Final answer:
Alex should create an investment plan tailored to his risk tolerance and financial goals, which includes selecting investment vehicles such as stocks, bonds, and annuities, and can benefit from tax-advantaged plans like a 401(k) or 403(b). Hence, the correct answer is option (3).
Step-by-step explanation:
Alex needs to set up an investment plan to achieve his financial goals and invest money based on his risk tolerance. An investment plan involves setting goals, determining the appropriate level of risk, and selecting a suitable mix of investment vehicles such as stocks, bonds, and annuities. While insurance plans protect against loss and savings plans are for accumulating wealth over time with lower risk, an investment plan is specifically tailored to grow wealth based on individual risk preferences.
Additionally, plans like 401(k)s and 403(b)s are defined contribution retirement plans that offer tax advantages and are portable, allowing for investment into various financial instruments that can generate real rates of return, helpful in mitigating the impact of inflation during retirement.