The Wells Fargo Investment Institute warned retail investors Tuesday against over relying on bonds for funding retirement.

“It is critical your assets grow faster than the price of goods and services during your retirement years. Cash and short-term bonds may not be capable of insulating your portfolio against the eroding power of inflation,” the Institute said in a new report, “Living Longer, Living Better."

In another cautionary note, the institute said a well-diversified portfolio including an allocation to income-producing assets beyond U.S. Treasuries and high-quality corporate bonds, may be necessary to fund expenses.

The report warned there may be disappointing income streams for years from traditionally conservative investment such as bonds as low interest rates continue.

For investments that can keep up with or beat inflation, the institute recommended investors look at commodities, global stocks and real estate.

Wells, however, was more positive on bonds for the wealthy.

“This group may choose to hold bonds in their retirement accounts to help stabilize the account value,” the report said.

On another topic related to retirement investing, Wells pointed out that the longer people live, more will be contracting chronic diseases.

“Pharmaceutical and biotechnology companies should benefit from longevity and more people living with manageable ailments,” the Institute said.

Real estate investment trusts that invest in medical office buildings were cited as another sector that could benefit from the aging of the population.

However, Wells warned the full impact of these developments in aging and health care may not be felt for years.