Retirement Planning – Minooka
For those in "Generation X" - defined as individuals born between the mid-1960s and the early 1980s - retirement planning may sound like something your mother and father or other "old people" would do. But guess what? With a lot of "baby boomers" either already in the middle of retirement or viewing it in the near future, "Generation X" is the next generation of men and women to reach old age. Sure, it's still a ways off, but those in their 30s and 40s will need to start focusing their investment planning on retirement and making sure they've got the type of retirement they are working hard to have. Here are some tips on preparing for retirement:
Retirement life in the 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 workforce needs to be far different than it was in days gone by.
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 more 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 back.
Social Security and Retiring - Minooka
On the down side, Social Security is going to be a far less trustworthy income source than it is now. And also the likelihood is slim-and getting slimmer each 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, retirees will need to depend on their financial savings to pay for the expenses of living and medical health insurance.
With folks living for a longer time and needing additional 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 an intimidating task to plan for a couple of decades into the future, particularly with bills, housing costs and mortgages to pay right now, but procrastinating will not make it any less complicated.
Placing even just a small amount of cash into a savings account which serves as a retirement savings plan can pay off later. 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 which will yield you more like a municipal bond.
Another good approach that can certainly and steadily build a nest egg is to invest in long-term bonds. On maturation of the bond, you will get back your initial investment along with 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 that can 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 With Retirement - Minooka
Nonetheless, 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 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 each year.
For more info, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we'll be happy to help you! We offer 401K and IRA rollover and review services for folks in the Minooka area.
