This Retirement Investment Might Leave You Bored | personal financing

(Morri Bachmann)

Some people set a retirement goal of $1 million. Others may aim for $2 million or more.

The truth is that the amount of money you ultimately need in retirement will depend on factors including your health and desired lifestyle. If you have medical problems, you will need a higher income to cover various healthcare costs. And if you want to travel the world and enjoy your share of fine dining, you’ll need more money than anyone who plans to spend their days gardening and exploring good books.

But either way, it pays to build a nest egg as strong as possible for your early years to give yourself options and avoid financial stress. And to amass a fair amount of wealth, you can’t leave your retirement savings in cash. Instead, you will need to invest that money smartly. A specific investment can be a solid bet.

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Invest in the wide market

There are different strategies you can adopt when it comes to investing for retirement. But if you want to take the easy route – which wouldn’t be a bad thing at all – to be clear – you might want to put your long-term savings into broad-based market index funds.

Index funds are passively managed and have the objective of matching the performance of any benchmark associated with it. A good bet for retirement might be the download Standard & Poor’s 500 index funds. This way, you’ll be effectively putting your money into the stock market in general, which means you’ll benefit when it goes up and see the value of your portfolio go down when it goes down.

But all together, throughout its history, the stock market has had more ups than down years. (If not, fewer people will invest in it.) So putting your money in the broad market is a great way to maintain a diversified investment mix without having to do a lot of research or thought.

Another benefit of buying broad-market index funds? You won’t lose a lot of money on fees, and that might be the case if you’re going to be carrying actively managed joint funds.

Prepare yourself for success

Whether you have modest retirement plans or lofty plans, the right investment strategy can help you achieve your goals. It’s a good idea to consider investing your long-term savings in broad market index funds.

And if you’re not convinced, it might help to know that Warren Buffett, one of the most successful investors of our time, believes that broad market index funds are a great bet for the average saver. Although index funds will not allow you to beat the broad market, they will allow you to benefit from their performance. And that alone can pave the way for millionaire retirement, especially if you start funding an IRA or 401(k) plan from a young age and continue to do so consistently until your time in the workforce is over.

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