A Guide to Good Investments for Retirement

What Are Good Investments for Retirement? A Guide

Eric Bilitz | Jan 28, 2026

Building your retirement nest egg is a lot like constructing a championship sports team. You can’t just have star quarterbacks; you need a balanced roster of players who excel at offense, defense, and long-term strategy. Each investment in your portfolio plays a specific role, and finding the right combination is the key to reaching your financial goals. Many of our clients come to us asking, what are good investments for retirement, and the answer always starts with a plan. This article will introduce you to the key players on the field—from growth-driving stocks to stabilizing bonds—and explain how to assemble them into a winning team designed for your unique retirement vision.

Key Takeaways

Consistency is your greatest asset: The key to long-term growth isn't timing the market, but staying in it. Automate your savings, invest regularly regardless of market swings, and build a diversified portfolio to create a resilient financial future.
Your asset allocation should evolve with you: The right investment mix isn't static. Plan for a more growth-oriented portfolio when you're young and gradually shift toward capital preservation with more stable assets as you near retirement to protect what you've built.
A tax-efficient strategy protects your returns: Where you save is just as important as what you save. Use tax-advantaged accounts like 401(k)s and IRAs, and plan your withdrawal strategy to minimize your tax burden and keep more of your money.

Your Guide to Retirement Accounts

Choosing the right accounts for your retirement savings is just as important as choosing the right investments. Think of these accounts as different types of containers, each with its own set of rules and tax benefits. The right mix of accounts can help your money grow more efficiently and give you more flexibility when you finally decide to retire. Let’s walk through some of the most common options to see which ones might be a good fit for your financial plan.

Your 401(k) and That Free Money (aka Employer Match)

If your job offers a 401(k), it’s one of the easiest ways to start saving for retirement. But its best feature is the employer match. Many companies will match your contributions up to a certain percentage of your salary. This is essentially free money that goes directly into your retirement account, giving your savings an immediate return. At a minimum, you should always contribute enough to get the full match—otherwise, you’re leaving money on the table. These plans are a cornerstone of many retirement strategies, and understanding how to make the most of yours is a key part of our workplace education programs.

Traditional vs. Roth IRA: Which One Is for You?

Outside of work, an Individual Retirement Account (IRA) is a powerful tool. The main choice you’ll face is between a Traditional and a Roth IRA. With a Traditional IRA, you contribute pre-tax money, which can lower your taxable income today. Your investments grow tax-deferred, and you pay taxes when you withdraw the money in retirement. A Roth IRA is the reverse: you contribute after-tax money, so there’s no upfront tax break. However, your money grows completely tax-free, and you pay zero taxes on qualified withdrawals in retirement. Deciding which is best depends on whether you think you’ll be in a higher tax bracket now or later. This is a common topic we cover during the financial planning process.

Retirement Plans for the Self-Employed and Business Owners

When you’re self-employed or own a small business, you don’t have access to a company 401(k), but you have other excellent options. Plans like the SEP IRA, SIMPLE IRA, and Solo 401(k) are designed specifically for you. These accounts often allow you to contribute significantly more than you could to a traditional IRA, giving you a chance to supercharge your retirement savings. They offer flexibility and a range of investment choices, making them a great fit for entrepreneurs who want to take control of their future. We specialize in creating financial plans for business owners to help them find the right strategy for their unique situation.

The HSA: Your Secret Retirement Weapon

A Health Savings Account (HSA) is often overlooked, but it’s one of the most powerful retirement tools available. It offers a unique triple tax advantage: your contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are also tax-free. This makes it an incredible vehicle for covering healthcare costs in retirement. What’s more, after you turn 65, you can withdraw money from your HSA for any reason. You’ll pay income tax on non-medical withdrawals, just like a Traditional IRA, but there’s no penalty. This flexibility makes the HSA a fantastic, multi-purpose account to include in your long-term asset management strategy.

What Should You Invest in for Retirement?

Once you have your retirement accounts set up, the next big question is: what do you actually put inside them? Think of building your retirement portfolio like putting together a championship team. You don’t want a team of only star quarterbacks; you need a balanced mix of players who are great at offense, defense, and strategy. Each type of investment plays a different role, and finding the right combination is key to reaching your financial goals. Let's walk through some of the most common players on the retirement investing field.

Stocks: The Engine for Long-Term Growth

Stocks, or equities, represent a share of ownership in a company. When you buy a stock, you're essentially betting on that company's future success. For a retirement portfolio, stocks are your primary engine for long-term growth. While they come with more volatility than other investments, their potential for higher returns is what helps your money grow faster than inflation over the long haul. This is crucial, especially when you consider that your retirement could last for 20 or 30 years. Including a healthy allocation of individual securities in your strategy gives your nest egg the power it needs to grow significantly over time.

