Mutual funds offer the individual investor a hands-off approach to investing. When investing in mutual funds, investors don’t directly own the stocks or bonds, but rather share equally in the profits or losses of the fund’s total holdings, thus the “mutual” in “mutual funds".
There are limits to how much an individual can contributed to IRAs and employer-offered 401(k) retirement plans. As one of the biggest retirement risks is outliving your savings, fixed income annuities may help to avoid that pitfall, allowing you to plan for a lifestyle you’ve worked hard to achieve.
While an employer-sponsored 401(k) plan or an individual retirement account (IRA) may encourage people to save for retirement, there are limits to how much you can contribute yearly to those plans. If you believe that won’t be enough for your retirement, consider another alternative – variable annuities.
Defining your goals, measuring your risk tolerance and determining your investment time horizon all play an important part in choosing an investment strategy best suited for you. As you go through life, you’ll find that your short- and long-term goals are always changing or being modified to reflect your life stages.