Mutual Funds: A Core Solution for Retirement Investing


Mutual funds are among today’s most common vehicles for accumulating retirement savings. They also offer a variety of options for generating income during retirement.

Whether used in taxable accounts with municipal bonds to help generate tax-free income or in tax-deferred accounts through the use of a convenient systematic withdrawal program, mutual funds may be able to deliver income for retirement without the restrictions commonly found in other investments.

Mutual funds offer a wide range of investment options, including stocks, bonds, commodities or alternative strategies. They also offer the convenience and flexibility that make them the investment of choice for millions of investors. Below is just a sample of the other features that mutual funds can offer.

Core option

Mutual funds are available to use in a variety of account types, such as Traditional and Roth IRAs, SEP and SIMPLE IRAs, and 401(k) and 403(b) plans, to name a few, and can invest in a wide variety of strategies.

Tax deferral

When invested in a qualified retirement account, such as a 401(k) or IRA, any gains accumulate tax-free until withdrawn. Over time, tax deferral combined with potential growth can help investors achieve their goals.

Reasonable costs

Mutual funds are a cost-efficient way to access a bucket of individual securities. While investors may pay sales charges or management fees, these are usually reasonable, compared with other investments.

Full access

Investors always remain in control of their money. In a non-qualified (taxable) account, funds can be withdrawn at any time without being subject to an additional 10% tax penalty. In a qualified (non-taxable) account, any withdrawal before age 59½ will be subject to a 10% penalty and taxed as ordinary income.

Income and more

Many stock funds pay dividends that offer income on a monthly or quarterly basis, and are taxed at a lower rate than ordinary income tax. Dividends also have the potential to grow over time, thereby helping to protect purchasing power in retirement.

Estate ease

Since mutual fund assets remain in control of the individual investor, funds can be automatically transferred to one or more beneficiaries upon death of the owner.

The Advisor Partnership Program - Investor Education

Asset Class

Investing Principles

  • The Cost of Timing the Market
  • The Elements of Investing
  • Tax Wise:  Taking Advantage of Tax-Deferred Investment Options
  • Making Your Retirement Savings Last

Investment Products & Strategies

Lessons in Retirement Investing - What Investors Need to Know about Mutual Funds

An overview of investing in mutual funds to save for retirement, what you should know before investing, and the investment options available to you.

Your financial professional can help you develop a long-term investment plan with a balance of strategies that addresses your need for portfolio growth, income, capital preservation and risk management.



All investments involve risk, including possible loss of principal. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges.

All investments involve risk, including possible loss of principal. Equity investments generally provide an opportunity for more capital appreciation than fixed income investments, but they are subject to greater market fluctuations. A municipal bond fund investor may be subject to the federal Alternative Minimum Tax, and state and local taxes may apply. Capital gains, if any, are fully taxable. Fixed income securities involve interest rate, credit, inflation and reinvestment risks; and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Equity securities are subject to price fluctuation and possible loss of principal.

Diversification does not assure a profit or protect against market loss.

Dividends may fluctuate and a company may reduce or eliminate its dividend at any time.  While dividends may cushion returns in down markets, investments are still subject to loss of the principal amount invested.

Any information, statement or opinion set forth herein is general in nature, is not directed to or based on the financial situation or needs of any particular investor, and does not constitute, and should not be construed as, investment advice, forecast of future events, a guarantee of future results, or a recommendation with respect to any particular security or investment strategy or type of retirement account. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies should consult their financial professional.