- RRIFs (Registered Retirement Income Funds)
- TFSAs (Tax-Free Savings Accounts)
- non-registered accounts
Some mutual funds even offer monthly income options. Such can be useful for retirees who need regular payments. It’s also wise for senior investors to think about liquidity. While mutual funds are generally easy to redeem, some might have fees or penalties for early withdrawals.
All in all, mature investors who want to learn how to start investing in mutual funds should first consult a financial advisor. So, if a senior client approaches you for your service, start by assessing their financial profile and estate plans. Ask about health expenses, if any, and help them see if investing in mutual funds fits their retirement lifestyle while managing risk.
Mutual funds are investment products that pool money from many investors to buy a mix of assets. These assets can include stocks, bonds, cash, or a combination of them. Each investor owns units of the mutual fund. These units represent a share of the fund’s total holdings.
Mutual funds are managed by professional portfolio managers. These managers decide which assets to buy, hold or sell, based on the fund’s goal. For example, a growth fund might focus on stocks that have strong potential to increase in value. An income fund might invest in bonds that pay regular interest.
Mutual funds also come with fees, such as the Management Expense Ratio (MER). Financial advisors must be sure that their clients who want to build their portfolios are aware of these costs.