Retirement Planning – Highland Park
For anyone in "Generation X" - defined as individuals born between the mid-1960s and also the early 1980s - retirement planning seems like something your parents or other "old people" might do. But guess what? With a lot of "baby boomers" either already in the midst of retirement or observing it in the near future, "Generation X" is definitely the next generation of individuals to reach retirement. Sure, it is still a ways off, but those in their 30s and 40s will need to start centering their investment planning on retirement and making sure they have the type of retirement they are working hard to enjoy. Here are some tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It will be better in some ways, and worse in some ways. But, the retirement planning for today's labor force must be far different than it was in days gone by.
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 greater 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 now than a generation or two in the past.
Social Security and Retirement - Highland Park
On the downside, Social Security is going to be a far less reliable source of income than it is now. And also the likelihood is slim-and getting slimmer every 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, retirees will have to rely on their financial savings to cover the costs of living and health insurance.
With folks living for a longer time and needing more money to do so, retirement planning is a vital activity even for those people who are halfway to the common retirement age of 65. It could be a daunting task to plan for a couple of decades into the future, particularly with bills, housing costs and home loans to pay right now, but procrastinating will not make it any easier.
Placing even just a little bit of money now into a savings account that functions as a retirement savings plan can pay off later on. The interest you get on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will offer a place where you can acquire capital earning a small interest rate until there is enough to invest in a reliable security that will yield you more like a municipal bond.
Another good strategy that may certainly and steadily build a nest egg is to put money into long-term bonds. After maturation of the bond, you will get back your initial investment and also all the interest that 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 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 - Highland Park
Nevertheless, 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 the people for whom a 401K isn't a retirement planning option, 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 each year.
For more info, please feel free 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 Highland Park area.