Bonds: Your Portfolio's Anchor for Stability

If stocks are your offense, bonds are your defense. When you buy a bond, you're lending money to a government or a corporation, and in return, they agree to pay you back with interest. Bonds act as a stabilizing force in your portfolio, helping to smooth out the ups and downs of the stock market. They typically provide a more predictable stream of income and are generally considered less risky than stocks. A diversified mix of bonds can provide a steady foundation, balancing the risks that come with stocks and helping to preserve your capital as you get closer to retirement.

Mutual Funds & ETFs: Don't Put All Your Eggs in One Basket

You’ve heard the saying, "Don't put all your eggs in one basket," and that’s exactly what mutual funds and Exchange-Traded Funds (ETFs) help you avoid. These are professionally managed collections of investments that can include hundreds or even thousands of stocks, bonds, and other assets. By investing in a single fund, you get instant diversification, which is a powerful way to spread out your risk. Instead of trying to pick individual winners, you can own a small piece of the entire market. This approach is a cornerstone of modern asset management and a smart way to build a resilient portfolio.

REITs: Investing in Real Estate Without the Hassle

Have you ever wanted to invest in real estate without the headache of being a landlord? Real Estate Investment Trusts (REITs) might be your answer. REITs are companies that own, operate, or finance income-producing properties like apartment buildings, office towers, or shopping centers. By investing in a REIT, you can add the benefits of real estate to your portfolio, including potential income from rent collection and property appreciation. They can be a great way to diversify your holdings beyond traditional stocks and bonds and add another potential income stream to your retirement plan.

Target-Date Funds: The "Set It and Forget It" Option

If you're looking for a simple, hands-off approach to retirement investing, target-date funds are designed for you. These are all-in-one funds that hold a mix of stocks and bonds, and their strategy is based on your expected retirement year. For example, if you plan to retire around 2050, you’d choose a "Target 2050" fund. The fund automatically adjusts its investment mix over time, becoming more conservative as you get closer to your retirement date. This "set it and forget it" approach is one of the most popular retirement investments for people who want a professionally managed portfolio without having to make constant adjustments themselves.

How Much Risk Should You Take?

Figuring out your investment risk tolerance is one of the most personal parts of building a retirement plan. There’s no single right answer—it’s about finding the balance that lets you grow your money without losing sleep. Your ideal risk level depends on a mix of practical factors, like your age, and emotional ones, like how you react when the market gets bumpy. Thinking through these elements will help you build a portfolio that feels right for you and aligns with your long-term vision.

Consider Your Age and Timeline

Your investment timeline—how long you have until you need to start using your retirement funds—is a huge factor in determining how much risk you can comfortably take on. Generally, the younger you are, the more aggressive your portfolio can be. You have decades to ride out market volatility and recover from any downturns. As you get closer to retirement, your focus often shifts from aggressive growth to capital preservation. You have less time to make up for potential losses, so a more conservative approach with lower-risk investments like bonds might make more sense.

Define Your Financial Goals

What does retirement look like for you? Do you plan to travel the world, or are you looking forward to quiet days at home? Your specific retirement goals directly influence your investment strategy. A more ambitious goal might require a strategy with higher potential returns, which usually comes with more risk. Clearly defining what you’re saving for helps you and your financial advisor build a tailored plan. This is a core part of the financial planning process, as it ensures your investment choices are actively working to bring your unique vision for the future to life.

How Well Do You Sleep During Market Swings?

This is the gut-check question. How do you feel when you see headlines about market volatility? If the thought of your portfolio value dropping in the short term makes you anxious, you likely have a lower tolerance for risk. On the other hand, if you see market dips as buying opportunities and can stomach the fluctuations for potential long-term gains, you might be comfortable with a more aggressive strategy. Being honest with yourself about your emotional comfort with risk is crucial. Your investment strategy should support your goals, not cause you constant stress.

Smart Strategies to Grow Your Retirement Nest Egg

Growing your retirement savings isn't about chasing hot stock tips or perfectly timing the market. It's about building smart, consistent habits that stand the test of time. These strategies are the foundation of a solid retirement plan, helping you build wealth steadily and confidently. By putting these principles into practice, you can take control of your financial future and work toward the retirement you've always envisioned.

