I would go with the Roth IRA and the degree.
Roth IRA: Especially given the 30 year timeframe, tax-free growth in the IRA would be my first choice, and have the IRA in an equity allocation with blue chip dividend payers and setup for reinvestment.
Mutual funds: The expense ratio slowly eats away at your returns so the longer you hold, the less likely you will beat the market over the extended period of time.
Annuities: Never been a big fan, but you might find a viable one that fits your needs. I just avoid as it is some deal of work parsing the good from the bad.
Real estate: Being a landlord is not something I am too keen on. It is also not a very liquid asset so if you are unlunky enough to be retiring during a downturn, you could lose substantial value. For retirement, I dont like things that are timing-dependent.
Municipal bonds: Interest rates are not very attractive right now and until the fallout from the coming wave of municipal backruptcies completes and we see how the courts rule on the haircut bond-holders take, I would avoid.
Charitable contributions: Not sure how this would be an investment vehicle as there is no monetary gain (just the tax deduction and the feeling of doing something good).
CDs: Better off with a good dividend paying stock or even a AA or AAA bond. Banks rarely pay a good rate on CD's compared to other investments.
Starting a new business: Normally a great idea but for retirment, you are betting the business is a success. The majority of new businesses fail, and many never turn a reasonalbe profit to retire from.
Precious metals: You are too beholden to market conditions here. Although I think owning silver and gold is good (5%-10% of assets) they are more of a hedge than a retirement plan. Silver was great to buy when it was below 10/oz but you would be hurting if you bought it in the 40's. Too timing-dependent to be in the top 2 your question requested.
Getting a new or advanced educational degree: Given that you have 35 years, and the complete lack of skilled workers in the US, getting the necessary in-demand skills could provide you with a good paying job and a good job is the single best method to save for retirement.
Hope this helps.
After ensuring all her debt is paid off I would advise:
- $15-20k of cash into a money market account as an emergency fund
- 10% as a charitable contribution
- 75% of money into a diversified mix of mutual funds within a Roth IRA
- the rest towards paid-for real estate to rent/lease
CDs are worthless, government bonds would never keep up with inflation, annuities are too expensive, and precious metals are too risky. Starting a business or going back to school are completely subjective based on her abilities, preferences, gifts, & talents.
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35 - as the others have said - EXCEPT i would put 10% into 2 real estate properties. Over 30 years rental they will have produced a significant and ongoing income, this could be used to build up other investments increasing revenue even further.
The client has 1 million dollars. I would ask him for his financial wisdom so I could get a million dollars
Some of these financial advisor dont know what they are doing with their own money.
Take Care
Stocks.
A 35 year-old client comes into your office and asks for advice on how to invest $1,000,000 cash for retirement at 65. ($1 million is in a lump sum.) In view of the current economy and recent projections offered in the financial news, choose two investment vehicles that might best serve this client. Consider the following financial tools: Roth IRA, mutual funds, annuities, real estate, municipal bonds, charitable contributions, CDs, starting a new business, precious metals, and getting a new or advanced educational degree.
