Retirement Planning Services – Itasca, IL
For anyone in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning may sound like something your parents or other "old people" might do. But guess what? With a lot of "baby boomers" either already in the middle of retirement or observing it in the near future, "Generation X" is definitely the next generation of folks to reach retirement. Sure, it is a ways off, but those in their 30s and 40s will need to begin focusing their investment planning on retirement and ensuring they've got the kind of retirement they are working hard to enjoy. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement right now. It'll be far better in some ways, and worse in some ways. However, the retirement planning for today's workforce must be far different than it was in earlier times.
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 over 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 an extended period of time now than a generation or two ago.
Social Security and Retirement - Itasca, IL
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 now will be able to rely on a work pension and enjoy lifetime benefits from their former employer. Increasingly more, retirees will need to rely on their financial savings to pay for the costs of living and medical health insurance.
With individuals living longer and needing extra money to do so, retirement planning is a vital activity even for those people who are halfway to the standard retirement age of 65. It may be a daunting task to plan for a few decades into the future, particularly with bills, rents and home loans to pay right now, but procrastinating won't make it any less complicated.
Placing even just a small amount of money now into a savings account that serves as a retirement savings plan can pay off later on. 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 build up capital earning a little interest rate until there is enough to invest in a trusted security that will yield you more like a municipal bond.
Another solid strategy which could surely and gradually build a nest egg is to put money into long-term bonds. On maturation of the bond, you will get back your initial investment as well as all the interest that collected over the lifetime of the bond. This is a considerable amount of money for a 20- or 30-year bond-money which could 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 - Itasca, IL
Nevertheless, the best approach when it comes to retirement planning is to put cash in a 401K plan at your workplace 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 placed in this account is tax deferred and may be tax-deductible, depending on how much is invested every year.
For more information, please do not 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 individuals in the Itasca, IL area.
