Retirement Planning – Lake Forest
For anyone in "Generation X" - defined as people born between the mid-1960s and also the early 1980s - retirement planning may sound like something your parents or other "old people" would do. But you know what? With many "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" is the next generation of individuals to reach old age. Sure, it is a ways off, but people in their 30s and 40s ought to start centering their investment planning on retirement and ensuring they've got the sort of retirement they are working so hard to have. Here are some tips on preparing for retirement:
Retirement life in the foreseeable 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 labor force 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 more 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 an extended period of time now than a generation or two back.
Social Security and Retiring - Lake Forest
On the downside, Social Security will likely be a far less reliable income source compared to 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 workplace. Increasingly more, retired persons will need to depend on their savings to pay for the expenses of living and medical health insurance.
With people living longer and needing more cash to do so, retirement planning is an essential activity even for those people who are halfway to the standard retirement age of sixty-five. It could be a daunting task to plan for a few decades into the future, especially with bills, rents and home loans to pay right now, but procrastinating won't make it any less difficult.
Placing even just a little bit of cash into a savings account which serves as a retirement savings plan can pay off in the future. The interest you receive on money in a savings account will allow your preliminary investments to grow to something sustainable. A savings account will give you a place where you can acquire capital earning a small interest rate until there is enough to invest in a reliable security which will yield you more like a municipal bond.
Another solid strategy that could certainly and gradually build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll get back your initial investment along with all the interest which collected over the life of the bond. That's a tremendous amount of money for a 20- or 30-year bond-money that could provide a nice foundation for retirement. And a municipal or government bond is really as safe an investment as you can ever make.
401K and IRA - Lake Forest
Nevertheless, 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 those for whom a 401K is not a retirement planning choice, 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 each year.
For more information, 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 folks in the Lake Forest area.
