Retirement Investment Options

When it comes to retirement investment options, there are a variety of different routes to choose. Because people have different needs and financial goals, it is wise to meet with a financial advisor who can help you figure out the best types of retirement investments for you. There are all kinds of investments that carry different levels of risk. In some cases, an investor may want to stick with low risk choices, in other cases diversification of investments which span different risk levels may be preferred.

If you are someone who is looking for a low-risk investment, treasury bills, also known as T-bills, are a good choice. These are short term investments which are backed by the United States government. Your financial manager can use the profit earned from T-bills to reinvest. Another low risk investment type is a municipal bond. Like a treasury bill, these bonds are backed by the government. Because the investor is basically lending their money, they get it back with interest. The interest may be lower than other types of investments but so is the risk factor. These bonds are long term as compared with treasury bills.

Other low-risk retirement investment options are certificates of deposit, abbreviated CDs. These certificates are insured up to $100,000 by the FDIC or NCUA depending on whether they are bought at a bank or a credit union. Because of this insurance there is basically zero risk when purchasing a CD. Certificates of deposit are long term, and can be held for several years. Upon maturity the investor gets the amount they deposited back with interest that exceeds the average savings or checking account.

Or, an investor may want to look into buying an annuity. This involves giving money to a company which they will invest. In many cases, this would be an insurance company of some sort. At a set point in the future, the investor gets regular payments which often continue for many years or even a lifetime. Now that low-risk investments have been covered, let’s take a look at some of the higher risk investments out there.

Investing in the stock market carries a substantial amount of risk. Of course it does depend on the stock or stocks you are buying, whether you are looking for short or long term investments, and various other factors. A stock makes you part owner of the company. The issues with stocks are that they can go up and down depending on the company’s performance. There are no guarantees when it comes to the stock market, and anyone looking at stocks as a retirement investment should offset the risk with other types of investments like those mentioned above.

If you do want to invest in stocks, use the services of an experienced broker who can advise you. Also, consider investing in mutual funds as well. Mutual funds are portfolios that have many stocks in them and sometimes other types of investments. These are managed by a mutual fund manager, and rather than buying a portion of a company an investor is buying a portion of different investments. This is a lower risk option than playing the stock market and is used for 401K retirement plans.

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