Retirement Planning – Melrose Park, Illinois
For the people in "Generation X" - described as individuals born between the mid-1960s and the early 1980s - retirement planning seems like something your mother and father 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" will be the next generation of people to reach old age. Sure, it's still a ways off, but people in their 30s and 40s have to begin centering their investment planning on retirement and making sure they have the kind of retirement they are working hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the 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 days gone by.
On the bright side, individuals are living longer than ever. As of not too long 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. Therefore investment planning for retirement has to account for a longer time of time right now than a generation or two back.
Social Security and Retirement - Melrose Park, Illinois
On the downside, Social Security will likely be a far less dependable income source compared to now. And 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 employer. Increasingly more, retirees will have to rely on their savings to pay for the expenses of living and medical health insurance.
With people living for a longer time and needing additional money to do so, retirement planning is an essential activity even for those people who are half way to the regular retirement age of 65. It can 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 will not make it any less difficult.
Putting even just a little bit of cash into a savings account that serves as a retirement savings plan can pay off later on. 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's enough to invest in a trusted security which will yield you more like a municipal bond.
Another good strategy which could surely and progressively build a nest egg is to put money into long-term bonds. On maturation of the bond, you will get back your initial investment along with all the interest that collected over the life of the bond. That's a considerable 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 as you can ever make.
401K and IRA With Retirement - Melrose Park, Illinois
However, the best approach when it comes to retirement planning would be to put funds in a 401K plan at your workplace or in an IRA opened with an investment house. For people for whom a 401K isn't a retirement planning choice, an IRA is the next best thing. Money put in this account is tax deferred and might 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 Melrose Park, Illinois area.
