Retirement Planning – River Grove
For anyone in "Generation X" - described as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your mother and father or other "old people" would do. But you know what? With a lot of "baby boomers" either already in the midst of retirement or observing it in the near future, "Generation X" is the next generation of people to reach retirement. Sure, it's still a ways off, but people in their 30s and 40s must start centering their investment planning on retirement and ensuring they've got the type of retirement they are working hard to enjoy. Here are some tips on preparing 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 somewhat. However, 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 not too long 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 4 years more than the average life span in 1980. So 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 - River Grove
On the down side, Social Security will likely be a far less dependable source of income compared to now. And the likelihood is 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 former employer. Increasingly more, retirees will have to rely on their financial savings to cover the costs of just living and health insurance.
With individuals living longer and needing more cash to do so, retirement planning is a vital activity even for those who are half way to the regular retirement age of 65. It may be a daunting task to plan for a few decades into the future, particularly with bills, rents and home loans to pay today, but procrastinating will not make it any less complicated.
Putting even just a little bit of money now into a savings account which 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 pile up capital earning a small interest rate until there is enough to invest in a trusted security which 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. After maturation of the bond, you'll get back your initial investment along with all the interest which collected over the lifetime of the bond. This is a considerable 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 that you can ever make.
401K and IRA - River Grove
Nonetheless, 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 is not 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 annually.
For more information, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We provide 401K and IRA rollover and review services for individuals in the River Grove area.
