Retirement Planning – Niles
For those in "Generation X" - defined as folks born between the mid-1960s and the early 1980s - retirement planning seems like something your parents or other "old people" might do. But you know what? With a lot of "baby boomers" either already in the midst of retirement or looking at it in the near future, "Generation X" will be the next generation of folks to reach old age. Sure, it is a ways off, but people in their 30s and 40s should start 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 planning for retirement:
Retirement life in the foreseeable future will be different than the retirement right now. It'll be much better in some ways, and worse in some ways. But, the retirement planning for today's labor force must be far different than it was in earlier times.
On the bright side, people 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 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 Retirement - Niles
On the down side, Social Security is going to be a far less dependable source of income compared to 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 former employer. More and more, retired persons will need to depend on their savings to pay for the costs of living and medical 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 sixty-five. It may 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 will not make it any less difficult.
Placing even just a little bit of cash into a savings account that serves as a retirement savings plan can pay off in the future. The interest you get on money in a savings account will allow your preliminary investments to grow to something sustainable. A savings account will provide a place where you can build up capital earning a little interest rate until there is enough to invest in a trusted security that will yield you more like a municipal bond.
Another good strategy that can certainly and gradually build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you'll 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 that can 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 - Niles
Nonetheless, 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 the 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 may be tax-deductible, depending on how much is invested every year.
For more information, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we'll be glad to help you! We provide 401K and IRA rollover and review services for individuals in the Niles area.