Start Early to Let Compounding Work Its Magic

If there’s one piece of advice that stands the test of time, it’s this: start saving for retirement as early as you can. The reason is a powerful financial concept called compounding. Think of it as a snowball effect for your money. Your initial investments earn returns, and then those returns start earning their own returns. Starting your retirement savings early allows you to take full advantage of this magic. The sooner you begin, the more time your money has to grow on its own. You can use a financial calculator to see for yourself how even small, early contributions can blossom into a significant nest egg over several decades.

Invest Consistently with Dollar-Cost Averaging

The stock market has its ups and downs, and trying to predict its moves can be stressful and often counterproductive. A much calmer and more effective approach is dollar-cost averaging. This strategy involves investing a fixed amount of money at regular intervals—say, every paycheck—regardless of what the market is doing. When prices are low, your fixed amount buys more shares. When prices are high, it buys fewer. Over time, this can help smooth out the effects of market volatility and potentially lower the average cost of your investments. It’s a disciplined approach that removes emotion from the equation, which is a key part of our investment process.

Diversify Your Portfolio to Spread Out Risk

You’ve heard the old saying, "Don't put all your eggs in one basket." That’s the core idea behind diversification. Spreading your investments across various asset classes—like stocks, bonds, and real estate—is crucial for managing risk. If one part of your portfolio is having a tough time, another part might be performing well, helping to balance things out. Diversification is your key defense against the unpredictability of the market. By building a portfolio with a mix of different types of investments, you can reduce the impact of a poor performance in any single area. A well-thought-out asset management strategy ensures your portfolio is built to weather different economic conditions.

Automate Your Savings and Maximize Your Match

One of the simplest ways to ensure you’re consistently saving is to automate it. Set up automatic transfers from your checking account to your retirement accounts every payday. This "pay yourself first" method makes saving a priority, not an afterthought. If your employer offers a 401(k) with a matching contribution, make sure you’re contributing enough to get the full match. This is essentially free money that can significantly accelerate your savings. Many companies offer workplace education programs to help you understand these benefits. Not taking advantage of an employer match is like turning down a raise, so make it your top priority.

How to Create a Reliable Retirement Income

Once you’ve spent decades building your nest egg, the big question becomes: How do you turn it into a steady paycheck that lasts throughout retirement? The goal shifts from accumulation to distribution. You need a strategy to create a reliable income stream to cover your living expenses without running out of money. It’s about making your savings work for you so you can enjoy the life you’ve planned.

There are several ways to approach this, and the right mix often depends on your risk tolerance, financial needs, and overall goals. A solid financial planning process will help you determine which methods are the best fit for your situation. Let’s look at a few popular strategies for generating income in retirement.

Dividend Stocks: Get Paid to Own a Company

Imagine getting paid just for owning a piece of a successful company. That’s the basic idea behind dividend stocks. When you invest in these companies, they share a portion of their profits with you, their shareholders, in the form of regular payments called dividends. This can create a consistent income stream, often paid out quarterly.

Beyond the regular income, you also have the potential for your investment to grow if the stock price increases. This combination of income and growth can be a powerful tool in your retirement portfolio. Building a portfolio of individual securities that includes dividend-paying stocks can be an effective way to generate cash flow while helping your investments keep pace with inflation.

Annuities: Creating Your Own Pension

If the idea of a guaranteed paycheck for life sounds appealing, an annuity might be worth exploring. In simple terms, an annuity is a contract you make with an insurance company. You pay them a sum of money (either at once or over time), and in return, they promise to pay you a regular income for a set period or for the rest of your life.

This strategy can provide a predictable and stable foundation for your retirement income, no matter what the stock market is doing. It essentially allows you to create your own personal pension, giving you peace of mind that your essential expenses will be covered. Annuities come in many forms, so it’s important to understand the specifics before committing.

Bonds and Treasuries for a Predictable Income Stream

Bonds are another classic tool for generating retirement income. When you buy a bond, you’re essentially lending money to a government or a corporation. In exchange for that loan, they agree to pay you regular interest payments over a set term and then return your original investment at the end.

This makes bonds a reliable source of predictable income. A diversified portfolio of bonds can act as a stabilizing force, balancing out the volatility of the stock market. Because they tend to be lower-risk than stocks, they are a popular choice for retirees who are focused on preserving their capital while still generating a steady cash flow to cover their living expenses.

Create a "Paycheck" with a Withdrawal Strategy

Instead of relying solely on interest or dividends, you can create your own "paycheck" by systematically selling off a small portion of your investments each year. This is often called a total return or systematic withdrawal approach. A common guideline is to withdraw around 3% to 5% of your total portfolio value annually, adjusting for inflation.

