Retirement Planning – Westmont
For anyone in "Generation X" - described as people born between the mid-1960s and also the early 1980s - retirement planning may sound like something your mother and father or other "old people" might do. But guess what? With lots of "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" is the next generation of men and women to reach retirement. Sure, it's still a ways off, but people in their 30s and 40s will need to start centering their investment planning on retirement and ensuring they have the sort of retirement they are working hard to have. Here are some tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It will likely be far better in some ways, and worse in some ways. But, the retirement planning for today's workforce must be far different than it was in the past.
On the bright side, people 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 over 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 ago.
Social Security and Retiring - Westmont
On the down side, Social Security will probably be a far less reliable source of income than it is 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 have to rely on their financial savings to cover the expenses of just living and health insurance.
With people living for a longer time and needing more money to do so, retirement planning is a vital activity even for those who are half way to the standard retirement age of 65. It can be a daunting 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 money now into a savings account that serves 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 offer a place where you can accumulate capital earning a little interest rate until there's enough to invest in a reliable security which will yield you more like a municipal bond.
Another solid strategy that can certainly 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 that collected over the lifetime of the bond. That's a considerable amount of money for a 20- or 30-year bond-money that can 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 - Westmont
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 those for whom a 401K is not a retirement planning option, 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 details, please feel free 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 folks in the Westmont area.
