Retirement Planning – Hillside
For the people in "Generation X" - described as individuals born between the mid-1960s and also the early 1980s - retirement planning may sound like something your mother and father or other "old people" might do. But guess what? With lots of "baby boomers" either already in the middle of retirement or looking at it on the horizon, "Generation X" will be the next generation of individuals to reach old age. Sure, it is a ways off, but people in their 30s and 40s will need to begin focusing their investment planning on retirement and ensuring they have the kind of retirement they are working so hard to enjoy. Here are some tips on planning for retirement:
Retirement life in the future will be different than the retirement in the present day. It'll be far better in some ways, and worse in some ways. However, the retirement planning for today's workforce must be far different than it was in yesteryear.
On the bright side, folks 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 over 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 an extended period of time now than a generation or two ago.
Social Security and Retirement - Hillside
On the downside, Social Security will probably be a far less trustworthy source of income than it is now. And 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 former employer. More and more, retirees will have to depend on their financial savings to pay for the expenses of just living and medical health insurance.
With individuals living for a longer time and needing more cash to do so, retirement planning is an essential activity even for those people who are half way to the standard retirement age of 65. It can be a daunting task to plan for a couple of decades into the future, especially with bills, rents and mortgages to pay today, but procrastinating will not make it any less complicated.
Placing even just a little bit of money now into a savings account that serves 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 give you a place where you can pile up capital earning a small interest rate until there is enough to invest in a trusted security that will yield you more like a municipal bond.
Another good strategy which could certainly and gradually build a nest egg is to invest in long-term bonds. After maturation of the bond, you will get back your initial investment along with 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 nice foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.
401K and IRA - Hillside
Nevertheless, 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 put into this account is tax deferred and may be tax-deductible, depending on how much is invested annually.
For more information, please feel free to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We offer 401K and IRA rollover and review services for individuals in the Hillside area.
