So it's no wonder that retirement expert Tom Sightings sees them as a helpful tool for retirement investing. "Investing is so complicated," he notes in U.S. News & World Report.

 

"How do I make the time? No time? No expertise? No problem. Invest in stock and bond index funds. They usually do better than managed funds. Many financial institutions offer both mutual funds and exchange-traded funds that index stocks and bonds."

 

You might not get fabulously rich from these funds, but you will enjoy the same returns as the overall market, with less risk than if you buy individual stocks and bonds.

 

And there's an added bonus. "If you own an index fund, chances are you are diversified," Sightings explains.

 

To be sure, if you have a 401(k) plan, he warns against investing too heavily in your own company's stock. That's because you don't want to be excessively dependent on your company.

 

Meanwhile, John Waggoner of USA Today explains that three crucial factors when you're searching for retirement investments are safety, dividends and expenses. He lists several funds that shine in those areas.

 

Waggoner lists several funds that shine in those areas and should be included in a retirement portfolio.

The first is the Vanguard Target Retirement Income (VTINX). This is a fund of funds designed as an all-in-one solution for retirees who want to see both their principal and income increase, he writes. The fund allocates 65 percent of assets to bonds and 20 percent to U.S. stocks.

The fund has produced an average annual return of 5.6 percent in the past three years, sports a yield of 1.8 percent and has an expense ratio of 0.16 percent.

The second fund Waggoner likes is the Schwab U.S. Dividend Equity ETF (SCHD). "If you're looking for a portfolio of large-company stocks with a long history of raising dividends, this is the fund for you," Waggoner writes. "The fund's criteria looks not only for high dividends, but high-quality earnings and balance sheets as well." The fund has generated an average annual return of 16.5 percent over the past three years and has a yield of 2.6 percent.

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