What are the differences between stocks and bonds for retirement planning?

What are the differences between stocks and bonds for retirement planning?

Stocks are equity investments that can offer high returns but come with higher risk, while bonds are debt investments that provide more stability and fixed income.

Which one should I invest in for a safer retirement?

If you're looking for safety, bonds are generally considered safer than stocks. However, a balanced approach with both can be beneficial.

What percentage of my portfolio should be in stocks versus bonds?

A common rule of thumb is to subtract your age from 100 to determine the percentage of stocks. The rest can be in bonds, but it depends on your risk tolerance.

Can you explain the risks associated with stocks?

Stocks can be volatile and their value can fluctuate significantly. Economic downturns, company performance, and market sentiment can all impact stock prices.

What are some good bond options for retirement?

Consider government bonds, municipal bonds, or corporate bonds. Each has different risk levels and returns, so it's important to research.