What Is the Best Investment for Retirement?

The best investment for retirement can be as simple as one low-cost target-date mutual fund — a one-stop shop, fully diversified investment portfolio — but other strategies may work better for you, depending on what type of investor you are.

Quick take: For the vast majority of us, investing for retirement is not our day job. We want to set it and forget it and rest comfortably in the knowledge that our money is growing over time. That’s easy with a low-cost target-date mutual fund. Another option? Building a low-cost portfolio using a handful of index mutual funds, aka a Lazy Portfolio. Or, for a fully hands-off experience, consider a robo-advisor. (Before you pick the best retirement investment, be sure to pick the best retirement account.)

Tell me more! Here are three great ways to invest for retirement. Pick one and voila, you’re done (but don’t forget to set up regular deposits into your account!).

• Invest in a target-date mutual fund. I meant it when I said these are one-stop-shop mutual funds. You pick one target-date mutual fund based on the year you expect to retire. The fund manager handles the investing work, including building a diversified portfolio and shifting toward more conservative investments as the retirement date gets closer. All you do is pick one mutual fund. That’s it. Now get outside for a walk or a run. You are literally done investing for retirement.

Or…

• Invest in a handful of mutual funds known as a Lazy Portfolio. Different investing experts have come up with unique portfolios — you simply pick one to mimic. We detail a few different Lazy Portfolios in this story on investing for retirement. A Lazy Portfolio is hands-down the cheapest option (no extra fee for a target-date fund manager to take care of the dirty work for you) but you will need to keep an eye on your portfolio, rebalancing if investment gains or losses push your asset allocation out of whack, and moving toward more conservative investments as you near retirement.

Or…

• Invest through a robo advisor. Most of the big-name brokers offer a robo-advice option. You enter some information about yourself and your goals, and the robo advisor picks one of a handful of investment portfolios designed for people in your situation and with your risk tolerance. You’ll pay a fee for this service, but it’s cheaper than going to a financial advisor, and a smart option for people who need to invest for retirement but can’t seem to get it done on their own. Dive deeper: What is a robo-advisor?

Bottom line: Hands-down, no joke, the most important aspect of investing for retirement is simply to do it. As long as you’re finding low-cost investments (i.e. no annuities, thank you), then harnessing the power of the stock market to grow your money over time is the best thing to do. Picking any one of the three “best investment” ideas above is going to get you there. Just do it! It’s never too late to get started.