The idea of retirement typically appeals more to individuals who have been in the workforce for two or three decades. A 23-year-old college graduate likely has less focus on closing out a career than a 55-year-old wage earner who has planned and saved for 30 years. Despite the stage of life, all individuals should plan for retirement accordingly, positioning their assets with an eye on risk tolerance and time horizons.

Growth Stocks

Every retirement portfolio needs growth components regardless of whether an individual is 65 or 25. The difference manifests in what percentage should be devoted to a security, such as a technology stock. Tech companies such as Inc. (NASDAQ: AMZN) plow earnings back into research and development (R&D), leading to potential share price appreciation. Investors with a longer time to retirement can afford larger allocations devoted to growth investments.

Dividend Stocks

Pre-retirees with a five-year time horizon need to focus on stability but need not eschew equities completely. A large, established company such as Exxon Mobil Corporation (NYSE: XOM) has a solid history of share price stability and a dividend yield of 3.37%, as of Aug. 2, 2016.

High-Yield Bonds

Stretching for high coupon payments poses risk in the arena of high-yield bonds. Companies issuing such bonds may be in financial distress. Default risk becomes more of a reality with high-yield bonds than the debt of a company whose issues are rated higher. Younger investors with 20 to 30 years until retirement have more time to shake off principal loss resulting from default.

U.S. Treasurys

A 60-year-old ultra-conservative employee on the edge of retirement may wish to hold a large percentage of U.S. government bonds for income and preservation of capital. The 10-year U.S. Treasury bond yields 2.26% as of Aug. 5, 2017, and is backed by the full faith and credit of the U.S. government.

Real Estate

Hard assets such as residential or commercial real estate are an excellent means to grow capital and generate income, which can be invested for retirement or used to purchase other properties. The daily grind of property management often becomes burdensome for older investors who, as a more leisurely lifestyle approaches, may wish to sell off these assets in favor of municipal bonds or utility stocks.


Investing in physical gold bullion or coins has its drawbacks. Storage becomes difficult for larger amounts of the physical asset, but gold is an excellent store of value and more than tripled in price from 1996 through August 2017, when 1 ounce moved from $369 to $1,261. Gold investing appeals to hard asset investors of all ages with a growth investment objective.

Mutual Funds

As the pooled security offered by nearly all 401(k) plans, mutual funds are an easy way for older investors to maintain growth exposure while diversifying assets for a more stable play than individual stocks or bonds. A balanced mutual fund such as the Fidelity Balanced Fund ("FBALX") holds a medium risk profile with a five-year average annual return of 10.23% through Aug. 5, 2017.

Exchange-Traded Funds

Exchange-traded funds (ETF) present a way for young, aggressive investors to reach very specific markets that would otherwise be inaccessible. Investing in the VanEck Vectors Vietnam ETF (NYSE ARCA: VNM) is an inexpensive way to gain exposure to emerging markets while time horizons are lengthy.


When the 401(k) and individual retirement accounts (IRA) are maxed out, fixed and variable annuities offer a way to continue contributions to a tax-deferred account in which earnings grow unencumbered until withdrawal at retirement. Annuities also have insurance wrappers that guarantee account values to beneficiaries. Fixed annuities are backed by the issuing insurer and often have higher rates than bank certificates of deposit (CD).


Regardless of age, all retirement investors need a place to park funds for easy access and risk-free returns. Mutual fund money markets and savings accounts offer maximum safety and liquidity if needed for an emergency, or a spontaneous purchase. Cash equivalents lay a solid foundation on which the balance of riskier retirement investments can be layered.

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