Not all investments are created equal — and understanding the differences can help you make smarter decisions about your retirement plan. In this video, HR expert Kari Nelson breaks down the most common investment options, including mutual funds, bond funds, and target-date funds.
You’ll learn how each works, how to balance risk and stability as you age, and what factors to consider when deciding where to put your money. Whether you prefer hands-on management or a simple “set it and forget it” approach, this session gives you the tools to build a balanced, informed portfolio for long-term growth.
Watch now to gain clarity on your investment choices and feel more confident planning for your future.
0:01
Okay, so let's talk about investments.
0:03
We could talk about it all day. I just
0:05
want to scratch the surface and some
0:06
tips. Uh before you choose the specific
0:09
investments that you want, there's two
0:12
things to consider. Your age and your
0:14
risk tolerance. You know, if you're
0:16
younger, you can ride the storm of the
0:20
stock market that might go up and down
0:22
and up and down over the years. So,
0:24
people who are younger tend to be
0:26
riskier in their options. It could be
0:29
stocks, mutual funds, things like that.
0:31
When people are older, they tend to go
0:33
for safer
0:36
funds like bonds or a money market or
0:39
even savings accounts which pay less but
0:42
are safer. So consider your age and then
0:46
consider your risk tolerance. You know,
0:48
you could save anywhere from 0% or even
0:52
a negative amount to doubling your money
0:54
every year if you want to take more
0:56
risk. Uh some people it stresses them
0:58
out. If it's going to stress you out to
1:01
have high risk, then stay in safer
1:02
funds. See how it makes you feel. And
1:04
again, you can change your mind over
1:06
time and go into different things. But
1:08
try at least try and get your foot in
1:10
the door. So once you've thought about
1:12
your age and your risk tolerance, then
1:14
you need to start picking what do you
1:16
want to choose? What would you like to
1:17
invest in? There are dozens and dozens
1:19
of options. I'm only going to go through
1:21
a few right now. Mutual funds is one of
1:24
the most popular for retirement
1:26
planning. They're professionally
1:27
managed. It's a pool of capital from
1:30
many investors. It's a mixed portfolio.
1:33
So, I don't know, one mutual fund could
1:35
have Apple and it could have McDonald's.
1:38
You know, they're different types of
1:39
companies, but it could have different
1:41
kinds of stock all put together and and
1:43
they're usually a safer bet because it's
1:45
well funded. If one industry does very
1:48
poorly, uh the overall fund doesn't go
1:50
down as much as an individual stock. So
1:53
mutual funds are very popular. There's
1:55
also bond funds. Bond funds invest in
1:58
municipalities, corporations, or the
2:01
government. Uh the they offer lower
2:04
returns but less risk. Then another
2:07
option, again just one of the many
2:09
dozens of choices, a money market
2:11
account. Usually a company sponsored
2:13
plan has at least one money market type
2:15
of account which is the absolute safest
2:18
but it's the lowest return and can also
2:21
be similar to a savings account. So uh
2:24
that's typically only done when people
2:26
are closer to retirement really want
2:28
that security. It's up to you. Choose
2:30
what's right for you.
2:33
There's one other option that I wanted
2:34
to mention. These are target date funds
2:37
and these are available whether you have
2:39
a company sponsored plan or you choose
2:41
to do this on your own. These target
2:43
date funds which are also known as
2:46
agebased funds or maybe life cycle
2:49
funds. These are mutual funds like I
2:51
discussed that are diverse but they're
2:54
managed more closely by a company and
2:56
they change their funds over time. When
2:59
you join a target date fund you say when
3:02
you plan to retire. Is it in 2040, 2050,
3:05
2060? What year do you plan to retire?
3:09
And then they allocate to riskier
3:11
invest. They start with higher riskier
3:14
investments in the beginning and then
3:15
over time as you get closer to
3:17
retirement, they go into safer and safer
3:20
funds. So, it's nice that way. It's sort
3:22
of a set it and forget it thing where
3:25
you can have it managed for you.
3:27
However, there's higher fees involved in
3:29
that. So, uh, it might sound really good
3:33
and they might have a good return, but
3:35
they might be taking 20 or 30% of your
3:37
return. So, it's something to think
3:40
about. It's something if you're new to
3:42
it, you might want to start with and
3:43
then take the time, do some education
3:45
over the years. You might want to start
3:47
managing it yourself over time, but it's
3:49
