Retirement Planning – Harwood Heights
For the people in "Generation X" - described as folks born between the mid-1960s and the early 1980s - retirement planning may sound like something your parents or other "old people" might do. But you know what? With lots of "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" stands out as the next generation of people to reach old age. Sure, it is a ways off, but those in their 30s and 40s must begin focusing their investment planning on retirement and making certain they have the type of retirement they are working so hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement of today. It will likely be much 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 the past.
On the bright side, people 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. Therefore investment planning for retirement has to account for a longer period of time now than a generation or two ago.
Social Security and Retiring - Harwood Heights
On the down side, Social Security is going to be a far less dependable income source compared to now. And 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 workplace. More and more, retirees will need to rely on their financial savings to cover the costs of living and medical health insurance.
With folks living for a longer time and needing more cash to do so, retirement planning is an essential activity even for those who are halfway to the regular retirement age of sixty-five. It can 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 complicated.
Placing even just a small amount of cash into a savings account which serves 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 supply a place where you can accumulate capital earning a little interest rate until there is enough to invest in a reliable security which will yield you more like a municipal bond.
Another solid strategy that may surely and progressively build a nest egg is to invest in long-term bonds. After maturation of the bond, you will get back your initial investment as well as all the interest which collected over the lifetime of the bond. This is a significant 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 as you can ever make.
401K and IRA - Harwood Heights
However, 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 people for whom a 401K isn't a retirement planning option, an IRA is the next best thing. Money put into this account is tax deferred and may be tax-deductible, depending on how much is invested each year.
For more information, please feel free to contact GC Financial Advisors Ltd. at any time and we'll be glad to help you! We provide 401K and IRA rollover and review services for individuals in the Harwood Heights area.
