Retirement savings can be invested in a variety of assets including stocks, bonds, mutual funds, company stock, certificates of deposit (CDs), U.S. Treasury securities, dividend-paying stocks, treasury inflation-protected securities (TIPS), fixed annuities, stable value funds, exchange-traded funds (ETFs), and money market funds.
Common Asset Types for Retirement Savings
- Stocks and Bonds : Represent ownership and fixed income respectively, combining growth potential with income stability.
- Mutual Funds and ETFs : Pooled investment vehicles provide diversification across many assets to reduce risk.
- Company Stock : Sometimes offered in employer retirement plans, representing ownership in the employer company.
- Certificates of Deposit (CDs) : Low-risk, fixed interest-bearing deposits.
- Government Securities : Treasury bills, notes, bonds, and TIPS protect against inflation.
- Fixed Annuities : Insurance contracts guaranteeing income over time.
- Stable Value and Money Market Funds : Low-risk funds aimed at capital preservation and liquidity.
Investment Approach
Investors can choose target-date funds that automatically adjust asset allocation based on the expected retirement date or build a personalized portfolio suited to risk tolerance and time horizon. Diversification across these asset classes helps balance risk and return for retirement readiness.
