Let’s talk mutual funds, shall we? Mutual funds are a great investment for retirement planning because of their diversification. A mutual fund is essentially a lump sum of money and people investing in one thing—either stock in a company, Treasury bills, real estate, bonds, etc. As an investor in a mutual fund, you receive a share of any profit—or loss—that comes its way.

Professional fund managers run the funds and often are within a family of sorts that offers additional types of investments within that family. Some retirement planning tools like a 401(k) plan are exclusively with one family fund. You can choose different investment options within that family fund, but you can’t choose different families.

Additionally, mutual funds are already diversified and already managed by a professional. If you want to invest your money, but don’t know how or care to, it is one way to get the most bang for your buck.

According to cnn.money.com, the best types of mutual funds to invest in regards to retirement are a mix of stocks and bonds. You can choose both, or you can choose   balanced funds, life-cycle funds or target-date funds.

These funds are practically hassle-free options with little expertise required. For example, a target-date fund is based on the date you expect to retire. A balanced fund, according to investopedia.com is “a fund that combines a stock component, a bond component and, sometimes, a money market component, in a single portfolio. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation.”

Regardless, mutual funds are an option for those looking to start financial planning for retirement, but don’t know where to start. And of course, it is always best to consult an advisor and make sure your team is feeling mutual.


Source: Spicer Wealth


Respond and learn how financial products, including insurance and annuities can positively impact your retirement. This material has been provided by a licensed insurance professional for informational and educational purposes only and is not endorsed or affiliated with the Social Security Administration or any government agency.   It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.