Retirement Savings Options: What Are They?
Are you asking yourself, "retirement savings options: what are they?" There is so much information regarding retirement savings options that it can be somewhat overwhelming. Here we will look at some retirement saving options for your retirement.
- Mutual Funds. Mutual funds invest in sectors of the market rather than a particular company. The diversification regarding mutual funds makes this one of the best retirement savings options available. Choose an index fund concentrated in the entire US stock market and another index fund with an international focus, and you’ll be off to a get start. Index funds have the lowest expense ratios because they don’t have a money manager. Always seek a discount broker and never buy loaded funds. Loaded funds have either a front end or back end commission, index funds offer no commission and usually outperform managed funds. So save your money and buy index funds. Index funds will always have the word index in the fund’s title.
- Bonds. Bonds like mutual funds vary as well. Municipal bonds are ideal for the investors in high income brackets. Municipal bonds offer the investor tax free interest payments for a specific term, while zero coupon bonds offer no interest payments, but a significant discount off the face of the bond. Here the investor obtains the amount of the face value of the bond upon maturity.
- Fixed Annuities. Fixed annuities are investments made by insurance companies that offered a guaranteed minimum interest rate, with the highest interest rates found in the first two years. These investments are popular among seniors because of the conservative nature of the investments. The interest rates offered are slightly higher than the current market rate of your typical CD. This investment offers a term of either five or seven years and provides steady income usually in a monthly fashion. There are steep surrender charges, so make sure you finish your term. Fixed Annuities also guarantee the principal, so you won’t lose money.
Retirement savings require discipline and forward thinking. Make your future secure and start saving today.