Investing for retirement: ‘It doesn't have to just be stocks,’ expert says

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Experts suggest people start developing a balanced portfolio, which requires one to assess their risk tolerance and time frame and choose a mix of investments that reflect that. Expert's key piece of advice for those investing for retirement:

That includes assessing your risk tolerance and time horizon and diversifying your portfolio with stocks, less volatile investments like bonds or total stock market index funds — mutual funds that track the total returns of the entire US market — and perhaps a dash of alternatives.

You might also consider making some new retirement plan contributions into an alternative investment, like a real estate investment trust or a mutual fund that buys them. Commodities might be a good place for an inflation hedge, he added. "Real estate is another good option."Owning stock is essential for those who have a long-term horizon, say, two decades, until they plan to start dipping into their savings.

"If you're not somebody who wants to be that owner-operator, you could look at real estate investment trusts, where you're going to own a piece of a portfolio and perhaps get an income stream," Sprung said. "There's really a flavor for everyone, it's just a matter of finding what's right for you in terms of what your goals are, your risk profile, and what your time horizon is.

Social Security has always been a major income stream that retirees rely on. But Social Security’s reserves are projected to run out in 2033 if Congress doesn’t act. At that point, Social Security will only cover 77% of full benefits., which raises the question of whether millennials and Gen Zers should expect to lean on Social Security as income in retirement.

 

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