Retirement Planning – Lockport, IL
For anyone in "Generation X" - defined as individuals born between the mid-1960s and also the early 1980s - retirement planning seems like something your parents or other "old people" would do. But guess what? With lots of "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" will be the next generation of individuals to reach old age. Sure, it's still a ways off, but people in their 30s and 40s ought to begin focusing their investment planning on retirement and making sure they have the type 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 of today. It will be better in some ways, and worse in some ways. But, the retirement planning for today's workforce must 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 over 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 right now than a generation or two ago.
Social Security and Retirement - Lockport, IL
On the down side, Social Security is going to be a far less dependable income source than it is now. And also the likelihood is 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 previous workplace. Increasingly more, retired persons will have to depend on their financial savings to pay for the costs of living and medical health insurance.
With people living longer and needing additional money to do so, retirement planning is a vital activity even for those people who are halfway to the regular retirement age of 65. It could be a daunting task to plan for a few decades into the future, particularly with bills, housing costs 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 which functions as a retirement savings plan can pay off in the future. The interest you receive on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will provide a place where you can build up capital earning a small interest rate until there is enough to invest in a reliable security that will yield you more like a municipal bond.
Another solid approach which could certainly and steadily build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you'll get back your initial investment and also 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 which could provide a good foundation for retirement. And a municipal or government bond is really as safe an investment as you can ever make.
401K and IRA - Lockport, IL
However, the best approach when it comes to retirement planning is to put money in a 401K plan at your workplace or in an IRA opened with an investment house. For 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 information, please do not 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 Lockport, IL area.
