Retirement Planning – Niles
For anyone in "Generation X" - described as people born between the mid-1960s and also the early 1980s - retirement planning seems like something your parents or other "old people" would do. But guess what? With a lot of "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" is definitely the next generation of people to reach old age. Sure, it's still a ways off, but those in their 30s and 40s have to start centering their investment planning on retirement and making sure they've got 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 of today. It will likely be better in some ways, and worse in some ways. But, 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 4 years more than the average life span in 1980. Therefore investment planning for retirement has to account for a longer time of time now than a generation or two in the past.
Social Security and Retirement - Niles
On the downside, Social Security will probably be a far less reliable income source compared to now. And the likelihood is slim-and getting slimmer each year-that retirees 20 and 30 years from now will be able to rely on a work pension and enjoy lifetime benefits from their previous workplace. Increasingly more, retired persons will have to depend on their savings to cover the costs of living and health insurance.
With people living longer and needing more cash 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 could be a daunting task to plan for a few decades into the future, particularly with bills, housing costs and home loans to pay right now, but procrastinating won't make it any less complicated.
Placing even just a small amount of cash into a savings account that 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 build up capital earning a small interest rate until there is enough to invest in a trusted security that will yield you more like a municipal bond.
Another good strategy that may surely and progressively build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you'll get back your initial investment along with all the interest that collected over the life of the bond. This is a considerable amount of money for a 20- or 30-year bond-money that may 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 - Niles
Nonetheless, the best approach when it comes to retirement planning is to put money in a 401K plan at your workplace 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 annually.
For more details, please don't hesitate to contact GC Financial Advisors Ltd. at any time and we will be glad to help you! We provide 401K and IRA rollover and review services for folks in the Niles area.
