Retirement Planning Company – Prospect Heights
For those in "Generation X" - described 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 lots of "baby boomers" either already in the midst of retirement or viewing it in the near future, "Generation X" is definitely the next generation of people to reach old age. Sure, it's still a ways off, but those in their 30s and 40s have to start centering their investment planning on retirement and ensuring they have the kind of retirement they are working hard to enjoy. Below are great tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It'll be much better in some ways, and worse somewhat. However, the retirement planning for today's workforce must be far different than it was in earlier times.
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 greater 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 time of time right now than a generation or two in the past.
Social Security and Retiring - Prospect Heights
On the downside, Social Security will likely be a far less reliable source of income than it is now. And the odds are slim-and getting slimmer each 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. More and more, retirees will have to depend on their financial savings to pay for the expenses of just living and health insurance.
With people living for a longer time and needing extra money to do so, retirement planning is an essential activity even for those people who are halfway to the regular retirement age of sixty-five. It may be an intimidating task to plan for a few decades into the future, particularly with bills, housing costs and mortgages to pay right now, but procrastinating will not make it any less complicated.
Putting even just a small amount of cash into a savings account that functions as a retirement savings plan can pay off later on. The interest you receive 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 pile up capital earning a little interest rate until there's enough to invest in a trusted security which will yield you more like a municipal bond.
Another solid approach that can certainly and steadily build a nest egg is to invest in long-term bonds. On maturation of the bond, you will get back your initial investment and also all the interest that collected over the lifetime of the bond. That's a significant amount of money for a 20- or 30-year bond-money that can provide a nice 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 - Prospect Heights
Nevertheless, the best approach when it comes to retirement planning would be to put money in a 401K plan at work or in an IRA opened with an investment house. For those for whom a 401K is not 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 information, 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 folks in the Prospect Heights area.
