Retirement Planning – River Forest
For the people in "Generation X" - defined as folks born between the mid-1960s and also the early 1980s - retirement planning may sound like something your mother and father or other "old people" might do. But you know what? With a lot of "baby boomers" either already in the middle of retirement or looking at it in the near future, "Generation X" is definitely the next generation of people to reach old age. Sure, it's still a ways off, but people in their 30s and 40s will need to begin 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 much better in some ways, and worse somewhat. 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 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 time of time right now than a generation or two ago.
Social Security and Retirement - River Forest
On the downside, Social Security is going to 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 right now will be able to rely on a work pension and enjoy lifetime benefits from their previous employer. Increasingly more, retired people will need to rely on their savings to cover the expenses of just living and health insurance.
With individuals living for a longer time and needing extra money to do so, retirement planning is an essential activity even for those who are half way to the regular retirement age of 65. It can be an intimidating task to plan for a couple of decades into the future, particularly with bills, rents and mortgages to pay today, but procrastinating will not make it any easier.
Placing even just a little bit of cash into a savings account that works as a retirement savings plan can pay off later on. The interest you receive on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will give you a place where you can acquire 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 strategy that may surely 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 that collected over the life of the bond. That's a tremendous amount of money for a 20- or 30-year bond-money that may provide a great foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.
401K and IRA - River Forest
Nevertheless, 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 people for whom a 401K is not a retirement planning option, an IRA is the next best thing. Money put 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'll be glad to help you! We offer 401K and IRA rollover and review services for folks in the River Forest area.
