Everyone dreams of the day when they can retire and just kick back and relax.

Many  worry they might not be preparing for it enough. True, it can be a difficult transition, but some savvy income-focused investing early on can make the ride go a whole lot more smoothly.

Here are just some of your options for feeling more prepared at any age:

IRAs, 401 (k)s and target-date funds

Early on, you’ll want to maximize your contributions to your 401(k) and your IRAs (whether traditional or Roth). You will also want to consider (or ask your financial advisor to focus on) growth-oriented investments, building your capital as you go.

If you’re managing your own investments, you should look into target-date funds – long-term investments with a specific retirement date in mind.

Target-date funds are simple, will make sure your money is diversified and invested to grow toward your goal. But, they can be harder to change and control if something happens in your life that changes your investment goals.

It’s a good option when you still have a couple of decades to go before retirement.

However, as retirement grows ever closer, it’s important to reconsider the investment strategies you’ve had in place to this point because now it’s time to use your capital to produce income. Here are a few approaches that even the most inexperienced investor can explore with confidence:


Bonds are a tried and true method of generating income with less risk. Bonds, essentially, are investor loans to the government or select corporations, which in turn pays interest for the bond and return it at face value when it matures. You can even select a series of bonds, in what is called a bond ladder, that mature at different times.

Mutual funds

If you believe in the power of teamwork, this is the option for you. With mutual funds, many investors mutually pool their funds to achieve one investment goal. It can often feel overwhelming to approach the investment community with just your own income. Pooling resources can help you make a bigger mark on the market.

Real estate

For anyone who wants to move it up a level from investing simply in stocks and bonds, real estate can be an excellent choice. You don’t have to actually buy and run a particular property. Instead, you can participate in a real estate investment trust (REIT), allowing your money to appreciate in the real estate market without ever having to fix a boiler.


Often considered a better strategy for younger and more risk-tolerant investors, stocks can form a productive part of a retirement portfolio at any age. The rule of thumb is to subtract your age from a hundred, and then whatever that number is should be the top percentage of your wealth you have invested in stocks. So if you’re 70 years old, no more than 30 percent of your money should be in stocks.

Bottom line

Investing can seem complicated, but with these simple strategies you might see a new future, and more income, for yourself as a savvy investor.

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