Retirement Planning – Mchenry Cary
For the people in "Generation X" - defined as individuals born between the mid-1960s and the early 1980s - retirement planning may sound 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 in the near future, "Generation X" is definitely the next generation of people to reach retirement. Sure, it's still a ways off, but those in their 30s and 40s will need to start focusing their investment planning on retirement and making certain they've got the sort of retirement they are working hard to have. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement right now. It will likely be much better in some ways, and worse somewhat. However, the retirement planning for today's labor force must be far different than it was in earlier times.
On the bright side, individuals are living longer than ever. As of a short while 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 4 years more than the average life span in 1980. Therefore investment planning for retirement has to account for a longer period of time now than a generation or two ago.
Social Security and Retiring - Mchenry Cary
On the down side, Social Security is going to be a far less trustworthy source of income than it is 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 previous employer. Increasingly more, retired people will need to rely on their financial savings to cover the costs of just living and health insurance.
With individuals living longer and needing additional money to do so, retirement planning is an essential activity even for those people 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, particularly with bills, rents and home loans to pay right now, but procrastinating will not make it any less difficult.
Putting even just a little bit of money now into a savings account which functions 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 offer a place where you can build up capital earning a small interest rate until there's enough to invest in a reliable security which will yield you more like a municipal bond.
Another solid strategy which could certainly and gradually build a nest egg is to invest in long-term bonds. After maturation of the bond, you'll get back your initial investment and also all the interest which collected over the lifetime of the bond. This is a tremendous amount of money for a 20- or 30-year bond-money which 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 - Mchenry Cary
Nonetheless, the best approach when it comes to retirement planning would be to put cash 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 details, please feel free to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We offer 401K and IRA rollover and review services for individuals in the Mchenry Cary area.
