A 25-year-old who starts off their career and begins saving for retirement may consider riskier investments because they have more time to invest and are more tolerant to risk They can also afford to lose some money in the event that the market takes a dive because they still have time earn more money. This means they can invest in things like stocks and real estate.
A 45-year-old, on the other hand, doesn’t have a lot of time to put money away for retirement and would be better off with a conservative plan. They may consider investing in things like bonds, government securities, and other safe bets.
Meanwhile, someone saving for a vacation or home won’t have the same strategy as someone saving for retirement. They may be better off putting their money away in a savings account or a CD for short-term goals like these.