Middle-aged couples may use some of the money to send their kids to college. Your goals might include a desire to retire early or to take lots of vacations. Write down every reason you can think of for saving money, then group them according to how many years down the road they lie. In retirement planning, the big factors are risk , return and time . You probably don t want to spend a lot of time following the stock market and constantly moving your investments around.
Return comes to investors when they own or loan something.
You own part of a company when you invest in stocks. You loan money when you invest in bonds. Even money market funds are a form of bond investment, although the loans are for very short periods. For this reason they are called notes . The number of years you have to invest will have the most profound impact on your retirement nest egg, so carefully consider the time frames for each of your goals.