Retirement Planning – Blue Island
For those in "Generation X" - described as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your parents or other "old people" would do. But you know what? With lots of "baby boomers" either already in the middle of retirement or viewing it in the near future, "Generation X" will be the next generation of people to reach retirement. Sure, it's still a ways off, but people in their 30s and 40s really need to start centering their investment planning on retirement and making certain they have the kind of retirement they are working so hard to enjoy. Here are some tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement in the present day. 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 days gone by.
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 greater 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 back.
Social Security and Retirement - Blue Island
On the downside, Social Security will probably be a far less reliable source of income than it is now. And the likelihood is 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 former workplace. More and more, retirees will need to rely on their savings to cover the costs of just living and medical health insurance.
With individuals living longer and needing more cash to do so, retirement planning is an essential activity even for those who are half way to the standard retirement age of 65. It could be an intimidating task to plan for a few decades into the future, especially with bills, housing costs and mortgages to pay right now, but procrastinating won't make it any less complicated.
Placing even just a little bit of money now 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 initial investments to grow to something sustainable. A savings account will give you a place where you can build up capital earning a small interest rate until there is enough to invest in a reliable security which will yield you more like a municipal bond.
Another good approach that may certainly and steadily build a nest egg is to put money into long-term bonds. On maturation of the bond, you'll get back your initial investment along with 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 may provide a nice foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.
401K and IRA - Blue Island
Nevertheless, the best approach when it comes to retirement planning is to put funds in a 401K plan at work or in an IRA opened with an investment house. For those 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 may be tax-deductible, depending on how much is invested annually.
For more information, 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 individuals in the Blue Island area.
