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There is not a catch-all best mutual fund for retirement planning. Picking the right mutual fund to finance a happy retirement depends on how much money you have to invest, how many years left working you have, and more. That being said, a number of mutual fund companies offer retirement specific mutual funds that focus on steady returns with low risk to provide retirees with a stable income. 

Retirement income portfolios provide a mix of stocks, bonds and cash for those investors already in or entering retirement. These portfolios tend to be managed to more of a conservative asset allocation strategy. These portfolios aim to provide investors with steady income throughout retirement. 

View the US News and World Report Retirement Income Mutual Fund Rankings. 


Mutual Fund Choices

Index funds are a type of mutual fund or Unit Investment Trust (UIT) that typically have an investment objective of matching the return of a particular market index, like the S&P 500 Composite Stock Price Index, the Russell 2000 Index, or the Wilshire 5000 Total Market Index.


Stock or equity funds invest in common stocks which represent a share of ownership or equity in publicly traded corporations.

Stock funds can be further classified by location focus, industry or sector focus, market capitalization, and investment style.

They account for about half of open-end fund assets
Money market funds have high liquidity. They invest in fixed income securities with a short period to maturity and high credit quality. Some investors will use money market funds in place of bank savings accounts. Money market funds aim to sustain their net asset value at $1.00 per share. This stops investors from experiencing capital gains or losses but they still earn interest income. Roughly a quarter of open-end fund assets. 

Closed-end Funds

​A closed-end fund is much less common than the open-end fund. Shares are generally only issued to the public when an initial public offering is made. After the IPO the shares can be traded on the stock exchange but investors who wish to pull out of the fund cannot sell back to the fund at NAV the way investors in an open-end fund can.

​In order to stop investing in the fund, the investor must sell his shares to another investor. The price may differ from net asset value. Like, an open-end fund, the closed-end fund has an investment manager who oversees the portfolio.  

unit investment trusts

​Unit investment trusts, or UIT’s near open-end funds in popularity.They only issue shares to the public at creation.They normally have a fixed lifespan,determined when they are created.

Investors who wish to redeem their investments have several options. They can wait till the pre-determined end-date, redeem with the fund at any time, or sell their shares on the market. The portfolio of securities is chosen when the UIT is formed and it does not change. Therefore, UITs do not have an investment manager overseeing the portfolio. 

exchange-traded funds

Exchange-traded funds, or ETFs have been growing in

popularity recently. They are not actually mutal funds but are often conflated with them. ETFs can be structured in a variety of ways. Most ETFs are index funds that share characteristics with both open-end funds and closed-end funds. In a perfect world, ETFs are traded on a stock exchange at a price that is close to its net asset value.  The fund manager may create or liquidate ETF shares throughout the trading day in order to keep the ETF market price close to the net asset value but this cannot be guaranteed.



Bond funds invest in fixed income or debt securities. They can be further classified by the type of bonds held or by the maturity of the bonds held. They can be also be classified by the location of the securities they hold. 

Some firms invest primarily in domestic securities, some firms invest in a mix, and some firms will focus on foreign securities. Account for about a quarter of open-end fund assets. 

types of mutual funds

Open-end Funds

An open-end fund is the most common type of mutual fund. What makes a mutual fund an open-end mutual fund is that it is required to buy back its shares from its investors at each day’s net asset value at the end of every business day.

The majority of open-end funds also sell shares priced at net asset value to the public when the trading floor is open. The fund is overseen by an investment manager who trades securities as he sees fit. No legal limit is placed on the volume of shares that can be issued.