Retirement Planning – Medinah
For those in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning may sound like something your mother and father or other "old people" might do. But guess what? With many "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" is definitely the next generation of men and women to reach retirement. Sure, it is still a ways off, but people in their 30s and 40s must begin focusing their investment planning on retirement and making certain they have the kind of retirement they are working hard to enjoy. Below are great tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement right now. It'll be better in some ways, and worse in some ways. However, the retirement planning for today's workforce needs to be far different than it was in yesteryear.
On the bright side, people 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 four years more than the average life span in 1980. Therefore investment planning for retirement has to account for an extended period of time right now than a generation or two in the past.
Social Security and Retirement - Medinah
On the down side, Social Security is going to be a far less reliable income source 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 employer. Increasingly more, retired persons will need to rely on their financial savings to pay for the costs of living and health insurance.
With individuals living for a longer time and needing extra money to do so, retirement planning is a vital activity even for those people who are half way to the regular 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 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 in the future. The interest you receive on money in a savings account will allow your preliminary investments to grow to something sustainable. A savings account will provide a place where you can pile up capital earning a small interest rate until there is enough to invest in a reliable security that will yield you more like a municipal bond.
Another solid approach that can 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 along with all the interest which collected over the lifetime of the bond. That's a considerable amount of money for a 20- or 30-year bond-money that can provide a nice foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA With Retirement - Medinah
However, the best approach when it comes to retirement planning is to put funds in a 401K plan at your workplace or in an IRA opened with an investment house. For those 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 might 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 will be happy to help you! We provide 401K and IRA rollover and review services for folks in the Medinah area.
