Retirement Planning – Highland Park
For anyone 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 lots of "baby boomers" either already in the midst of retirement or looking at it in the near future, "Generation X" is the next generation of folks to reach retirement. Sure, it is still a ways off, but people in their 30s and 40s need to start centering their investment planning on retirement and ensuring they've got the type of retirement they are working hard to have. Below are great tips on planning for retirement:
Retirement life in the future will be different than the retirement of today. It will be better in some ways, and worse somewhat. However, the retirement planning for today's labor force 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 greater 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 period of time now than a generation or two in the past.
Social Security and Retirement - Highland Park
On the down side, Social Security is going to be a far less trustworthy income source than it is now. And also the odds are 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. Increasingly more, retired persons will need to depend on their savings to pay for the expenses of living and health insurance.
With individuals living longer and needing more cash to do so, retirement planning is a vital activity even for those people who are halfway to the standard retirement age of 65. It could be a daunting task to plan for a couple of decades into the future, particularly with bills, rents and home loans to pay right now, but procrastinating won't make it any easier.
Putting even just a small amount of cash into a savings account that functions 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 supply a place where you can acquire capital earning a little interest rate until there's enough to invest in a reliable security that will yield you more like a municipal bond.
Another good strategy that could surely and gradually build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you will get back your initial investment and also all the interest that collected over the life of the bond. This is a significant amount of money for a 20- or 30-year bond-money that could provide a good foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.
401K and IRA - Highland Park
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 those 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 might be tax-deductible, depending on how much is invested each year.
For more info, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we'll be glad to help you! We provide 401K and IRA rollover and review services for individuals in the Highland Park area.
