If you have thought about retirement savings you know that there are many options available to you. You may have a 401K, an IRA or a 403b. You may want to have additional money set aside for retirement besides what you have in these accounts. The way you invest the money in these accounts may affect your rate of return, and how much money you have available to you when you retire.
Some banks will offer IRAs that are Certificates of Deposit (CDs). While others will allow you to choose what types of funds you put your money in. Your 401K plan should allow you to choose different types of mutual funds and stocks to put your funds into. When you first sign up for a 401K plan, you have the option of deciding the percentage that you put into each of these accounts.
It is important to diversify your retirement savings. You can do this by dividing the percentage that you have in mutual funds, stocks, and annuities. The amount of time you have before retirement also affects how you choose to invest your money. If you have at least ten years left before retirement then you can invest in more aggressive fund. If you are retiring in a shorter amount of time you will need to be more conservative in your investments.
Most people advise against having a large part of your investments in one particular stock. The reason is that if that stock were to sink drastically in value, then you will lose the greater portion of your retirement. An example of this is when Enron when went under and so many employees lost their retirement.
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