Retirement Funds Investment Strategies

Savings and investing your retirement plan funds are very similar to running a marathon. You need to develop a solid, consistent investment strategy, then stick with it year-in and year-out through all the economic cycles, stock market gyrations and job changes that will inevitably transpire over the years.

There are two investment strategies that are critical to maximizing the growth of your retirement account funds over the years:

  1. During your wealth-building (working) years – from your teens all the way to a few years prior to your retirement - your investment strategy should prioritize long-term capital appreciation. Interest, dividends, long-term capital gains, and distributions received are reinvested in your retirement plan investment portfolio to contribute towards its growth.
    And “Yes”, one can and should start saving for their retirement in their teens if possible. By doing so, you can capitalize on maximizing the Power of Compounding throughout your life. To develop a better understanding of this concept, please take a moment to review Building a Child’s Roth IRA.
  2. As you get closer to retirement, your investment strategy should shift towards income-producing investments. It is the income derived from your retirement plan investment portfolio that will help to replace your salary, wages, or self-employment income in retirement, providing a “paycheck” to help meet your monthly expenses.

Michelle Singletary, a financial columnist with the Washington Post, put this long-term retirement investment strategy so aptly in her article Move over, crypto. A record number of workers are becoming millionaires with their boring 401(k)s and IRAs.” that was published in the Washington Post on February 18, 2022.  Here are the first five paragraphs of Ms. Singletary’s article:

"Meet the newly minted millionaires next door. 

"They didn’t put all their money into a Microsoft-type stock that made them rich. They didn’t take a chance on speculating in cryptocurrency with its crazy volatility or start a business that they then sold to some billionaire. 

"No, many current millionaires are government workers, civil servants, educators, military service members (or retired military), managers or co-workers clocking in just like you, leaving at the end of a shift to run and pick up their kids from school. Many never earned six-figure salaries. 

"They’ve been investing for nearly three decades, taking every dollar offered by their employers in matching retirement plan contributions. They also don’t cash out their retirement savings when they change jobs. 

"And, most importantly, they didn’t let a pandemic or the related economic problems, or skittish investors, scare them away from the stock market."

You can read Ms. Singletary’s entire article here:

Your retirement plan investment strategy should stay away from speculative investments of any kind – i.e., no day trading, purchases of call and put options, futures contracts or straddles, cryptocurrencies or Self-Directed Retirement Accounts. Why? Because, unlike with a conventional investment account, you cannot replace speculative investment losses in your retirement plan accounts. Those funds are lost forever.

More Topics


Self-Employed Individuals

Gifts & Gift Tax


"As we moved through the data collection process of our tax preparation it was clear that Joe had our best interests at heart."

Adam & Karen, Owner | MetroWest, MA

"It's rare to meet a professional who is as detailed, thorough and thoughtful as Joe."

Mike Schell, Millis, MA

"I highly recommend Joe. He is able to explain to his clients today's complex tax issues in a manner that is more understandable."

NS, Sunapee, NH

Have a Question? Contact Us Today!

Sunapee: 603.763.0350

24 Pine Grove Rd., Sunapee, NH 03782

Lexington: 781.274.6600

405 Waltham St., Suite 382, Lexington, MA 02421