Many people find that choosing investments is one of the most difficult parts of planning for retirement.
A good place to start when it comes to choosing your investment options is to determine your investment style. Knowing your investment style may make it easier to choose your investment options, and the following quick tips can give you a better idea as to who you are as an investor:
Generally, investment options that have a higher risk also have the potential for higher returns. Whereas, lower risk investment options typically produce lower returns.
If you have a long time before you retire, you'll have more time to recover from potential market downturns and may want to be more aggressive with your investments. However, you may want to be more conservative if you're closer to retirement.
You should also think about the amount of time you want to spend managing your account and which investment options require more or less hands-on involvement.
You have a variety of investment options available to you, and you have the opportunity to choose what's right for you based on your investment style and unique situation.
With the insight you gain, you can make informed decisions about which funds – and which mix of funds – can put you on the path to meeting your retirement savings goals.
Still overwhelmed by the investment options…? …
Not to worry, in 2009 the State of Tennessee Deferred Compensation Program added the following two investment solutions to make your decision making process easier:
- Target Retirement Funds: Target Retirement Funds are a one-fund investing approach and can be a way to invest throughout your career and into retirement. A single Target Retirement Fund can serve as a complete, diversified retirement portfolio. Each Target Retirement Fund invests in several other funds to create a broadly diversified mix of stocks, bonds, and, in some cases, short-term reserves. The year in a Target Retirement Fund’s name is its target date, i.e., the year in which an investor in the fund is expected to retire and leave the workforce. Target Retirement Funds provide a self-adjusting investment mix whereby investment professionals manage each fund, gradually adjusting its investment mix to become more conservative as your target date approaches. For more information click on the link below.
- Reality Investing Advisory Services: The Reality Investing Advisory Services is an approach offered by Empower Retirement Services (Empower) to meet the unique needs of diverse participants. Advisory Services is based on a philosophy that individual participants typically fall into one of three common investor types. Click on the link below for an overview of the Advisory Services.
If you want to be very involved in every step of investment review, investment selection and account monitoring, then there are investment options available to create your own portfolio. To learn about these investment options and the other options described above, please review the information provided in the links below.