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What Are the Best Retirement Investments For Me?

The best retirement investment for you is the one that meets your goals and needs.

You may be approaching retirement. If you’re reading my blog, I’d say it’s a pretty good possibility that you are approaching retirement.

Most importantly, you are seeking information to make better decisions. You may be wondering, “What are the best retirement investments for me?”

You don’t want to pick a “bad” investment. But we have to define what “bad” really means. Traditionally when you think of a “bad investment” you think of one that loses money.

But what if you invested in a hypothetical mutual fund that over a 10 year period had a 12% average annual growth rate. That would seem like a “good investment,” right?

But let’s say that while you held that mutual fund, one year it had a horrific 40% decline in value. Now, if you have the fortitude to hold on to this investment over the 10 year period it should rebound. And after everything is considered, the average growth rate over the 10 year period would turn out to be a healthy 12% annual growth rate.

But what if you didn’t have the fortitude to hold on to this investment after it dropped 40%? What if it scared you so much that you sold at the bottom, locked in your loss, and never got to experience that full annual 12% growth that it averaged over the 10 year period?

I’d say that you had owned a “bad investment.” Why?

Because it wasn’t in line with your risk tolerance. It doesn’t matter what the growth rate was if you weren’t able to stay invested in it.

It’s one thing to have a plan that works. It’s another thing to have a plan that works that you can stick to.

If you have an investment that doesn’t match up with your goals, needs, and ability to handle risk, then it’s not the right investment for you. There’s a good chance that you will end up getting financially hurt from owning that investment.

The good news is there are ways to narrow your options down to help you choose investments that are right for you as you enter into retirement.

Establish Your Risk Tolerance

The first way is to take a risk tolerance questionnaire. These are questions that an advisor should ask you before investing a penny of your money in the market. It will give you a good idea of what type of risk you can stomach and still be able to sleep at night.

FYI: If you already say that you couldn’t stomach any loss in an investment and that it would terrify you to even have a 0.00001% decrease in investment value, you can safely skip the risk tolerance questionnaire as you probably don’t need to be invested in the market at all.

The result of this questionnaire will be guidelines on what your portfolio should look like. The more risk averse you are, the less risky assets you should include in your portfolio.

If you have a portfolio with a lot of risk in it, and you can’t stomach the amount of volatility inherent in that portfolio, then you are setting yourself up for a disaster.

If that portfolio has a large decline, you are more likely to bail out when the prices are low and lock in your losses. This is essentially “buying high and selling low.” And that is the exact opposite of what you want to do.

And vice versa, if you have a strong appetite for risk and  you feel comfortable going for aggressive growth, you will be frustrated at your portfolio’s performance, as it never seems to grow like you think it should.

The Right Investments For You Will Change Over Time

As you get older you will probably find you have less appetite for risk in your portfolio. This is normal and makes a lot of sense as you have less years for your portfolio to recover from a market crash.

Also, when you retire your savings are the first line of defense between you and having to go back to the workforce. Therefore, protection of your savings becomes more important.

Keeping this in mind, understand that all other things being equal, the best retirement investments for you as you approach retirement are very likely going to be less risky / volatile than what you invested in when you were younger.

Avoid The Naysayers

Everyone will have their opinion of what the best retirement investment for you should be. But keep in mind, what meets your goals and needs is the only thing that is important.

So you may hear people say, “I’d never invest in an annuity. They all stink.”

First keep in mind that is just one person’s opinion. And while opinions cannot be objectively proven to be right or wrong, that opinion is objectively stupid.

If you like the guarantees and the principal protection that a fixed annuity provides, then why not consider adding that to a portion of your portfolio?

Anyone can look at the math and see that historically the market gives you greater potential for growth on your investments than a conservative financial vehicle like a fixed annuity.

But a lot of retirees can also look back less than 10 years and see that it can cause a drop of 40% in their portfolio’s value, like what happened to the S&P 500 during 2008/2009. That’s not acceptable to many retirees, especially considering they are making withdrawals of their savings at the same time to meet their retirement expenses.

And the argument goes the other way too. If someone says you should always avoid the market because you can lose money in it, that still doesn’t mean you shouldn’t be invested in the market.

You may be perfectly comfortable with the potential for short-term losses because you believe the long-term potential for gains is well worth it. And that it would meet your retirement goals and needs.

The point is, everyone will have their opinion of what you ought to do with your money and what you should invest it in. But the only person that matters is you.

This even applies when you are working with a financial advisor. The advisor must take the time to understand your goals, needs and risk tolerance before ever recommending an investment to you.


Hope that helps when you are hearing conflicting advice on what you should do with your hard earned savings.

If you know someone that is struggling with where they should invest their money for retirement, please forward this article to them. You can also easily share it on Facebook by clicking the icon on the left of the screen.

And if you need any help with where to invest your money for retirement, whether that be in the market or in an annuity, or whatever, you can ask me directly. Just click here to find a convenient time on my calendar and we’ll have a 20 minute conversation. I’ll help point you in the right direction.

Warm regards,

Chris Hammond

What are the best retirement investments for me

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Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor.  Tri-State Financial Group, and Tri-State Insurance & Financial Services, and RWA are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

This information is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Tri-State Financial Group and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.

Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors. Chris Hammond is insurance licensed in TN.