Retirement Planning – Naperville
For anyone in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your mother and father or other "old people" might do. But you know what? With lots of "baby boomers" either already in the middle of retirement or looking at it in the near future, "Generation X" stands out as the next generation of men and women to reach retirement. Sure, it's still a ways off, but those in their 30s and 40s need to begin focusing their investment planning on retirement and ensuring they've got the type of retirement they are working so hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It'll be far better in some ways, and worse in some ways. However, the retirement planning for today's labor force needs to be far different than it was in days gone by.
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 - Naperville
On the down side, Social Security is going to be a far less reliable income source 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 workplace. More and more, retired people will have to rely on their savings to cover the expenses of living and health insurance.
With people living longer and needing more money to do so, retirement planning is a vital activity even for those people who are half way 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, housing costs and mortgages to pay right now, but procrastinating won't make it any less difficult.
Putting even just a small amount of cash into a savings account that serves as a retirement savings plan can pay off later on. 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 pile up capital earning a little interest rate until there is enough to invest in a reliable security which will yield you more like a municipal bond.
Another good strategy that could surely and gradually build a nest egg is to put money into long-term bonds. On maturation of the bond, you'll get back your initial investment along with all the interest that collected over the lifetime of the bond. This is a significant amount of money for a 20- or 30-year bond-money that could provide a good foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.
401K and IRA - Naperville
Nonetheless, the best approach when it comes to retirement planning would be to put funds in a 401K plan at work or in an IRA opened with an investment house. For people for whom a 401K isn't a retirement planning option, 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 each year.
For more info, please feel free 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 Naperville area.
