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Retirement Planning – Lake Forest

For anyone in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your mother and father or other "old people" might do. But you know what? With a lot of "baby boomers" either already in the middle of retirement or observing it in the near future, "Generation X" is the next generation of people to reach retirement. Sure, it is a ways off, but people in their 30s and 40s must begin focusing their investment planning on retirement and ensuring they have the sort of retirement they are working hard to have. Below are great tips on planning for retirement:

Retirement life in the foreseeable future will be different than the retirement of today. It will likely 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 days gone by.

On the bright side, people 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 more than the average life span in 1990 and more than 4 years more than the average life span in 1980. Therefore investment planning for retirement has to account for an extended period of time now than a generation or two in the past.

Social Security and Retiring - Lake Forest

On the downside, Social Security will likely be a far less dependable income source compared to now. And 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 former employer. More and more, retired people will have to depend on their savings to pay for the expenses of just living and medical health insurance.

With individuals living longer and needing more money to do so, retirement planning is a vital activity even for those who are halfway to the common retirement age of 65. It can be an intimidating task to plan for a couple of decades into the future, especially with bills, housing costs and home loans to pay right now, but procrastinating won't make it any less complicated.

Placing even just a little bit of cash into a savings account that works 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 accumulate 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 approach that could certainly and steadily build a nest egg is to put money into long-term bonds. After maturation of the bond, you'll get back your initial investment as well as 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 great foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.

401K and IRA With Retirement - Lake Forest

Nevertheless, 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 those 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 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 will be happy to help you! We provide 401K and IRA rollover and review services for individuals in the Lake Forest area.

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