Retirement Planning – Brookfield
For anyone in "Generation X" - defined as individuals born between the mid-1960s and also the early 1980s - retirement planning may sound like something your parents or other "old people" would do. But guess what? With lots of "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" stands out as the next generation of folks to reach old age. Sure, it is still a ways off, but those in their 30s and 40s should start centering their investment planning on retirement and making sure they have the kind 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 right now. It'll be better in some ways, and worse in some ways. But, the retirement planning for today's workforce needs to be far different than it was in earlier times.
On the bright side, people are living longer than ever. As of a few years 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 a longer period of time right now than a generation or two in the past.
Social Security and Retiring - Brookfield
On the down side, Social Security is going to be a far less trustworthy source of income than it is now. And the likelihood is 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 persons will need to rely on their financial savings to cover the expenses of living and medical health insurance.
With people living for a longer time and needing extra money to do so, retirement planning is an essential activity even for those who are halfway to the standard retirement age of 65. It could be an intimidating task to plan for a few decades into the future, especially with bills, housing costs and home loans to pay today, but procrastinating won't make it any less complicated.
Putting even just a small amount of money now into a savings account that functions 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 offer a place where you can build up capital earning a little interest rate until there is enough to invest in a reliable security which will yield you more like a municipal bond.
Another good strategy that could surely and progressively build a nest egg is to put money into long-term bonds. After maturation of the bond, you'll get back your initial investment and also all the interest that collected over the lifetime of the bond. This is a significant amount of money for a 20- or 30-year bond-money that could provide a good foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA - Brookfield
Nonetheless, the best approach when it comes to retirement planning is to put cash 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 choice, 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 each year.
For more information, please feel free 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 Brookfield area.
