Retirement Planning – Forest Park
For anyone in "Generation X" - described 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 many "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" will be the next generation of men and women to reach old age. Sure, it is a ways off, but those in their 30s and 40s should begin centering their investment planning on retirement and making sure they've got the sort of retirement they are working so hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It will be far better in some ways, and worse in some ways. 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, 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 4 years more than the average life span in 1980. Therefore investment planning for retirement has to account for a longer time of time right now than a generation or two ago.
Social Security and Retirement - Forest Park
On the down side, Social Security will probably be a far less dependable source of income than it is now. And also 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, retired persons will need to depend on their financial savings to cover the costs of just living and medical health insurance.
With individuals living longer and needing additional money to do so, retirement planning is a vital activity even for those who are half way to the regular retirement age of sixty-five. It could be a daunting task to plan for a couple of decades into the future, particularly with bills, rents and mortgages to pay today, but procrastinating will not make it any less difficult.
Placing even just a little bit of cash 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 pile up capital earning a little interest rate until there's enough to invest in a trusted security which will yield you more like a municipal bond.
Another good approach that may surely and steadily build a nest egg is to invest in long-term bonds. Upon maturation of the bond, you will get back your initial investment along with all the interest that collected over the lifetime of the bond. That's a tremendous amount of money for a 20- or 30-year bond-money that may provide a good foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.
401K and IRA - Forest Park
Nonetheless, 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 is not 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 don't hesitate to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We offer 401K and IRA rollover and review services for individuals in the Forest Park area.
