Retirement Planning – Willow Springs
For those in "Generation X" - defined as individuals 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 guess what? With a lot of "baby boomers" either already in the middle of retirement or viewing it on the horizon, "Generation X" is definitely the next generation of individuals to reach old age. Sure, it is a ways off, but people in their 30s and 40s should start centering their investment planning on retirement and making sure 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 of today. It will likely be far better in some ways, and worse in some ways. But, the retirement planning for today's labor force must be far different than it was in earlier times.
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 4 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 - Willow Springs
On the down side, Social Security will likely be a far less trustworthy income source than it is now. And the likelihood is 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 former employer. More and more, retirees will have to depend on their financial savings to pay for the expenses of just living and medical health insurance.
With folks living longer and needing more cash to do so, retirement planning is a vital activity even for those who are halfway to the standard retirement age of 65. It may be a daunting task to plan for a couple of decades into the future, particularly with bills, housing costs and home loans to pay today, but procrastinating won't make it any less complicated.
Placing even just a small amount of cash into a savings account which serves as a retirement savings plan can pay off later. The interest you receive on money in a savings account will allow your preliminary 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 is enough to invest in a trusted security which will yield you more like a municipal bond.
Another good approach which could surely and gradually build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you will get back your initial investment as well as all the interest which collected over the lifetime of the bond. That's 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 really as safe an investment as you can ever make.
401K and IRA - Willow Springs
Nevertheless, the best approach when it comes to retirement planning would be to put funds 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 put into this account is tax deferred and may be tax-deductible, depending on how much is invested annually.
For more info, please feel free to contact GC Financial Advisors Ltd. at any time and we'll be glad to help you! We offer 401K and IRA rollover and review services for folks in the Willow Springs area.
