Retirement Planning – Cicero
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 lots of "baby boomers" either already in the midst of retirement or viewing it on the horizon, "Generation X" stands out as the next generation of men and women to reach old age. Sure, it is still a ways off, but people in their 30s and 40s really need to begin centering their investment planning on retirement and making certain they have the type 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 of today. It'll be much better in some ways, and worse in some ways. However, the retirement planning for today's workforce needs to be far different than it was in the past.
On the bright side, people 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. So investment planning for retirement has to account for an extended period of time right now than a generation or two back.
Social Security and Retiring - Cicero
On the downside, Social Security is going to be a far less trustworthy income source compared to now. And also the likelihood is slim-and getting slimmer every 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 workplace. More and more, retired persons will have to depend on their savings to pay for the costs of living and health insurance.
With individuals living longer and needing more money to do so, retirement planning is a vital 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, particularly with bills, housing costs and mortgages to pay right now, but procrastinating won't make it any easier.
Putting even just a little bit of money now into a savings account that serves as a retirement savings plan can pay off in the future. The interest you receive 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 acquire 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 solid approach that can surely and steadily build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll 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 nice foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA With Retirement - Cicero
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 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 every year.
For more info, please don't hesitate 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 Cicero area.
