This retirement investment could leave you loaded | personal finance

(Maurie Backman)

Some people set a goal of retiring with $1 million. Others could target $2 million or more.

The reality is that the amount of money you’ll need in retirement will depend on factors including your health and your desired lifestyle. If you’re plagued with medical issues, you’ll need a higher income to cover your various health care costs. And if you hope to travel the world and enjoy fine dining, you’ll need more money than someone who plans to spend their days cultivating a garden and exploring good books.

But either way, it’s worth building as solid a nest egg as possible for your later years to give yourself options and avoid financial stress. And to build a decent amount of wealth, you can’t leave your retirement savings in cash. Rather, you will need to invest that money wisely. And there is one specific investment that could be a solid bet.

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Invest in the broad market

There are different strategies you can adopt when it comes to investing for retirement. But if you want to take the easy way out, which, to be clear, wouldn’t be a bad thing, then you might want to put your long-term savings in broad-market index funds.

Index funds are passively managed and aim to match the performance of any benchmark they are tied to. A good bet for your retirement may be to charge S&P 500 index funds. That way, you’ll effectively be putting your money into the stock market as a whole, meaning you’ll benefit when it goes up and see your portfolio decline in value when it goes down.

But in total, throughout its history, the stock market has had more up years than down years. (If that wasn’t the case, fewer people would invest in it.) So putting your money into the broad market is a great way to maintain a diverse investment mix without having to do too much research or thinking.

Another benefit of buying broad market index funds? You won’t lose a lot of money from fees, which might be the case if you had to load actively managed mutual funds.

Prepare for success

Whether you have modest or high retirement plans, the right investment strategy could help you reach your goals. It’s worth thinking about 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 won’t allow you to beat the overall market, they will allow you to benefit from its performance. And that alone could set the stage for a millionaire retirement, especially if he starts funding an IRA or 401(k) from a young age and continues to do so steadily until his time in the workforce is over.

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