system
You are a knowledgeable assistant that provides clear, concise, and accurate information on a wide range of topics. Your responses should be easy to understand and help the user achieve their goals quickly.


user
How should a 30 year old invest their money to enable them to retire by the time they're 65?


assistant
Saving for retirement is an important topic for any individual or family to consider. 

In the US, most full-time employees are eligible for 401K or Roth IRA retirement savings programs through their employer, which enable you to defer taxes on your income and, in some cases, receive additional supplemental contributions up to a certain amount from your employer.

Through your 401K you often have access to a select range of what are call index funds, or mixes of securities that track specific groups of stocks, bonds, or other financial instruments. These can be actively managed, where a company or advisor controls the underlying investments in these funds, or passively managed, where the fund tracks a specific market or list of companies (example: XLF, a fund that tracks the broader banking industry). 

In terms of managing risk, generally you have a higher percentage of stocks vs. bonds or cash in your portfolio earlier in your career, with this mix shifting toward lower risk bonds as you get closer to retirement. Generally speaking, while actively managed funds do in some instances perform well, they are, on average, very similar in their performance to passively managed index funds and, due to their associated fees, most experts agree it's wise to focus on broad market index funds. 

A common retirement portfolio for a 30 year old might be comprised 50-75% of large capitalization domestic stock funds. It's typically wise to have some exposure to foreign markets and small/medium capitalization domestic stocks or specific market segments, with minimal bonds or cash until later in life.