Saving for Retirement
Here are the most common types of investments:
Virtually zero risk investment, but return on investment will also be the lowest.
Debt that pays interest, typically higher risk than money market but with slightly higher returns.
Buy buying stock, you are taking a small ownership position in a corporation. Although stocks come with a higher risk than other types of investments for retirement, there are often higher returns which can be yielded, as well as an increase in the versatility when it comes to reaping the benefits of the investment.
A mutual fund is a managed investment vehicle that you can buy that has investments in stocks and/or bonds.
An ETF is an Exchange Traded Fund. It trades like a stock, but typically tracks specific market indexes.
IRAs and 401ks are commonly used when saving for retirement due to the tax-benefits offered when using them. Depending on the type of 401k/IRA that you use, you'll either have an upfront tax deduction or not be taxed when you begin to withdraw funds. Inside of your retirement accounts, you'll typically have an option to invest in money market, bonds, and stocks.