The Law Vs. Investments

An IRA or 401(k) is like an empty piece of luggage that you take on your journey to retirement. In other works, an IRA or 401(k) is the law that covers your investments for retirement.


According to Nathalie Gorman in the article "What's in Your Retirement Account?",

"You must choose what to pack inside it—stocks, bonds, cash—or else the firm that handles your account will choose for you (if that ends up being a cash account, you'll miss out on the opportunity to earn bigger returns by putting at least a portion of that money in stocks)."

I agree with Nathalie, there is no "best" retirement investment.

Nathalie goes on to say, "What's right for you and for your closest friend can be wildly different, depending on a variety of factors: your age, whether you will have other retirement income sources (Social Security, a pension, an inheritance), your appetite for risk. If you invest through an employer-provided plan, look for educational material on the company Web site to help you choose the right mix. If you're investing on your own, consider consulting a trusted financial adviser. Overall, I recommend subtracting your age from 100 and putting that percentage in stocks (so if you're 30, that means 70 percent)."

If you are investing through your company plan, diversification is key.

"When you invest through a retirement plan at work, you're usually offered a menu of mutual funds, which provide a basket of investments in one shot. With your own IRA, you can also build a diversified portfolio by opting for low-cost exchange-traded funds (ETFs): Each fund holds dozens if not hundreds of investments." ,  according to Nathalie. I suggest buying discounted bonds. Over time diversify your bond portfolio and reinvest your interest and principal into more bonds. 

Now What Happens When I Retire?

  http://www.blogger.com/blogger.g?blogID=4951871798238945144#editor/target=post;postID=6871141336570686293

Josh Mellberg walks you through the pros and cons of annuities step-by-step. He shows one way of dealing with your retirement money once you retire. I do not expect the stock market to make large gains in the next 20 years. I expect bond yields to go up over time. This is why I suggest investing in High Yield Bonds (not bond funds, they are not the same). I do not endorse or debunk Josh Mellberg's strategies. My job is to make you aware of his insurance concepts and strategies.