YOUR RETIREMENT
PLAN, SAVE & MAKE YOUR MONEY LAST
PRINT
EMAIL
DEL.ICIO.US
DIGG THIS- Stock Watch - REITs That Are Holding up Well
- Fund Watch - Why This Kiplinger 25 Fund Has Tumbled
- Starting Out - Find $1,000 by the Holidays
- Value Added - As Goes the White House, So Goes the Market?
- Cash in Hand - An Unbelievable Yield
- Money Smart Kids - How to Safeguard College Savings Now
- Drive Time - It's All About MPG
- On the Job - A Career Survival Kit
- Tax Tips - Need More Time?
- More
Any thoughts on how to invest my IRA and 401(k) money? I'm sure there are some basic principals of what sorts of investments are particularly suited, but I can't seem to find help on this score. Any ideas would be most welcome.
The key is to match your investments with your time horizon. If you have at least six years until retirement, or ten or more years for another goal (college savings for your preschool children, for example), then you'll want to invest all of your money in stocks or stock funds.
Stock funds should perform better than other investments over the long haul, and you'll have time to weather the market's ups and downs. And diversifying your portfolio among different types of stock funds helps make it less volatile. See Kiplinger's Long-Term Portfolio for some of our favorite funds for the long run. That portfolio includes one fund that specializes in stocks of small companies, two in stocks of large U.S. firms and another in stocks of foreign firms.
Because of the funds' minimum investment requirements, you'd need to have at least $25,000 to duplicate this portfolio in a regular account, or $10,000 in a retirement account. If you don't have that much to invest now, start with T. Rowe Price Growth Stock PRGFX), then gradually add Dodge & Cox International (DODFX), Masters' Select Smaller Companies )MSSFX), Oakmark Select (OAKLX) then Legg Mason Opportunity (LMOPX) as you get more money.
If you have a shorter investing time frame, check out our medium-term portfolio -- if you're within five years of retirement or six to nine years from needing the money for another goal -- or our short-term portfolio if you need the money before then. These portfolios gradually shift from stock funds to more conservative investments as your savings goal gets closer. When you're three years away from your goal, start to sell your stock funds then your long-term bond funds from the short-term portfolio.
If your 401(k) doesn't offer these fund choices, click on the "fund style" link to find out more about the record of other funds that invest in similar types of stocks. Or consider another option that is becoming more common in 401(k)s: target funds, which are ready-made portfolios of funds that match your timeframe and gradually become more conservative through time. See Funds that Grow With You for more information about how these funds work and how to make the most of them.
For more information about our favorite funds for various savings goals, see The 25 Best Mutual Funds. See Growing a Fund Portfolio to learn more about assembling a portfolio of funds for your savings timeframe.
Reprint Article
|
|
|
|
|
