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Retirement Planning Services – Carol Stream

For those in "Generation X" - defined as people born between the mid-1960s and also the early 1980s - retirement planning sounds like something your parents or other "old people" would 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 men and women to reach old age. Sure, it is a ways off, but people in their 30s and 40s have to begin focusing their investment planning on retirement and ensuring they have the type of retirement they are working so hard to have. Below are great tips on planning for retirement:

Retirement life in the future will be different than the retirement of today. It will likely 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 days gone by.

On the bright side, people are living longer than ever. As of not too long 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 a longer time of time right now than a generation or two in the past.

Social Security and Retirement - Carol Stream

On the down side, Social Security will likely be a far less dependable source of income than it is 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. Increasingly more, retired people will need to rely on their savings to pay for the costs of living and health insurance.

With folks living for a longer time and needing more cash to do so, retirement planning is an essential activity even for those who are halfway to the common 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 mortgages to pay right now, but procrastinating won't make it any easier.

Putting even just a small amount of money now into a savings account which 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 provide a place where you can pile up capital earning a small interest rate until there's enough to invest in a trusted security which will yield you more like a municipal bond.

Another good approach which could certainly and steadily build a nest egg is to invest in long-term bonds. On maturation of the bond, you will get back your initial investment and also all the interest which collected over the lifetime of the bond. That's a tremendous amount of money for a 20- or 30-year bond-money which could provide a great foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.

401K and IRA With Retirement - Carol Stream

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 is not a retirement planning option, an IRA is the next best thing. Money put in this account is tax deferred and might be tax-deductible, depending on how much is invested each year.

For more info, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We offer 401K and IRA rollover and review services for individuals in the Carol Stream area.

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