A Bumper Crop of Fantastic Retirement Funds

Retirees and those nearing the end of their careers must consider growth, income and safety for their investments. Here are 10 mutual funds and ETFs that keep those requirements in mind.

A picture of a successful crop of corn.
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Benjamin Franklin famously said that the only two certainties in life are death and taxes. In the 21st century, we can add a third: the need to save for retirement.

The traditional pension plan is all but extinct in the private sector and isn't as generous as it used to be in the public sector. And Social Security, while certainly a nice baseline of income, generally won't be enough to pay all your bills.

The average retirement lasts about 18 years, according to U.S. Census Bureau data. Consequently, any retirement funds need to focus not just on income but also growth.

"Our clients love income," says Rachel Klinger, president of McCann Wealth Strategies, a registered investment adviser headquartered in State College, Pennsylvania. "But if we don't give them growth as well, their accounts won't keep up with inflation. So we consider growth to be a critically important part of the plan."

That said, with stock valuations hitting levels last seen during the 1990s tech bubble, we need to be careful when selecting retirement funds. Suffering a bear market soon after you retire can deplete your portfolio and materially reduce your living standards for the rest of your life.

Brad Lamensdorf, CEO of money management firm ActiveAlts, says the stock market has "reached a point of over-expectation" as investors have come to expect returns far higher than historical norms. "We have been raising cash and adding hedges, as we expect more volatility in the coming months. You should protect yourself."

So along with growth and income, retirees and those nearing retirement also must consider safety, perhaps a little more than usual.

These 10 retirement funds were chosen with those concerns, as well as costs, in mind. All have reasonable, if not dirt-cheap, expense ratios. Each selection, spread across mutual funds and exchange-traded funds (ETFs) alike, can help round out a retirement plan and should be weighted according to your risk tolerance.

All returns are as of Sept. 2, 2021. Fund yields represent the trailing 12-month yield, which is a standard measure for equity funds, unless otherwise noted. ETFs do not have a minimum initial investment; you can buy as little as one share (or even fractional if your brokerage allows).

Charles Lewis Sizemore, CFA
Contributing Writer, Kiplinger.com

Charles Lewis Sizemore, CFA is the Chief Investment Officer of Sizemore Capital Management LLC, a registered investment advisor based in Dallas, Texas, where he specializes in dividend-focused portfolios and in building alternative allocations with minimal correlation to the stock market.