Retirement Planning Services – Carol Stream
For anyone in "Generation X" - defined as folks born between the mid-1960s and also the early 1980s - retirement planning seems like something your mother and father or other "old people" might do. But guess what? With many "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" will be the next generation of individuals to reach old age. Sure, it is a ways off, but those in their 30s and 40s should start focusing their investment planning on retirement and ensuring they have the kind of retirement they are working hard to have. Here are some tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It will likely be far better in some ways, and worse in some ways. But, the retirement planning for today's labor force needs to be far different than it was in yesteryear.
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 over the average life span in 1990 and more than 4 years more than the average life span in 1980. So investment planning for retirement has to account for an extended period of time now than a generation or two ago.
Social Security and Retirement - Carol Stream
On the downside, Social Security is going to be a far less trustworthy income source 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 former employer. Increasingly more, retired persons will need to rely on their financial savings to pay for the costs of just living and health insurance.
With individuals living for a longer time and needing additional money to do so, retirement planning is an essential activity even for those who are half way to the standard retirement age of 65. It can be a daunting task to plan for a couple of decades into the future, particularly with bills, housing costs and home loans to pay today, but procrastinating won't make it any less complicated.
Placing even just a little bit of money now into a savings account that functions as a retirement savings plan can pay off later on. The interest you receive 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 acquire 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 strategy which could certainly and gradually build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you'll get back your initial investment and also all the interest that collected over the life 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 really as safe an investment that you can ever make.
401K and IRA - Carol Stream
Nevertheless, 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 the people for whom a 401K isn't a retirement planning choice, an IRA is the next best thing. Money placed in this account is tax deferred and may be tax-deductible, depending on how much is invested every year.
For more info, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we'll be happy to help you! We provide 401K and IRA rollover and review services for individuals in the Carol Stream area.
