Retirement Planning – Mount Prospect, Illinois
For those in "Generation X" - described 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 you know what? With a lot of "baby boomers" either already in the middle of retirement or observing it on the horizon, "Generation X" stands out as the next generation of men and women to reach old age. Sure, it is still a ways off, but those in their 30s and 40s must start centering their investment planning on retirement and ensuring they have the kind of retirement they are working so hard to have. Here are some tips on planning for retirement:
Retirement life in the foreseeable future will be different than the retirement in the present day. It will be far 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, people 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 4 years more than the average life span in 1980. Therefore investment planning for retirement has to account for a longer period of time now than a generation or two ago.
Social Security and Retirement - Mount Prospect, Illinois
On the down side, Social Security will likely be a far less reliable source of income compared to now. And also the likelihood is 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 employer. Increasingly more, retirees will have to rely on their savings to pay for the costs of living and health insurance.
With individuals living longer and needing additional money to do so, retirement planning is a vital activity even for those people who are half way to the common retirement age of 65. It could be a daunting task to plan for a couple of decades into the future, particularly with bills, housing costs and mortgages to pay right now, but procrastinating won't make it any less complicated.
Placing even just a little bit of cash into a savings account that works 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 give you a place where you can pile up capital earning a little interest rate until there's enough to invest in a trusted 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. After maturation of the bond, you will get back your initial investment and also all the interest that 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 good foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA With Retirement - Mount Prospect, Illinois
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 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 each year.
For more information, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we will be happy to help you! We offer 401K and IRA rollover and review services for individuals in the Mount Prospect, Illinois area.
