Retirement Planning Company – Itasca
For the people in "Generation X" - described 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 a lot of "baby boomers" either already in the midst of retirement or looking at it in the near future, "Generation X" stands out as the next generation of people to reach retirement. Sure, it's still a ways off, but those in their 30s and 40s must start centering their investment planning on retirement and making sure they've got the kind of retirement they are working hard to have. Here are some tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement in the present day. It'll be 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 the past.
On the bright side, individuals are living longer than ever. As of a short while 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. Therefore investment planning for retirement has to account for a longer period of time now than a generation or two back.
Social Security and Retiring - Itasca
On the down side, Social Security will probably be a far less reliable source of income compared to 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 former employer. More and more, retired persons will need to rely on their savings to pay for the costs of living and health insurance.
With individuals living for a longer time and needing extra money to do so, retirement planning is an essential activity even for those people who are half way to the common retirement age of 65. It could be a daunting task to plan for a couple of decades into the future, especially with bills, rents and home loans to pay right now, but procrastinating will not make it any less difficult.
Placing even just a little bit of money now into a savings account which serves 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 offer a place where you can build up capital earning a little interest rate until there is enough to invest in a reliable security that will yield you more like a municipal bond.
Another good approach that may surely and gradually build a nest egg is to put money into long-term bonds. On maturation of the bond, you will get back your initial investment and also all the interest which collected over the lifetime of the bond. That's a tremendous 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 - Itasca
Nonetheless, the best approach when it comes to retirement planning is to put funds 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 option, 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 annually.
For more information, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we'll be glad to help you! We offer 401K and IRA rollover and review services for folks in the Itasca area.
