Retirement Planning – Glen Ellyn
For those in "Generation X" - defined as folks born between the mid-1960s and also the early 1980s - retirement planning may sound like something your parents or other "old people" might do. But guess what? With lots of "baby boomers" either already in the middle of retirement or looking at it in the near future, "Generation X" will be the next generation of people to reach old age. Sure, it is a ways off, but those in their 30s and 40s will need to start centering their investment planning on retirement and making sure they've got the sort of retirement they are working so hard to enjoy. Here are some tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement right now. It will be better in some ways, and worse somewhat. But, the retirement planning for today's labor force needs to be far different than it was in the past.
On the bright side, people 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 more than 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 right now than a generation or two back.
Social Security and Retirement - Glen Ellyn
On the downside, Social Security is going to be a far less dependable income source than it is now. And 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 previous workplace. Increasingly more, retirees will have to rely on their financial savings to pay for the expenses of just living and health insurance.
With people living for a longer time and needing more cash to do so, retirement planning is a vital activity even for those people who are halfway to the common retirement age of sixty-five. It could be a daunting task to plan for a few decades into the future, especially with bills, rents and mortgages to pay right now, but procrastinating will not make it any easier.
Putting even just a small amount of cash into a savings account that works as a retirement savings plan can pay off later on. The interest you receive on money in a savings account will allow your preliminary investments to grow to something sustainable. A savings account will give you a place where you can build up capital earning a little interest rate until there's enough to invest in a reliable security which will yield you more like a municipal bond.
Another good approach that could certainly and progressively build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you will get back your initial investment along with all the interest that collected over the lifetime of the bond. That's a tremendous amount of money for a 20- or 30-year bond-money that 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 - Glen Ellyn
Nevertheless, the best approach when it comes to retirement planning would be to put cash in a 401K plan at your workplace or in an IRA opened with an investment house. For those 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 annually.
For more details, please feel free 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 Glen Ellyn area.
