5 Types of Investments Americans Use to Save for Retirement

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We all want a big nest egg. How we get one differs from person to person.

Where do you invest your retirement money? Some of us are comfortable taking our chances on high-flying stocks. Others prefer to stay anchored in the security of bonds and money.

Recently, investment management firm BlackRock asked nearly 3,000 savers and retirees to describe the types of investments they use to save for retirement. Here are the places where today’s savers are making their money grow.

AND F

ETFs
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Respondents who use this type of investment for their retirement savings: 16%

The first American ETF (exchange-traded fund) was launched in 1993, and in recent years this type of investment has become increasingly popular.

Not everyone likes ETFs: John Bogle, the legendary founder of Vanguard, rejected them.

But unlike mutual funds – which trade at one price after the market closes each day – ETFs trade at different prices throughout the day. They also tend to have lower costs than many mutual funds.

Not sure if ETFs are right for you? Check out Money Talks News Founder Stacy Johnson’s take on “Should I Invest With ETFs?”

Annuities

Annuity
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Respondents who use this type of investment for their retirement savings: 21%

Some experts believe that annuities are underrated and should be a bigger part of retirement planning. In fact, under the Obama administration, government officials lobbied to marry off more retirees to this largely unloved option.

Does an annuity belong to your nest egg? Stacy donates her 2 cents in “Should You Buy an Annuity?” ” The pros and cons.”

Cash

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Respondents who use this type of investment for their retirement savings: 46%

The old adage “cash is king” rings true with nearly half of Americans keeping at least some of their retirement savings in dollars. Unlike stocks, cash doesn’t end up going from soaring highs to plummeting lows.

But that doesn’t mean that cash is a totally safe way to store your money. Inflation can erode the value of cash over time.

And if you do something stupid, your money could disappear even faster, as we explain in “6 Reasons Why You Should Stop Hiding Money at Home.”

Individual titles

buy company shares
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Respondents who use this type of investment for their retirement savings: 47%

Individual securities include stocks, bonds and options. They offer less diversification than investing in most mutual funds or ETFs. This means that your potential for big wins or big losses can be magnified.

If you want to try your hand at picking individual stocks, be sure to check out Stacy’s ideas in “How to Pick Winning Stocks, Step by Step.”

Mutual fund

Mutual fund
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Respondents who use this type of investment for their retirement savings: 49%

Millions of Americans trust mutual funds to do the job of building a big nest egg, and with good reason.

These funds offer high levels of diversification. You can choose index funds that include stocks from hundreds or even thousands of companies. As Stacy said:

“A mutual fund, for those of you who don’t know, is simply a portfolio of stocks or other securities divided into small portions. So instead of owning a single stock, you own a whole bunch of different stocks. It’s much less risky. »

Other

House for rent
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Respondents who use this type of investment for their retirement savings: 27%

There are many ways to save for retirement that go beyond buying stocks or putting cash into a bank account.

Some people choose to fund their retirement with investments in rental properties. Others buy cryptocurrency hoping to get rich. Entrepreneurs can base their retirement hopes on the investment they make in their small business.

More than a quarter of American savers put at least a portion of their retirement savings in a previously unlisted investment.

How to save for retirement?

Happy and relaxed retired seniors
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While it’s fun to see how others are saving for retirement, you shouldn’t necessarily follow the crowd. The best retirement plan is one that suits your wants and needs.

Money Talks News has many articles on different aspects of retirement savings. Start with “7 tips for retiring with a million dollar nest egg.”

Then check out articles such as:

Once you understand the basics, consider raising your knowledge to expert level by enrolling in the Money Talks News course. money made simple.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click on links in our stories.

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