Which of the following strategies can help an individual save for retirement more effectively?

Maximizing contributions to retirement accounts is a fundamental strategy for effective retirement savings. It allows individuals to take advantage of tax benefits and potential employer matching contributions, depending on the type of retirement account. For instance, contributions to accounts like a 401(k) or IRA can be made pre-tax, reducing taxable income and allowing assets to grow tax-deferred until withdrawal, typically in retirement. This strategy not only increases the amount of money saved but also maximizes the potential for compound growth over time, which can significantly enhance the overall retirement savings.

In contrast, investing primarily in high-risk stocks may lead to higher potential returns, but it also comes with a greater risk of loss and can contribute to volatility that jeopardizes the stability of retirement savings. Avoiding any investment risks completely could result in missed growth opportunities, failing to keep pace with inflation or market growth, which could diminish purchasing power in retirement. Investing in consumer goods does not necessarily align with strategies for long-term growth or capital appreciation; it is typically better to focus on investments that are tailored to build wealth over time, particularly for retirement.