Retirement Planning – Techny
For those in "Generation X" - described as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your parents or other "old people" might do. But guess what? With many "baby boomers" either already in the middle of retirement or observing it in the near future, "Generation X" is definitely the next generation of individuals to reach old age. Sure, it is still a ways off, but those in their 30s and 40s ought to start focusing their investment planning on retirement and making certain they've got the type of retirement they are working so 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 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 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 now than a generation or two ago.
Social Security and Retirement - Techny
On the downside, Social Security will probably be a far less reliable income source compared to now. And the odds are 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 previous employer. Increasingly more, retired people will need to rely on their savings to pay for the expenses of living and medical health insurance.
With folks living longer and needing more money to do so, retirement planning is an essential activity even for those people who are halfway to the standard retirement age of sixty-five. It can be an intimidating task to plan for a few decades into the future, especially 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 works as a retirement savings plan can pay off in the future. The interest you receive 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 pile up capital earning a small interest rate until there is enough to invest in a reliable security that will yield you more like a municipal bond.
Another good approach that could surely and gradually build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll get back your initial investment and also all the interest that collected over the life of the bond. This is a tremendous amount of money for a 20- or 30-year bond-money that could provide a nice foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.
401K and IRA - Techny
Nonetheless, the best approach when it comes to retirement planning is to put cash 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 into this account is tax deferred and may be tax-deductible, depending on how much is invested each year.
For more info, please don't hesitate 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 Techny area.
