Retirement Planning – Winnetka, Illinois
For those in "Generation X" - defined as people born between the mid-1960s and the early 1980s - retirement planning sounds like something your mother and father or other "old people" would do. But you know what? With lots of "baby boomers" either already in the midst of retirement or viewing it in the near future, "Generation X" will be the next generation of people to reach old age. Sure, it's still a ways off, but people in their 30s and 40s must start focusing their investment planning on retirement and making certain they've got the kind of retirement they are working so hard to have. Here are some tips on preparing for retirement:
Retirement life in the foreseeable future will be different than the retirement of today. It'll be far better in some ways, and worse somewhat. But, the retirement planning for today's workforce must be far different than it was in earlier times.
On the bright side, folks are living longer than ever. As of a short while 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 4 years more than the average life span in 1980. So investment planning for retirement has to account for a longer period of time now than a generation or two in the past.
Social Security and Retiring - Winnetka, Illinois
On the down side, Social Security will probably be a far less trustworthy source of income than it is now. And 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 previous employer. Increasingly more, retired persons will have to rely on their savings to cover the expenses of just living and medical health insurance.
With people living for a longer time and needing extra money to do so, retirement planning is an essential activity even for those who are halfway to the common retirement age of 65. It may be an intimidating task to plan for a few decades into the future, particularly with bills, housing costs and mortgages to pay right now, but procrastinating won't make it any less difficult.
Placing even just a small amount of money now into a savings account that works as a retirement savings plan can pay off later. 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 accumulate 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 solid strategy that could certainly and steadily build a nest egg is to put money into long-term bonds. After maturation of the bond, you'll get back your initial investment as well as all the interest that collected over the lifetime of the bond. That's a significant amount of money for a 20- or 30-year bond-money that could provide a nice foundation for retirement. And a municipal or government bond is as safe an investment that you can ever make.
401K and IRA - Winnetka, Illinois
Nevertheless, the best approach when it comes to retirement planning would be to put money in a 401K plan at work 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 put into this account is tax deferred and might be tax-deductible, depending on how much is invested each year.
For more details, please do not 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 individuals in the Winnetka, Illinois area.
