Retirement Planning – Aurora
For anyone in "Generation X" - defined 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 many "baby boomers" either already in the midst of retirement or looking at it on the horizon, "Generation X" is the next generation of people to reach old age. Sure, it's still a ways off, but people in their 30s and 40s have to begin focusing their investment planning on retirement and making certain they have the type of retirement they are working hard to have. Here are some tips on planning for retirement:
Retirement life in the 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 earlier times.
On the bright side, folks are living longer than ever. As of a short while 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 four years more than the average life span in 1980. So investment planning for retirement has to account for a longer time of time right now than a generation or two in the past.
Social Security and Retirement - Aurora
On the down side, Social Security will probably 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 right now will be able to rely on a work pension and enjoy lifetime benefits from their previous employer. More and more, retired persons will need to rely on their savings to cover the expenses of living and health insurance.
With individuals living for a longer time and needing extra money to do so, retirement planning is an essential activity even for those people who are half way to the standard retirement age of 65. It can be an intimidating task to plan for a few decades into the future, particularly with bills, housing costs and home loans to pay today, but procrastinating won't make it any easier.
Putting even just a little bit of cash into a savings account which 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 supply a place where you can acquire 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 good strategy that can surely and steadily build a nest egg is to invest in long-term bonds. After maturation of the bond, you will get back your initial investment and also 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 that can 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 - Aurora
However, the best approach when it comes to retirement planning would be to put funds in a 401K plan at your workplace or in an IRA opened with an investment house. For those for whom a 401K isn't a retirement planning choice, 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 each year.
For more details, 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 Aurora area.
