Retirement Planning Services – Lincolnwood
For those in "Generation X" - defined as folks born between the mid-1960s and the early 1980s - retirement planning sounds like something your parents or other "old people" might do. But guess what? With lots of "baby boomers" either already in the middle of retirement or looking at it on the horizon, "Generation X" will be the next generation of individuals to reach old age. Sure, it is a ways off, but people in their 30s and 40s must start focusing their investment planning on retirement and making sure they have the sort of retirement they are working so hard to have. Here are some tips on preparing for retirement:
Retirement life in the future will be different than the retirement in the present day. It'll be better in some ways, and worse somewhat. But, the retirement planning for today's labor force needs to be far different than it was in yesteryear.
On the bright side, folks are living longer than ever. As of a short while 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 four years more than the average life span in 1980. So investment planning for retirement has to account for a longer period of time now than a generation or two ago.
Social Security and Retirement - Lincolnwood
On the downside, Social Security will probably be a far less reliable source of income than it is 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 former workplace. Increasingly more, retired persons will need to depend on their financial savings to pay for the costs of living and health insurance.
With folks 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 common retirement age of 65. It could be an intimidating task to plan for a few decades into the future, especially with bills, rents and mortgages to pay right now, but procrastinating will not make it any less difficult.
Putting even just a little bit of cash into a savings account which serves as a retirement savings plan can pay off later. The interest you get on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will offer a place where you can pile up capital earning a small interest rate until there's enough to invest in a reliable security that will yield you more like a municipal bond.
Another solid approach which could surely 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 and also all the interest which collected over the life of the bond. That's a tremendous 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 as safe an investment that you can ever make.
401K and IRA - Lincolnwood
However, the best approach when it comes to retirement planning is 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 choice, 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 don't 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 folks in the Lincolnwood area.
