Retirement Planning – La Grange Park
For those in "Generation X" - defined 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" might do. But guess what? With many "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" stands out as the next generation of men and women to reach retirement. Sure, it is a ways off, but people in their 30s and 40s need to begin focusing their investment planning on retirement and making certain they've got the type of retirement they are working so hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement right now. It will likely be better in some ways, and worse in some ways. However, the retirement planning for today's workforce needs to be far different than it was in earlier times.
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 4 years more than the average life span in 1980. So investment planning for retirement has to account for a longer time of time right now than a generation or two ago.
Social Security and Retirement - La Grange Park
On the downside, Social Security is going to be a far less trustworthy source of income than it is now. And also the odds are slim-and getting slimmer every year-that retirees 20 and 30 years from right now will be able to rely on a work pension and enjoy lifetime benefits from their former workplace. More and more, retired people will need to rely on their financial savings to pay for the costs of just living and medical health insurance.
With individuals living longer and needing more cash to do so, retirement planning is a vital activity even for those who are half way to the common retirement age of 65. It could be an intimidating task to plan for a few decades into the future, especially with bills, housing costs and home loans 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 supply a place where you can accumulate capital earning a small interest rate until there's enough to invest in a trusted security that will yield you more like a municipal bond.
Another solid strategy that can surely and progressively build a nest egg is to put money into long-term bonds. After maturation of the bond, you'll get back your initial investment along with all the interest that collected over the lifetime of the bond. This is a significant amount of money for a 20- or 30-year bond-money that can 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 Park
However, the best approach when it comes to retirement planning is to put funds 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 placed in this account is tax deferred and might 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'll be glad to help you! We offer 401K and IRA rollover and review services for individuals in the La Grange Park area.
