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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years Trusted by Retirement is a big milestone, but it also brings a major shift in your financial life.<\/p>\n During your prime working years, your investment strategy typically focuses on growth and maximizing returns over the long term, according to Greenbush Financial Group<\/a>. But once you retire, your portfolio should prioritize a balance of risk and reward and shift to income and moderate growth.<\/p>\n ChatGPT said there\u2019s no single \u201cmost invested\u201d asset for all retirees, but several core investment<\/a> types tend to dominate retirement portfolios. Here\u2019s what retirees invest in<\/a> most.<\/p>\n<\/p>\n 1. Stocks and Stock Funds<\/p>\n Even in retirement, ChatGPT explained that many portfolios include stocks or stock funds for long-term growth and to help portfolios keep pace with inflation. It said retirees often favor dividend-paying stocks for income and stock mutual funds or exchange-traded funds<\/a> for diversification across many companies.<\/p>\n During your early years of retirement, Charles Schwab<\/a> recommended a moderate portfolio with 60% stocks, and then a moderately conservative portfolio in the middle of retirement with 40% stocks and a conservative portfolio after the age of 80 with only 20% invested in stocks. This helps balance growth and risk.<\/p>\n 2. Bonds and Fixed-Income Investments<\/p>\n Bonds help provide regular interest income, are generally less volatile than stocks and help protect your principal, ChatGPT said. While bonds generally provide more stability than stocks, they aren\u2019t risk-free, according to Advance Capital Management<\/a>. The biggest risk is interest rate change. When rates rise, bond prices fall. However, this doesn\u2019t mean they aren\u2019t important for retirees.<\/p>\n Retirees typically invest in individual government or corporate bonds and bond funds<\/a>, ChatGPT pointed out.<\/p>\n 3. Cash and Cash-Equivalent Investments<\/p>\n Having cash in low-risk assets can help cover short-term needs without selling other investments in a down market, ChatGPT explained. This can be savings or money-market accounts, short-term Treasury bills, or certificates of deposit<\/a>. ChatGPT pointed out that retirees sometimes keep part of their portfolio in cash for safety and liquidity.<\/p>\n Van Leeuwen & Company<\/a>, a wealth management company, recommended a one-year \u201ccash bucket\u201d rule. Under this rule, retirees should keep one year\u2019s worth of retirement cash readily available to act as a financial cushion.<\/p>\n 4. Annuities<\/p>\n Annuities are insurance products rather than traditional investments. Many retirees use these because they can provide guaranteed income for life or a set period similar to a pension, ChatGPT explained.<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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