Top 5 Retirement Funds

Reviewed: November 21, 2014
By FinanceWeb

Retirement Trends

Many people have had to re-think retirement funding because of the current rates of interest on bank deposits and savings. Perhaps one expected to have savings of $250,000 at 4 percent that would generate $10,000.00 per year. If interest rates remain at 1 percent, then the return will be far less than planned, it would be $2,500 rather than $10,000.00. The goals of a comfortable retirement have put many older Americans into the workforce into a transition between full retirement and full-time work. A gradual phasing out which in effect provides income, and reduces the dependence on savings, pensions, 401(k) and social security. The delayed or lower rate of use of these retirement assets can provide an opportunity. One can let retirement plan funds compound further, and extend the projected range of support either in time or amounts. One will have more to use at later times in retirement.

Flexible approach to Retirement Income

Those near retirement can use retirement investment income with part-time retirement employment income to phase-in retirement. Many part-time employed seniors report earnings in excess of $25,000 per year. Income from retirement mutual funds can also add to future retirement security. With yields in the range of 4 to 5 percent per year, these funds offer excellent short and long-term prospects.

Investment Profile for Top 5 Retirement Funds

There must be an emphasis on producing income. The mix of assets dedicated to high-income selections is in the range of 60 percent among the top retirement mutual funds. Approximately 40 percent of the balance goes into equity selections to give the fund a solid present and future stance on earnings and value. The annualized growth rate is in the range of four to five percent and five-year ranges near 8 percent. Allocations can vary, and flexibility is a good way to maximize both income and equity.

Allocation Approaches of Top Retirement Funds

An excellent way to proceed is through funds that invest in other top funds. The fund of funds approach is a tool for managing risk and adding predictability to the income producing investments. The top producing funds can be of various sizes. One can balance large funds that handle institutional accounts with smaller emerging funds with high monthly yields and an impressive year to date performance. This approach, as seen in the top rated TIAA-CREF Lifecycle Retirement Income Fund, takes a broad swath of successful high-income funds. Vanguard Target Retirement Income is a mix of stocks and bonds with a five-year return slightly over 7 percent. It is an example of combining the stock and bond sectors to good effect. This approach is another effective treatment for managing risk and producing dependable high-income returns. JPMorgan SmartRetirement Income Fund has below average fees at .27 percent, and it has an average risk for the category. It is a fund of funds using other J.P. Morgan funds as their underlying assets. An investment intended for retirees; this fund offers a broad range of investment classes among the J.P. Morgan assets. It has a strong five-year performance track. Among the best yields in top rated funds is American Century Asset Allocation Portfolios One ChoiceSM In Retirement Portfolio. It has an asset mix of 45 percent each in stock funds and bond funds, and ten percent in money market funds. Its five-year return is 8.4 percent.

Retirement Funds Are An Option

Baby Boomers going into retirement may increasingly hedge the plunge by remaining part engaged in the world of work. Many will start businesses and produce incomes that will add to short-term and longer-term retirement assets. Top retirement funds will be a prominent item for consideration in the mix with 401(k), pensions, IRA’s and social security. Interest rates will have to climb substantially to provide the boost that these solid funds can produce now.