Retirement Planning – Glen Ellyn
For those in "Generation X" - defined as people born between the mid-1960s and also the early 1980s - retirement planning may sound like something your mother and father or other "old people" would do. But you know what? With lots of "baby boomers" either already in the middle of retirement or looking at it on the horizon, "Generation X" is the next generation of people to reach retirement. Sure, it is still a ways off, but people in their 30s and 40s have to begin focusing their investment planning on retirement and making sure they have the type of retirement they are working hard to enjoy. Below are great tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It'll be far better in some ways, and worse somewhat. But, the retirement planning for today's workforce needs to be far different than it was in the past.
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 more than the average life span in 1990 and more than 4 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 - Glen Ellyn
On the down side, 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 previous workplace. Increasingly more, retired persons will need to rely on their financial savings to cover the costs of just living and health insurance.
With people living longer and needing extra money to do so, retirement planning is an essential activity even for those people who are half way to the standard 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 home loans to pay right now, but procrastinating will not make it any less complicated.
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 preliminary investments to grow to something sustainable. A savings account will give you 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 approach that may surely and steadily build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll get back your initial investment as well as all the interest which collected over the lifetime of the bond. That's a considerable amount of money for a 20- or 30-year bond-money that may 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 - Glen Ellyn
Nonetheless, the best approach when it comes to retirement planning would be to put cash in a 401K plan at work or in an IRA opened with an investment house. For 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 each year.
For more details, please feel free to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We provide 401K and IRA rollover and review services for individuals in the Glen Ellyn area.
