Retirement Planning – Lincolnshire, Illinois
For the people in "Generation X" - described as folks born between the mid-1960s and the early 1980s - retirement planning sounds like something your mother and father or other "old people" would do. But you know what? With many "baby boomers" either already in the midst of retirement or looking at it on the horizon, "Generation X" stands out as the next generation of folks to reach old age. Sure, it is still a ways off, but people in their 30s and 40s have to begin centering their investment planning on retirement and ensuring they have the type of retirement they are working so hard to enjoy. Below are great tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It will likely be much 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, 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 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 Retirement - Lincolnshire, Illinois
On the downside, Social Security will likely be a far less dependable income source than it is now. And 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 previous workplace. Increasingly more, retired persons will have to rely on their savings to pay for the costs of just living and health insurance.
With people living longer and needing more cash to do so, retirement planning is an essential activity even for those who are half way to the regular 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 mortgages to pay today, but procrastinating won't make it any easier.
Putting even just a little bit of money now into a savings account that serves as a retirement savings plan can pay off later on. The interest you receive on money in a savings account will allow your preliminary 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's enough to invest in a reliable security which will yield you more like a municipal bond.
Another solid strategy that may certainly and gradually build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you will get back your initial investment along with all the interest that collected over the life of the bond. That's a considerable amount of money for a 20- or 30-year bond-money that may provide a good foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA - Lincolnshire, Illinois
Nonetheless, 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 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 annually.
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 offer 401K and IRA rollover and review services for folks in the Lincolnshire, Illinois area.