Retirement Planning – Mchenry Fox River Grove
For the people in "Generation X" - defined as individuals born between the mid-1960s and also the early 1980s - retirement planning seems like something your parents or other "old people" would do. But you know what? With a lot of "baby boomers" either already in the middle of retirement or observing it in the near future, "Generation X" stands out as the next generation of people to reach old age. Sure, it is still a ways off, but those in their 30s and 40s need to start centering their investment planning on retirement and making certain they have the sort 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 in the present day. It will likely be 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 yesteryear.
On the bright side, folks 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 greater than the average life span in 1990 and more than four 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 Retirement - Mchenry Fox River Grove
On the down side, Social Security will probably be a far less reliable source of income than it is now. And the odds are 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 former workplace. Increasingly more, retired persons will need to depend on their savings to cover the expenses of living and health insurance.
With people 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 65. It could be an intimidating task to plan for a few decades into the future, particularly with bills, rents and mortgages to pay today, but procrastinating will not make it any easier.
Putting even just a little bit of cash into a savings account that functions as a retirement savings plan can pay off in the future. The interest you get 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 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 good approach which could certainly and progressively build a nest egg is to invest in long-term bonds. On maturation of the bond, you'll get back your initial investment and also all the interest that 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 nice foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.
401K and IRA With Retirement - Mchenry Fox River Grove
However, the best approach when it comes to retirement planning would be to put cash in a 401K plan at work 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 each year.
For more details, please do not hesitate 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 folks in the Mchenry Fox River Grove area.
