The instructions indicate that the project is focused upon retirement investing. It requires that you make your investment decisions like you would when you start your new job. A list of 4 mutual funds companies has been provided to you (Fidelity Vanguard, TIAA–CREF and T. Rowe Price). You are then instructed to search for and choose one to be used in your investment decisions.
Fidelity is my preferred firm. The website is easy to use and offers many investment options.
I’ll next choose to open a Roth IRA. This decision was made because my retirement income is higher and I want the freedom to take my contributions without tax.
Also, I plan to use index funds (passive) Because index funds have higher long-term performance and lower fees than active funds, I chose this option.
Because ETFs are flexible and liquid, I’ll use them. I also like that I can trade them as stocks.
For the selection of funds, I’ll use a mix of individual funds. After doing research in different industries, I found diversifying my portfolio through multiple sectors can help reduce risk. Funds with low expenses and a track record of high performance have been my choice.
If I work at 25 and retire at 65, then I’ll save $500 each month. At a rate return of 3% I’ll have $375,000 when I retire.
This means that I could withdraw $1,500 each month during my retirement.
My understanding of available investment options and my ability to accept risk were the key factors in my decision-making process. My portfolio of funds, including ETFs, will enable me to meet my long-term retirement goals. It is diversified and affordable.