Retirement Planning – Glen Ellyn
For anyone in "Generation X" - described as individuals born between the mid-1960s and also the early 1980s - retirement planning seems like something your parents or other "old people" would do. But you know what? With many "baby boomers" either already in the middle of retirement or observing it in the near future, "Generation X" will be the next generation of men and women to reach old age. Sure, it is still a ways off, but people in their 30s and 40s really need to start centering their investment planning on retirement and making sure they have the type of retirement they are working hard to have. Below are great tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement in the present day. It will likely be far better in some ways, and worse in some ways. However, the retirement planning for today's labor force needs to be far different than it was in the past.
On the bright side, folks 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 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 a longer time of time right now than a generation or two back.
Social Security and Retirement - Glen Ellyn
On the downside, Social Security will likely be a far less reliable source of income than it is now. And the odds are slim-and getting slimmer every 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, retirees will need to depend on their savings to pay for the costs of just living and health insurance.
With folks living for a longer time and needing additional money to do so, retirement planning is a vital activity even for those people who are halfway to the regular retirement age of 65. It may be a daunting 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 easier.
Placing even just a small amount 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 build up capital earning a small 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 can 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. That's a significant amount of money for a 20- or 30-year bond-money that can provide a good foundation for retirement. And a municipal or government bond is really as safe an investment as you can ever make.
401K and IRA With Retirement - Glen Ellyn
Nonetheless, the best approach when it comes to retirement planning would be to put funds in a 401K plan at work 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 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 will be happy to help you! We provide 401K and IRA rollover and review services for individuals in the Glen Ellyn area.