This strategy allows the bulk of your portfolio to remain invested, giving it the opportunity to continue growing over the long term. This growth is crucial for helping your savings last and maintaining your purchasing power against inflation. Proper asset management is key to making this strategy work, ensuring your withdrawals are sustainable for the long haul.

How to Allocate Your Assets as You Age

The way you invest in your 30s shouldn't be the same way you invest in your 60s. As your life changes, so should your investment strategy. This is where asset allocation comes in—it’s how you divide your investments among categories like stocks, bonds, and cash. Getting this mix right is key to growing your money while managing risk, especially as you get closer to retirement. Let's look at how your allocation might evolve over time.

A Look at Asset Allocation by Age

As you age, your investment mix should be balanced. This means having a mix of stocks, bonds, and cash. The right mix depends on you and needs to fit how long you expect to be retired and how much risk you are comfortable with. When you're younger, you have decades to recover from market downturns, so a portfolio heavy on growth-oriented stocks often makes sense. As you get older, that balance will likely shift. There’s no one-size-fits-all answer, which is why understanding your unique timeline and comfort with risk is the first step in our financial planning process.

Shifting Your Strategy as Retirement Gets Closer

Younger investors can afford to take more risk by investing in a higher percentage of stocks. However, as you approach retirement, it’s crucial to shift your strategy towards capital preservation. This typically means increasing your allocation to more stable investments like bonds and cash. Think of it as moving from a 'growth' phase to a 'protection' phase. The goal is no longer just about growing your nest egg as fast as possible; it's about safeguarding what you've built so it can provide a reliable income. This strategic shift is a core part of creating a solid financial plan for your future.

Why You Need to Rebalance Your Portfolio

Once you've set your target asset allocation, you can't just forget about it. Market performance will naturally cause your mix to drift. If stocks have a great year, they might make up a larger percentage of your portfolio than you intended, exposing you to more risk. Rebalancing your portfolio is essential. Periodically adjusting your investments back to your target allocation helps ensure your portfolio remains aligned with your goals. This simple check-in, whether quarterly or annually, is a key part of disciplined asset management and keeps your financial plan on track.

Common Retirement Investing Mistakes to Avoid

Building a solid retirement portfolio is about more than just picking the right investments; it's also about sidestepping the common mistakes that can derail your progress. Even the most seasoned investors can fall into these traps if they aren't careful. By being aware of these potential pitfalls, you can protect your hard-earned money and stay on the right path toward your financial goals. Let's walk through some of the most frequent missteps and how you can avoid them.

Don't Let Your Emotions Drive Your Decisions

The stock market can feel like a rollercoaster, and it’s completely normal to feel a jolt of fear during a dip or a rush of excitement during a rally. But letting these emotions steer your investment choices is one of the biggest mistakes you can make. Reacting to market news by panic-selling or chasing hot stocks often leads to buying high and selling low. The key is to create a sound investment strategy based on your long-term goals and stick with it. Having a plan acts as your anchor in stormy seas, helping you tune out the noise and focus on what truly matters: your financial future.

Watch Out for High Fees That Eat Your Returns

Investment fees might seem insignificant, often appearing as just a small percentage. However, over decades of saving, these tiny amounts can add up to a staggering sum, quietly eating away at your returns. Think of it like a slow leak—you might not notice it at first, but it can cause serious damage over time. It's crucial to understand the fees associated with your 401(k), IRAs, and other investment accounts. Always look at the expense ratios for mutual funds and ETFs and be clear on any advisory fees. You can use tools like FINRA's Fund Analyzer to compare costs and see how they impact your long-term growth. A little diligence here can save you thousands.

Avoid the Pitfall of Starting Too Late

When it comes to retirement investing, time is your greatest ally. Thanks to the power of compounding, the money you invest early on has the potential to grow exponentially over the years. Starting in your 20s or 30s gives your investments decades to work for you. But if you're getting a later start, don't be discouraged. The best time to plant a tree was 20 years ago, but the second-best time is today. The most important step is to begin now, contributing as much as you can consistently. You can use a retirement calculator to see how even small, regular contributions can grow into a substantial nest egg over time. It’s never too late to take control.

The Danger of Not Diversifying

You’ve heard the old saying, "Don't put all your eggs in one basket," and it’s the golden rule of investing. Failing to diversify your portfolio exposes you to unnecessary risk. If all your money is tied up in one company's stock or a single industry, a downturn in that specific area could be devastating to your savings. Diversification means spreading your investments across various asset classes like stocks, bonds, and real estate. This helps smooth out the ride because when one asset class is down, another may be up. A well-diversified portfolio is built to weather market volatility and is tailored to your personal risk tolerance. It’s a foundational strategy for long-term success.

