Retirement Planning – Winfield

For anyone in "Generation X" - defined as people 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 you know what? With lots of "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" stands out as the next generation of folks to reach old age. Sure, it's still a ways off, but people in their 30s and 40s ought to start focusing their investment planning on retirement and ensuring they have the kind of retirement they are working so hard to enjoy. Below are great tips on preparing for retirement:

Retirement life in the future will be different than the retirement in the present day. It'll 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 yesteryear.

On the bright side, folks 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 more than 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 an extended period of time now than a generation or two back.

Social Security and Retiring - Winfield

On the down side, Social Security will probably be a far less trustworthy income source compared to now. And also the likelihood is 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 people will need to rely on their financial savings to cover the costs of just living and health insurance.

With people living longer and needing more cash to do so, retirement planning is a vital activity even for those who are half way to the regular retirement age of 65. It may be an intimidating task to plan for a couple of decades into the future, particularly with bills, rents and home loans to pay right now, but procrastinating won't make it any less complicated.

Putting even just a small amount of money now into a savings account that functions 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 offer 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 solid approach that could certainly and gradually 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 lifetime of the bond. That's a significant amount of money for a 20- or 30-year bond-money that 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 With Retirement - Winfield

However, the best approach when it comes to retirement planning is to put cash 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 option, an IRA is the next best thing. Money put in this account is tax deferred and might be tax-deductible, depending on how much is invested annually.

For more details, please don't hesitate 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 Winfield area.