Retirement Planning – La Grange, IL
For those in "Generation X" - defined as individuals born between the mid-1960s and also the early 1980s - retirement planning sounds like something your parents or other "old people" would do. But guess what? With a lot of "baby boomers" either already in the middle of retirement or observing it in the near future, "Generation X" is definitely the next generation of men and women to reach retirement. 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 have the type of retirement they are working hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement right now. It'll be better in some ways, and worse in some ways. But, the retirement planning for today's labor force needs to be far different than it was in earlier times.
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. Therefore investment planning for retirement has to account for a longer period of time now than a generation or two back.
Social Security and Retirement - La Grange, IL
On the downside, Social Security will probably be a far less trustworthy source of income compared to now. And also the odds are slim-and getting slimmer each 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 need to depend on their savings to pay for the expenses of just living and health insurance.
With people living for a longer time and needing extra money to do so, retirement planning is an essential activity even for those who are half way to the common 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 easier.
Putting even just a little bit of money now into a savings account which 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 provide a place where you can accumulate 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 good strategy which could certainly and gradually build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you will get back your initial investment along with all the interest which 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 good foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.
401K and IRA - La Grange, IL
However, the best approach when it comes to retirement planning would be to put cash in a 401K plan at your workplace 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 in this account is tax deferred and may be tax-deductible, depending on how much is invested every year.
For more details, please don't hesitate 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 folks in the La Grange, IL area.
