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Retirement Planning – Minooka

For the people in "Generation X" - defined as people born between the mid-1960s and also the early 1980s - retirement planning seems like something your mother and father or other "old people" might do. But guess what? With lots of "baby boomers" either already in the midst of retirement or observing it in the near future, "Generation X" stands out as the next generation of individuals to reach retirement. Sure, it is a ways off, but those in their 30s and 40s have to start centering their investment planning on retirement and making sure they have 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 of today. It will likely be far better in some ways, and worse somewhat. However, the retirement planning for today's labor force needs to be far different than it was in yesteryear.

On the bright side, people 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 more than the average life span in 1990 and more than four 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 Retirement - Minooka

On the downside, Social Security will likely be a far less reliable income source 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 workplace. Increasingly more, retirees will need to depend on their savings to cover the costs of just living and medical health insurance.

With people living for a longer time and needing more money to do so, retirement planning is an essential activity even for those who are halfway to the standard retirement age of 65. It could be a daunting task to plan for a few decades into the future, particularly with bills, rents and mortgages to pay right now, but procrastinating will not make it any less difficult.

Putting even just a small amount of money now into a savings account which works 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 pile up capital earning a little interest rate until there's enough to invest in a trusted security that will yield you more like a municipal bond.

Another good strategy that may surely and steadily build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you will get back your initial investment and also all the interest which collected over the life of the bond. This is a tremendous amount of money for a 20- or 30-year bond-money that may 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 With Retirement - Minooka

However, the best approach when it comes to retirement planning would be 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 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 info, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We offer 401K and IRA rollover and review services for individuals in the Minooka area.

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