You're probably tired of hearing the same old "save early, save often" mantra that sounds like it was ripped straight out of a 1994 brochure. Honestly, the world has changed since your parents retired. Inflation isn't just a buzzword anymore; it's a giant vacuum cleaner sucking the purchasing power out of your savings account. When people ask what are good investments for retirement, they usually want a magic bullet. They want a "set it and forget it" button.
But there isn't one.
Investing for your 60s and 70s is a weird mix of math, psychology, and just plain old patience. It’s about not panicking when the S&P 500 takes a 20% dive. It’s about realizing that a 1% fee on your mutual fund could actually cost you hundreds of thousands of dollars over thirty years. Seriously. Jack Bogle, the founder of Vanguard, spent his whole life proving that high fees are the silent killers of wealth. If you're paying a 1.5% management fee to a guy in a suit who isn't even beating the market, you're basically paying him to lose your money.
The Core Foundations: Low-Cost Index Funds
If you want the honest truth, most people should just stick to low-cost index funds. That’s it. That’s the "secret." An index fund, like one that tracks the S&P 500 or the Total Stock Market, basically buys a tiny piece of every major company in America. When Apple, Microsoft, or Amazon win, you win.
Why is this better than picking individual stocks? Because most people—including the "experts" on Wall Street—are terrible at picking winners consistently. According to the S&P Indices Versus Active (SPIVA) scorecard, over a 15-year period, nearly 90% of actively managed large-cap funds underperformed the S&P 500. Think about that. People get paid millions to beat the market, and 9 out of 10 times, they'd have been better off just buying the index.
Why Vanguard and Fidelity are your friends
Vanguard’s VTSAX or Fidelity’s FZROX (which has a 0% expense ratio) are staples for a reason. They're cheap. When you're looking at what are good investments for retirement, "cheap" is a feature, not a bug. Every dollar you don't pay in fees is a dollar that compounds for you. Over 40 years, the difference between a 0.05% fee and a 1% fee is staggering. We’re talking about the difference between retiring in a beach house or retiring in a basement.
Real Estate: Not Always the Passive Dream
People love talking about "passive income" from rental properties. You’ve seen the TikToks. They make it look like you just buy a house, find a tenant, and collect checks while sipping margaritas.
It’s usually a lie.
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Being a landlord is a job. It involves broken water heaters at 3 AM and tenants who decide that paying rent is "optional" this month. However, real estate is still one of the best ways to build wealth because of leverage. You put 20% down, and the bank gives you the other 80%. If the house goes up 5% in value, you didn't just make 5% on your money—you made 25% on your initial investment (minus interest and costs).
If you don't want to deal with toilets and tenants, you can look at REITs (Real Estate Investment Trusts). These are basically stocks for real estate. You get the dividends without the drywall dust. Companies like Realty Income (O) have paid monthly dividends for decades. It's a solid way to get exposure to commercial or residential property without having to own a hammer.
Bonds are Boredom (And That's Good)
Bonds are the boring uncle of the investment world. Nobody gets excited about a 4% yield on a Treasury bond. But when the stock market is crashing and everyone is screaming on CNBC, those bonds are what keep your portfolio from hitting zero.
The I-Bond Craze
A couple of years ago, everyone was obsessed with Series I Savings Bonds because the rates spiked alongside inflation. They’re still a decent tool for protecting cash. They aren't going to make you a millionaire, but they guarantee you won't lose your shirt to the "inflation monster."
A common strategy is the 60/40 split—60% stocks, 40% bonds. Is it perfect? No. Some experts, like those at BlackRock, argue that in a high-inflation world, you might need more stocks to stay ahead. But for someone who gets an ulcer every time the Dow drops 500 points, bonds are basically a sedative for your portfolio.
Dividend Growth Investing: The Paycheck Replacement
This is where things get interesting for people nearing retirement. Dividend growth stocks are companies that don't just pay a dividend, but they increase it every single year. These are the "Dividend Aristocrats"—companies like Johnson & Johnson, Coca-Cola, or Procter & Gamble.
Imagine you bought a stock 20 years ago. Back then, the dividend was small. But they raised it every year. Now, the amount they pay you in dividends might be 10% or 15% of your original investment every single year. That’s "yield on cost." It’s basically building your own pension plan.
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You aren't looking for the highest yield here. You're looking for the most sustainable yield. A company paying a 10% dividend is often a company in trouble. A company paying 3% that grows 8% a year? That’s the gold mine.
High-Yield Savings and CDs: Finally Relevant Again
For a decade, savings accounts paid 0.01%. It was insulting. You’d have a million dollars in the bank and earn enough interest to buy a sandwich. Maybe.
