Retirement Planning Services – South Elgin
For anyone in "Generation X" - described as folks born between the mid-1960s and the early 1980s - retirement planning sounds like something your parents or other "old people" would do. But you know what? With many "baby boomers" either already in the midst of retirement or looking at it on the horizon, "Generation X" is the next generation of folks to reach old age. Sure, it is still a ways off, but people in their 30s and 40s need to start centering their investment planning on retirement and making sure they have the type of retirement they are working hard to have. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement right now. It will 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 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 now than a generation or two in the past.
Social Security and Retirement - South Elgin
On the down side, Social Security will probably be a far less dependable 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. Increasingly more, retirees will need to rely on their savings to pay for the costs of living and medical health insurance.
With individuals living for a longer time and needing additional money to do so, retirement planning is an essential activity even for those who are halfway to the common retirement age of 65. It may be an intimidating task to plan for a couple of decades into the future, particularly with bills, rents and home loans to pay today, but procrastinating will not make it any easier.
Putting even just a little bit of cash into a savings account which functions as a retirement savings plan can pay off in the future. The interest you get on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will provide a place where you can acquire 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 approach which could 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 along with all the interest which collected over the lifetime of the bond. That's a tremendous amount of money for a 20- or 30-year bond-money which could 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 - South Elgin
However, the best approach when it comes to retirement planning is to put money 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 choice, 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 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 South Elgin area.
