Savings vs. Investing 
Savings versus investing -what's the difference? Savings vehicles always guarantee your principal and interest. The best vehicles for savings are CDs, treasury notes, treasury bills, treasury bonds, and fixed, and fixed-indexed annuities. These products are designed for savings and for protection of your retirement savings. 
Investment vehicles are market sensitive and, hence, never guarantee principal or interest. Account values go up and down with the stock market and the economy, because that is how they work. The best vehicles for investing are said to be stocks, mutual funds, and variable annuities (the word "variable" indicates these are market sensitive). These products are designed for potential, but inherent in that potential for gain is the obvious potential for loss as well. Hence, any portion of your money that you invest, must be a portion of your money with which you can afford to accept a loss in value. 
Your retirement savings or investments are tied to risk tolerance and time.
A common sense approach to risk tolerance in regard to your assets involves asking yourself a few questions. - When would you like to retire?
- When will you need this money? Tomorrow, next month, or next year?
If you're 52 and plan to retire at 65, that's a time horizon of 13 years. If you are already retired but won't need a particular portion of your savings for 5 more years, your time horizon for that particular portion of your savings would be five years. If you won't need the money for "X" number of years into the future, you have time to accumulate and grow your savings; hence you are still in the accumulation stage. The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax adviser. Please click on the savings options below for a better understanding of how these different products work. Savings & Investment Products |
