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Retirement Planning – Elmwood Park, IL

For the people in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your parents or other "old people" might do. But you know what? With many "baby boomers" either already in the middle of retirement or looking at it on the horizon, "Generation X" stands out as the next generation of individuals to reach old age. Sure, it's still a ways off, but people in their 30s and 40s must begin focusing their investment planning on retirement and making sure they've got the type 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 will likely be far 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, individuals 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 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 time of time now than a generation or two ago.

Social Security and Retiring - Elmwood Park, IL

On the down side, Social Security will likely be a far less reliable source of income compared to 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 employer. More and more, retired people will have to depend on their financial savings to pay for the costs of 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 who are halfway to the common retirement age of sixty-five. It can be an intimidating task to plan for a couple of decades into the future, particularly with bills, rents and mortgages to pay right now, but procrastinating will not make it any less difficult.

Placing even just a little bit of money now into a savings account that serves as a retirement savings plan can pay off in the future. 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 little interest rate until there's enough to invest in a trusted security which will yield you more like a municipal bond.

Another solid approach which could certainly and gradually 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 which could provide a good foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.

401K and IRA - Elmwood Park, IL

Nonetheless, the best approach when it comes to retirement planning is 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 choice, 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 details, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We offer 401K and IRA rollover and review services for individuals in the Elmwood Park, IL area.

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