Retirement Planning – Villa Park
For those in "Generation X" - described as folks born between the mid-1960s and the early 1980s - retirement planning seems like something your parents or other "old people" would do. But guess what? With a lot of "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" is definitely the next generation of men and women to reach old age. Sure, it's still a ways off, but people in their 30s and 40s have to begin 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 planning for retirement:
Retirement life in the future will be different than the retirement in the present day. It will be much better in some ways, and worse somewhat. However, 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 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. Therefore investment planning for retirement has to account for a longer time of time now than a generation or two back.
Social Security and Retiring - Villa Park
On the down side, Social Security is going to be a far less reliable income source 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 former employer. More and more, retired persons will need to rely on their financial savings to pay for the expenses of living and health insurance.
With individuals living longer and needing more cash to do so, retirement planning is an essential activity even for those who are half way to the regular retirement age of 65. It could 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 won't make it any less complicated.
Putting even just a little bit of cash into a savings account that works as a retirement savings plan can pay off later. 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 build up capital earning a small interest rate until there's enough to invest in a reliable security which will yield you more like a municipal bond.
Another good strategy which could surely and steadily build a nest egg is to put money into long-term bonds. On maturation of the bond, you will get back your initial investment and also all the interest that collected over the life of the bond. This is a significant 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 that you can ever make.
401K and IRA With Retirement - Villa Park
However, 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 isn't a retirement planning choice, 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 every year.
For more info, 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 Villa Park area.
