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Retirement Planning – Lincolnwood

For anyone in "Generation X" - defined as folks born between the mid-1960s and also the early 1980s - retirement planning seems like something your parents or other "old people" would do. But you know what? With a lot of "baby boomers" either already in the middle of retirement or viewing it on the horizon, "Generation X" stands out as the next generation of people to reach old age. Sure, it is a ways off, but people in their 30s and 40s will need to start focusing their investment planning on retirement and ensuring they've got the sort of retirement they are working so hard to have. Below are great tips on preparing for retirement:

Retirement life in the future will be different than the retirement of today. It will be much better in some ways, and worse somewhat. However, the retirement planning for today's labor force needs to be far different than it was in days gone by.

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

Social Security and Retiring - Lincolnwood

On the downside, Social Security will probably be a far less trustworthy income source compared to now. And also the odds are slim-and getting slimmer each 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 previous employer. More and more, retired people will have to depend on their financial savings to pay for the expenses of living and medical health insurance.

With folks living longer and needing more cash to do so, retirement planning is an essential activity even for those people who are halfway to the regular retirement age of 65. It could be an intimidating task to plan for a few decades into the future, particularly with bills, rents and mortgages to pay today, but procrastinating won't make it any easier.

Placing even just a little bit of cash into a savings account that functions as a retirement savings plan can pay off later. The interest you receive on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will offer a place where you can accumulate capital earning a little interest rate until there is enough to invest in a trusted security which will yield you more like a municipal bond.

Another solid approach that may 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 may provide a great foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.

401K and IRA - Lincolnwood

However, the best approach when it comes to retirement planning is to put money in a 401K plan at work or in an IRA opened with an investment house. For the people for whom a 401K is not a retirement planning choice, an IRA is the next best thing. Money put into this account is tax deferred and might be tax-deductible, depending on how much is invested annually.

For more info, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We provide 401K and IRA rollover and review services for individuals in the Lincolnwood area.

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