How to Make Your Retirement Investments Tax-Efficient

Saving for retirement is one thing, but keeping as much of your hard-earned money as possible is another. A smart tax strategy can make a huge difference in how long your nest egg lasts. It’s not just about what you invest in, but where you hold those investments. By understanding the tax implications of your accounts and planning your withdrawals carefully, you can significantly reduce the amount you owe to Uncle Sam, leaving more for you to enjoy in your golden years.

Tax-Deferred vs. Tax-Free: Know the Difference

The first step is understanding the two main types of retirement accounts. Tax-deferred accounts, like traditional IRAs and 401(k)s, let you contribute pre-tax dollars. This means you won’t pay taxes on your contributions or their earnings until you withdraw the money in retirement, which can lower your taxable income today. On the other hand, Roth IRAs and Roth 401(k)s are funded with after-tax dollars. You pay the taxes upfront, but your qualified withdrawals in retirement are completely tax-free. Deciding between them often comes down to whether you think you’ll be in a higher tax bracket now or later. A comprehensive financial plan can help you figure out which approach best suits your long-term goals.

Plan Your Withdrawals to Minimize Your Tax Bill

Once you retire, the order in which you tap your accounts matters. When you start planning your withdrawals, think about the tax implications of each account type. Withdrawals from your tax-deferred accounts are taxed as ordinary income, while qualified withdrawals from Roth accounts are tax-free. By strategically pulling from different accounts, you can better manage your tax bracket each year. For example, a common strategy is to withdraw from taxable brokerage accounts first, then tax-deferred accounts, and finally, your tax-free Roth accounts. This allows your tax-advantaged money to continue growing. However, every situation is unique, and the right withdrawal strategy is a key part of our process for building a sustainable retirement income.

Is a Roth Conversion Right for You?

A Roth conversion is a strategy that involves moving funds from a traditional IRA or 401(k) to a Roth IRA. When you do this, you have to pay income tax on the amount you convert in the year you do it. So, why would anyone do this? It can be a smart move if you expect to be in a higher tax bracket in retirement. By paying the taxes now, you allow those funds to grow and be withdrawn completely tax-free later on. This can also be a good strategy during a low-income year. The decision to do a Roth conversion is complex, so it’s a good idea to book a meeting to discuss if it’s the right choice for your financial picture.

Frequently Asked Questions

I have a 401(k) at work. Do I still need an IRA? That’s a great question. Your 401(k) is a fantastic tool, especially for capturing that employer match. Think of an IRA as a way to expand your options. While your 401(k) offers a limited menu of investments, an IRA opens the door to a much wider universe of stocks, bonds, and funds. This gives you more control to build a portfolio that’s tailored to you. It’s also a great way to access a Roth account for tax-free growth in retirement if your employer doesn’t offer a Roth 401(k).

How do I know if I'm taking on too much risk? The best way to gauge this is the "sleep-at-night" test. If you find yourself constantly worrying every time the market has a bad day or feeling an impulse to sell everything, your portfolio might be too aggressive for your comfort level. A solid investment strategy should align with your long-term goals without causing you constant stress. It’s about finding that sweet spot where you can grow your money confidently, knowing your plan is built to handle the market’s natural ups and downs.

I feel like I'm behind on my retirement savings. Is it too late for me? It is absolutely never too late to take control of your financial future. While starting early is ideal, the most important step you can take is to start right now. Focus on what you can control today: create a clear plan, automate your savings, and contribute as much as you can consistently. If you are over 50, you can also make "catch-up" contributions to your IRA and 401(k), which allows you to save even more. A focused strategy can make a tremendous difference, regardless of when you begin.

What’s the real difference between a mutual fund and an ETF? Both are excellent tools for instant diversification, so you’re on the right track either way. The main practical difference is how they trade. You can buy and sell ETFs throughout the day just like a stock, and their prices change constantly. Mutual funds, on the other hand, are priced just once per day after the market closes. ETFs also tend to have slightly lower fees and can be more tax-efficient, but the best choice really depends on your specific investment strategy.

Should I just put all my money into a target-date fund and forget about it? Target-date funds are a wonderfully simple and effective option for many investors. They automatically adjust your investment mix to become more conservative as you get closer to retirement, which takes a lot of the guesswork out of the equation. However, this "one-size-fits-all" approach is based only on your age. It doesn't account for your unique financial goals, other investments you might have, or your personal comfort with risk. While it's a great starting point, a more personalized asset allocation may serve you better as your financial life grows more complex.