Types of Retirement Investments
Choosing the right type of investments that will yield the best returns to build a solid retirement portfolio can be intimidating. There are different types of retirement accounts (pensions, IRAs, 401k plans and annuities) available with a variety of investment options that can be purchased within all of them. Finding the right mix based on a persons needs and objectives is essential for a secure retirement plan.
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FDIC Insured Accounts
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These include savings accounts, time certificates and money market accounts that offer low rates of return but are insured. These are ideal for people close to or already in retirement seeking to preserve capital and keep it liquid.
Equities
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Equities are stocks purchased that give the shareholder ownership in a company generally for long-term investments. These fluctuate in value based on the strength of the company and offer no guarantee.
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Debentures
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Debentures are bonds that yield higher returns than bank accounts with a fixed return if the bond owner keeps the bond for the entire term. Bonds are not guaranteed with its safety determined by the financial strength of the company or government agency issuing it.
Mutual Funds
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Mutual funds pool money from many investors to purchase stocks and bonds as a larger financial force. They fluctuate in principal, are considered long-term investments for growth and have no guarantee on principal.
Real Estate
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Real estate is rarely considered a common retirement investment, but certain IRAs are capable of placing real estate into the account. This must not be the IRA holders primary residence and must follow specific IRS guidelines to be in compliance.
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