Final answer:
Jocelyn must consider her expected rate of return to ensure sufficient retirement income, balancing risk and return. Diversification is key, with a mix of stocks, bonds, savings accounts, and annuities likely forming her portfolio.
Step-by-step explanation:
For Jocelyn to ensure she has sufficient income during retirement, it's crucial to consider her expected rate of return on investments. This rate of return influences how her savings and investments will grow over time, impacting her ability to accumulate enough funds to meet her financial needs in old age.
In deciding on the type of investments, Jocelyn should look for a balance between risk and return. Stocks and shares may offer high returns but come with higher volatility. Bonds provide regular income and are usually less volatile than stocks, representing a moderate risk. Savings accounts offer low risk but also lower returns. Annuities are considered safe with fixed payouts, making them predictable but potentially providing lower total income compared to riskier investments. It is often recommended to have a diversified portfolio to balance the risk and secure financial stability for retirement.
Ultimately, the best investments for Jocelyn will be those that align with her risk tolerance, investment timeline, and retirement goals while considering the expected rate of return.