Retirement Planning – Harwood Heights
For the people in "Generation X" - defined as people born between the mid-1960s and also the early 1980s - retirement planning may sound like something your mother and father or other "old people" might do. But you know what? With a lot of "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" stands out as the next generation of individuals 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 sure they have the type of retirement they are working so hard to have. 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 better in some ways, and worse somewhat. But, the retirement planning for today's workforce must be far different than it was in the past.
On the bright side, folks 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 greater 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 back.
Social Security and Retirement - Harwood Heights
On the down side, Social Security will probably be a far less trustworthy income source compared to now. And also the odds are slim-and getting slimmer every year-that retirees 20 and 30 years from now will be able to rely on a work pension and enjoy lifetime benefits from their previous employer. Increasingly more, retired persons will need to depend on their savings to pay for the costs of just living and health insurance.
With people living for a longer time and needing more money to do so, retirement planning is a vital activity even for those people who are halfway to the standard retirement age of sixty-five. It may be a daunting task to plan for a few decades into the future, particularly with bills, housing costs and mortgages to pay today, but procrastinating won't make it any easier.
Placing even just a small amount of money now into a savings account which functions as a retirement savings plan can pay off later. The interest you receive 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 build up capital earning a small interest rate until there's enough to invest in a trusted security that will yield you more like a municipal bond.
Another solid approach which could certainly and gradually build a nest egg is to put money into long-term bonds. After maturation of the bond, you'll get back your initial investment along with all the interest which collected over the life of the bond. This is a significant amount of money for a 20- or 30-year bond-money which could provide a great foundation for retirement. And a municipal or government bond is really as safe an investment that you can ever make.
401K and IRA With Retirement - Harwood Heights
Nonetheless, 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 placed in this account is tax deferred and might be tax-deductible, depending on how much is invested every year.
For more details, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we'll be happy to help you! We provide 401K and IRA rollover and review services for individuals in the Harwood Heights area.