Things are different now. With the Federal Reserve's rate hikes over the last few years, you can actually get 4% or 5% in a High-Yield Savings Account (HYSA) or a Certificate of Deposit (CD). If you are 2 years away from retirement, you should not have your "living money" in the stock market. You should have it here.
Cash is a position. Don't let anyone tell you otherwise. Having two years of living expenses in a liquid, high-yield account allows you to ignore market volatility. If the market crashes 30% tomorrow, you don't care, because you don't need to sell your stocks for at least two years. That’s how you avoid the biggest mistake in retirement: selling at the bottom.
Roth vs. Traditional: The Tax Ghost
You can have the best investments in the world, but if Uncle Sam takes 35% of it, did you really win?
The Roth IRA is the greatest gift the government ever gave to the middle class. You pay taxes now, and the money grows tax-free forever. You take it out at age 70? Tax-free. Your heirs inherit it? Tax-free (mostly, thanks to the SECURE Act changes).
A Traditional IRA or 401(k) is the opposite. You get a tax break now, but you owe the IRS later. Most people assume they’ll be in a lower tax bracket when they retire. But will you? If you've been a diligent saver and have a million-dollar 401(k), plus Social Security, plus maybe a small pension, you might actually be in a higher bracket. Plus, tax rates in general might go up. The US debt isn't getting any smaller, right? Diversifying your "tax buckets" is just as important as diversifying your stocks.
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What Are Good Investments For Retirement? The Psychology Side
We need to talk about the "sequence of returns risk." This is a fancy way of saying: "What happens if the market tanks the day after you retire?"
If the market drops 20% while you're still working, it's a "sale." You buy more.
If the market drops 20% when you're withdrawing 4% a year for groceries, it’s a disaster.
This is why "good investments" change as you age. It’s not just about the assets; it’s about the timeline. Someone who is 30 should be 100% in equities (stocks). Someone who is 62 should probably be looking at a "bond tent" or a "cash bucket" strategy. You want to insulate your immediate needs from the chaos of the market.
Gold and Crypto: The Wildcards
People love to argue about gold. Peter Schiff will tell you the world is ending and you need gold bars in your basement. Is it a good retirement investment? Historically, it's been a store of value, not a wealth creator. It doesn't produce anything. A farm grows corn. A company makes iPhones. Gold just sits there looking shiny.
Then there's Bitcoin. For some, it's "digital gold." For others, it's a Ponzi scheme. Even institutional giants like Fidelity and BlackRock have started adding it to portfolios via ETFs. If you're going to do it, keep it to a "speculative" 1% to 3% of your portfolio. Don't bet the mortgage on it.
The Actionable Plan
Forget the noise. Forget the "hot tips" from your brother-in-law. If you want to actually build a retirement nest egg that lasts, follow a boring, repeatable process.
- Audit your fees. Look at your 401(k) or brokerage. Anything with an expense ratio over 0.50% needs a very good reason to exist. If it's over 1%, fire it.
- Max the match. If your employer offers a 401(k) match, that is a 100% return on your money instantly. It is the only "free lunch" in finance.
- Automate the boring stuff. Set up an auto-transfer to a Total Stock Market Index Fund. Do it every month, whether the news is good or bad.
- Build the "Cash Buffer." As you get within 5 years of your "finish line," start moving 2-3 years of living expenses into high-yield savings or short-term bonds. This is your "Sleep Well At Night" fund.
- Think about the "Tax Alpha." Try to get a mix of Roth and Traditional assets. This gives you flexibility in retirement to choose which "bucket" to pull from to keep your taxable income low.
The reality of what are good investments for retirement is that they are the ones you can hold onto when the world feels like it's falling apart. Consistency beats brilliance every single time. You don't need to find the next Nvidia; you just need to not sell the S&P 500 when the headlines get scary.
Stop over-optimizing. Start simplifying. The best portfolio is the one you understand well enough not to mess with.
Practical Next Steps
- Check your Expense Ratios: Log into your retirement account today and look for the "Expense Ratio" column. If you see numbers like 0.75% or 1.2%, look for a cheaper index fund alternative within the same plan.
- Calculate your "Burn Rate": Figure out exactly how much you need to live on per month. Multiply that by 25. That’s your "Fire Number"—the amount you need to retire comfortably using the 4% rule of thumb.
- Consolidate Old Accounts: If you have four different 401(k)s from four old jobs, roll them into a single IRA. It’s much easier to manage one giant pot of money than five small ones scattered across the internet.