Retirement Planning – Mchenry Fox River Grove
For anyone in "Generation X" - defined as folks born between the mid-1960s and the early 1980s - retirement planning may sound like something your parents or other "old people" would do. But guess what? With a lot of "baby boomers" either already in the midst of retirement or viewing it on the horizon, "Generation X" is definitely the next generation of men and women to reach retirement. Sure, it is a ways off, but those in their 30s and 40s really need to begin centering their investment planning on retirement and ensuring they have the type of retirement they are working so hard to have. Here are some tips on planning for retirement:
Retirement life in the future will be different than the retirement of today. It will likely be much better in some ways, and worse in some ways. However, the retirement planning for today's workforce must be far different than it was in the past.
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 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 ago.
Social Security and Retiring - Mchenry Fox River Grove
On the down side, Social Security will probably 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, retirees will need to rely on their financial savings to cover the expenses of just living and health insurance.
With people living for a longer time and needing more cash to do so, retirement planning is an essential activity even for those people who are halfway to the common retirement age of 65. It may be an intimidating task to plan for a couple of decades into the future, especially with bills, rents and mortgages to pay today, but procrastinating will not make it any less complicated.
Putting even just a small amount of cash into a savings account that 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 provide 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 approach that could surely and steadily build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll get back your initial investment and also all the interest that collected over the lifetime of the bond. That's a significant amount of money for a 20- or 30-year bond-money that could provide a great foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA - Mchenry Fox River Grove
Nonetheless, the best approach when it comes to retirement planning is to put cash 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 may be tax-deductible, depending on how much is invested every year.
For more information, please don't 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 folks in the Mchenry Fox River Grove area.
