Retirement Planning – Glen Ellyn
For those in "Generation X" - described as folks born between the mid-1960s and the early 1980s - retirement planning seems like something your mother and father or other "old people" would do. But guess what? With a lot of "baby boomers" either already in the midst of retirement or looking at it in the near future, "Generation X" is definitely the next generation of men and women to reach old age. Sure, it is still a ways off, but those in their 30s and 40s really need to start focusing their investment planning on retirement and ensuring they've got the kind of retirement they are working so hard to enjoy. Below are great tips on planning 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 yesteryear.
On the bright side, people 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 four years more than the average life span in 1980. So investment planning for retirement has to account for a longer period of time right now than a generation or two back.
Social Security and Retiring - Glen Ellyn
On the down side, Social Security will likely be a far less reliable income source compared to 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 rely on their financial savings to pay for the costs of just living and medical health insurance.
With individuals living for a longer time and needing additional money to do so, retirement planning is an essential activity even for those people who are halfway to the standard retirement age of 65. It may be a daunting task to plan for a couple of decades into the future, particularly with bills, rents and mortgages to pay right now, but procrastinating won't make it any less complicated.
Placing even just a little bit of cash into a savings account that functions as a retirement savings plan can pay off later. 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 is enough to invest in a reliable security which will yield you more like a municipal bond.
Another solid approach which could surely and progressively build a nest egg is to invest in long-term bonds. After maturation of the bond, you'll get back your initial investment and also all the interest that collected over the life of the bond. That's a significant 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 that you can ever make.
401K and IRA - Glen Ellyn
However, the best approach when it comes to retirement planning is 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 is not 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 every year.
For more info, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we'll be happy to help you! We offer 401K and IRA rollover and review services for individuals in the Glen Ellyn area.
