Retirement Planning – Naperville, Illinois
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" might do. But you know what? With many "baby boomers" either already in the midst of retirement or viewing it on the horizon, "Generation X" is the next generation of individuals to reach retirement. Sure, it is a ways off, but those in their 30s and 40s have to begin focusing their investment planning on retirement and ensuring 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 will be 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 the past.
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 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 - Naperville, Illinois
On the downside, Social Security is going to be a far less trustworthy source of income than it is now. And the odds are slim-and getting slimmer each 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, retirees will have to depend on their financial savings to pay for the costs of living and health insurance.
With individuals 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 couple of decades into the future, particularly with bills, housing costs and mortgages to pay today, but procrastinating won't make it any less complicated.
Putting even just a little bit of cash into a savings account which 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 acquire capital earning a little interest rate until there is enough to invest in a reliable security that will yield you more like a municipal bond.
Another good strategy that may 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 and also all the interest which collected over the life of the bond. That's 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 really as safe an investment as you can ever make.
401K and IRA - Naperville, Illinois
Nevertheless, 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 those for whom a 401K isn't a retirement planning option, 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 annually.
For more info, please feel free to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We provide 401K and IRA rollover and review services for individuals in the Naperville, Illinois area.
