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Interest Versus Capital Gains Discussion

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In week 5, we had a discussion about retirement planning.  Let’s continue that discussion.  In order to achieve your savings goal for retirement, do you believe it is better to focus your investments in stocks, in bonds, or both?  Why?  Be sure to address the issues of interest versus capital gains, as well as the issue of risk.

Retirement Plan.

I plan to live in retirement for around twenty years. After I hit the age of 60, I do not plan to be working again but rather to be enjoying a life free of the hassle of daily waking and searching for a job. After retirement, I plan to buy a cottage so that I can move from the hustle and bustle of city life and lead a life that will be slower. Also there will be a little backyard where I can farm my own vegetables and keep a couple of animals. I estimate my annual income needs during my retirement years at $500 monthly totaling to $6000 annually. The cost of the cottage will of course offset the estimated amount during the first year.

In order to meet my retirement goals, I need to save not less than $200,000. If I were to save this amount, then it would be enough to cater for the expenditure that will be annually associated with retirement as well as to buy a fully furnished cottage. Saving this amount will thus create the assurance needed to ensure that in my retirement years, I will lead a comfortable life. At present, I have 40 working years. If I was to save $5000 dollars annually, it would be possible to achieve my goal. It is a mere $450 monthly thus making the goal one that is achievable.

My retirement plan is realistic. By the age of 60, most Americans are still working thus it following in a similar trend, I will still be able bodied enough at that age. It is however an appropriate age to retire because the body will be slowing down. Savings $450 monthly on my current salary is a feat that is possible. As such, I am assured that I will still be able to save the required amount and enjoy my retirement years. Other factors that should be considered when planning for retirement include the rate of inflation, the number of dependents that one will have and funds should also be set aside for medication and treatment (Reitzes & Mutran, 2016).


Reitzes, D. C., & Mutran, E. J. (2016). The transition to retirement: Stages and factors that influence retirement adjustment. The International Journal of Aging and Human Development, 59(1), 63-84.

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