The 7 Most Popular IRA Investments

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Smart investor holding cash
Hryshchyshen Serhii /

Many of us find it challenging to save money for retirement. But simply increasing savings is only half the battle.

Once you commit to fattening your nest egg, you have to decide how to invest that cash.

Recently, the Investment Company Institute surveyed more than 9,000 adults to learn more about the characteristics and activities of those with IRA accounts.

As part of the survey, the ICI asked savers to reveal how they invest the money in their traditional and Roth IRAs. Following are the most popular IRA investments.

1. Mutual funds

Mutual funds
JohnKwan /

Households with this type of IRA investment: 73%

For nearly a century, investors have turned to mutual funds when investing in the stock market. These funds consist of pools of money from many people that are invested in stocks, bonds and short-term debt.

The mutual fund celebrates its 100th birthday in 2024, and it remains the king of the hill among investment options.

The late John Bogle started the first index mutual fund in 1976. Find out why all investors owe him a debt of gratitude in “Investing Pioneer Showed Us How Fees Rob Our Retirement Funds.”

2. Individual stocks

Bull and bear
Bacho /

Households with this type of IRA investment: 51%

If mutual funds — particularly index funds — represent the slow-and-steady way to build wealth, individual stocks offer more of a thrill ride.

Like those who ride a roller coaster, investors who purchase individual stocks can experience soaring highs and plummeting lows. As Money Talks News founder Stacy Johnson has said:

“While individual stocks are riskier, they also offer a better opportunity to hit a home run than with a mutual fund.”

For more on Stacy’s take, check out “Which Is Best — Individual Stocks or Stock Mutual Funds?

3. Exchange-traded funds

zhaoliang70 /

Households with this type of IRA investment: 32%

Exchange-traded funds are similar to mutual funds but with a twist. As with stocks, you can purchase an ETF at its current market price at any given moment while markets are open.

On the other hand, the cost of mutual funds is based on the closing price at the end of the trading day.

ETFs have become an increasingly popular alternative to mutual funds in recent years. You can learn more about ETFs in “Are Exchange-Traded Funds a Good Retirement Investment?

Other IRA investments

Jars of growing accounts
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Other places where investors park their IRA money include:

  • Annuities: 26%
  • Bank savings accounts, money market accounts or CDs: 17%
  • Individual bonds (excluding U.S. savings bonds): 20%
  • U.S. savings bonds: 12%

Now that you know where your peers invest their money, how about you? If you are unsure of how to move forward, enroll in the Money Talks News course Money Made Simple.

MTN founder Stacy Johnson offers 14 weeks of lessons on money basics in the course. You will learn how to improve your financial life in all the following areas:

  • Budgeting
  • Banking
  • Credit
  • Taxes
  • Insurance
  • Investing
  • Real estate
  • Estate planning

After finishing these lessons, you will be ready to manage money more efficiently while spending less time getting the results you want. As Stacy writes:

“Whatever your situation, understanding and learning to control your money is going to improve your life. If you’re rich, you want to stay that way. If you’re not, you want to get that way.”

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