Saving is setting money aside. Investing is putting that money to work.
If you save without investing, your money won’t grow—or will grow very slowly. Without the potential growth from investing, it’s difficult to reach long-term goals like retirement.
Short-term goals, like saving for a vacation, might make sense to keep in cash. But retirement is a long-term goal. That’s where investing becomes essential.
One key concept in investing is diversification: don’t put all your eggs in one basket. Investing all your money in a single stock or asset can be risky. But spreading your money across hundreds or thousands of stocks and bonds helps reduce that risk and still allows for growth.
Fortunately, it’s easier than ever to invest in a diversified way.
One of the simplest ways to invest for retirement is through a target-date fund. When you enroll with Common Wealth, we suggest a target-date fund based on your age and expected retirement date. About 9 in 10 members use the suggested fund.
Target-date funds automatically adjust your investment mix to become more conservative as you approach retirement.
