5 Best Investments For Retirement

The 5 best investments for retirement will teach you about the kinds of investments that you need to ensure a comfortable retirement, which should see you taking it easy and not struggling to make ends meet. After a hard, long life of working and working and working...you should have something to fall back on in your old age. So read our list of the best investments to make sure you are all set for when 65 rolls around.

1. Stocks. Though they can be volatile and subject you to dramatic swings, financial experts still agree: The best way to get great long-term results and build a nest egg to get you through retirement is through investing in stocks. Just be sure to guard yourself against volatility and big losses by diversifying (investing in different stock sectors) your portfolio!
2. Bonds. The perfect investment for those of you who cannot take the steep ups and downs of a stock market, bonds fit nicely into our 5 Best Investments For Retirement list. Do not expect the same return potential with bonds as with stocks since the purpose of exposing yourself to bonds is more of a defensive play. However, if you balance your stock to bond ratio correctly, you should still get the long-term benefits of holding stocks while protecting yourself from sudden downturns.
3. 401(k). The 401(k) is based on the principle that the more you contribute to it, the more money you are actually getting! It would be insanity to neglect a retirement vehicle as beneficial as the 401(k). You get the possibility of matching contributions from your employer; you avoid taxes on capital gains, dividends and other distributions; and you get an immediate tax break, which lowers your taxable income. For all these reasons alone, you should look into this type of investment.
4. Traditional IRA. An traditional IRA comes in one of two versions: deductible or non-deductible. A deductible, traditional IRA permits you to deduct all or part of your contributions from your taxable income. With a non-deductible IRA, you won't have the deductibility benfit, but you will still gain an advantage due to your savings appreciating in a tax-deferred way.
5. Roth IRA. The main argument in favor of a Roth IRA is that you are granted the advantage of tax-free growth; you do not owe any taxes when you make withdrawals in retirement! Just think of how much that alone will save you.

Reference:

Money 101