Retirement Planning – Willowbrook
For anyone in "Generation X" - described as individuals born between the mid-1960s and the early 1980s - retirement planning seems like something your mother and father or other "old people" might do. But guess what? With a lot of "baby boomers" either already in the midst of retirement or observing it in the near future, "Generation X" will be the next generation of people to reach old age. Sure, it is still a ways off, but people in their 30s and 40s must begin centering their investment planning on retirement and making certain they've got the type of retirement they are working so hard to have. 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 much better in some ways, and worse somewhat. However, the retirement planning for today's labor force needs to 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 four years more than the average life span in 1980. Therefore investment planning for retirement has to account for an extended period of time right now than a generation or two in the past.
Social Security and Retirement - Willowbrook
On the downside, Social Security is going to 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 right now will be able to rely on a work pension and enjoy lifetime benefits from their previous employer. Increasingly more, retired persons will have to rely on their financial savings to cover the expenses of living and medical health insurance.
With individuals living for a longer time and needing more cash to do so, retirement planning is an essential activity even for those who are halfway to the standard retirement age of 65. It could be an intimidating 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 difficult.
Placing even just a small amount of money now into a savings account that works as a retirement savings plan can pay off in the future. The interest you get on money in a savings account will allow your preliminary 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 trusted security which will yield you more like a municipal bond.
Another good strategy that can surely and steadily build a nest egg is to invest in 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 tremendous 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 With Retirement - Willowbrook
However, the best approach when it comes to retirement planning would be to put money in a 401K plan at work or in an IRA opened with an investment house. For 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 each year.
For more information, please feel free to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We offer 401K and IRA rollover and review services for folks in the Willowbrook area.
