two ago.
Social Security and Retirement - Broadview
On the down side, Social Security will likely be a far less reliable source of income than it is 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 previous workplace. Increasingly more, retired persons will have to depend on their financial savings to pay for the expenses of living and medical health insurance.
With folks living longer and needing extra money to do so, retirement planning is a vital 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, especially with bills, housing costs and home loans to pay today, but procrastinating will not make it any easier.
Placing even just a small amount of money now into a savings account that functions as a retirement savings plan can pay off in the future. The interest you receive 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 pile up capital earning a little interest rate until there is enough to invest in a trusted security which will yield you more like a municipal bond.
Another good strategy that can surely and steadily build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you will get back your initial investment and also all the interest that collected over the lifetime of the bond. This is a tremendous amount of money for a 20- or 30-year bond-money that can provide a good foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.
401K and IRA With Retirement - Broadview
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 those 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 may be tax-deductible, depending on how much is invested annually.
For more info, please do not 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 Broadview area.
