Retirement Planning – Kenilworth
For those in "Generation X" - described as folks born between the mid-1960s and also the early 1980s - retirement planning seems like something your parents or other "old people" might do. But guess what? With lots of "baby boomers" either already in the midst of retirement or viewing it in the near future, "Generation X" is the next generation of individuals to reach old age. Sure, it is still a ways off, but people in their 30s and 40s will need to begin focusing their investment planning on retirement and ensuring they have the type of retirement they are working hard to have. Here are some tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement right now. It will likely be better in some ways, and worse somewhat. However, the retirement planning for today's labor force must be far different than it was in yesteryear.
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 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 right now than a generation or two ago.
Social Security and Retiring - Kenilworth
On the down side, Social Security will probably be a far less reliable 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. Increasingly more, retirees will have to rely on their savings to cover the expenses of living and health insurance.
With folks living for a longer time and needing extra money to do so, retirement planning is an essential activity even for those people who are half way to the standard retirement age of sixty-five. It may be an intimidating task to plan for a couple of decades into the future, especially with bills, rents and mortgages to pay today, but procrastinating won't make it any easier.
Putting even just a little bit of money now into a savings account which functions as a retirement savings plan can pay off later on. The interest you receive on money in a savings account will allow your preliminary investments to grow to something sustainable. A savings account will supply a place where you can accumulate capital earning a small 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 certainly and progressively build a nest egg is to put money into long-term bonds. On maturation of the bond, you'll get back your initial investment along with all the interest which collected over the life of the bond. That's a significant amount of money for a 20- or 30-year bond-money that may provide a nice foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.
401K and IRA - Kenilworth
Nevertheless, the best approach when it comes to retirement planning would be to put money in a 401K plan at work or in an IRA opened with an investment house. For those 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 may be tax-deductible, depending on how much is invested annually.
For more details, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We provide 401K and IRA rollover and review services for folks in the Kenilworth area.
