Retirement Planning – Mchenry Fox River Grove, IL
For anyone in "Generation X" - defined 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" will be the next generation of individuals to reach old age. Sure, it's still a ways off, but those in their 30s and 40s need to start focusing their investment planning on retirement and making sure they've got the type of retirement they are working hard to enjoy. Below are great tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It'll 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 earlier times.
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 over the average life span in 1990 and more than four 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 in the past.
Social Security and Retiring - Mchenry Fox River Grove, IL
On the down side, Social Security is going to be a far less trustworthy source of income compared to now. And the odds are 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. More and more, retired people will have to rely on their financial savings to cover the expenses of living and medical health insurance.
With people living for a longer time and needing more money to do so, retirement planning is a vital activity even for those 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, especially with bills, housing costs and mortgages to pay right now, but procrastinating will not make it any less complicated.
Putting even just a little bit of cash into a savings account that works as a retirement savings plan can pay off later. The interest you receive on money in a savings account will allow your preliminary investments to grow to something sustainable. A savings account will offer a place where you can pile up capital earning a small interest rate until there is enough to invest in a trusted security which will yield you more like a municipal bond.
Another good strategy which could certainly and steadily 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 lifetime of the bond. That's a considerable 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 as safe an investment as you can ever make.
401K and IRA - Mchenry Fox River Grove, IL
However, the best approach when it comes to retirement planning is 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 option, an IRA is the next best thing. Money placed in this account is tax deferred and might be tax-deductible, depending on how much is invested each year.
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 Fox River Grove, IL area.
