As we inch closer to retirement age, securing our retirement finances becomes a top priority. One of the toughest decisions we might make is where to keep our retirement money safe from market volatility, inflation and other risks. Unlike the savings account that we use for daily purchases, best retirement investmentsshould be thought of as an investment. In this blog post, we’ll share the safest places to put your retirement money.
1. Certificates of Deposit (CDs): CDs are a low-risk investment option ideal for conservative investors who prioritize a safe return on investment (ROI). These FDIC-insured CDs guarantee a fixed interest rate for a specific term. The interest rate depends upon the length of the CD term and some other factors. The best part is the choice of maturity period starting from 3 months to 10 years, so you can easily choose the CD term that fits your needs.
2. Money Market Accounts (MMAs): MMAs are similar to savings accounts. They provide a relatively higher return than your savings account, along with a higher interest rate than a checking account. MMAs are ideal for people who want to earn higher interest rates on their savings but don’t want to put their money in a high-risk investment. These accounts are FDIC-insured and provide the facility to write checks and withdraw cash, making them more flexible and accessible than CDs.
3. US Treasury Securities: US Treasury bonds are considered as one of the safest investments in the world. These bonds have low risk and can provide a predictable return on investment. The US Treasury securities are backed by the US government, so they are considered very safe. The only drawback is that they only offer lower interest rates than other investment options that entail greater risks.
4. Municipal Bonds: Municipal bonds or “munis” are fixed income securities that are issued by state and local governments. They are guaranteed by the issuing authority and offer a tax-free income. While targeting conservative investors, these bonds have low yields. However, it is important to note that due to the state and local nature of municipal bonds, some of them may be more volatile than others and require more research and analysis.
5. Annuities: Annuities are contracts between investors and insurance companies that offer a guaranteed income stream for a set period. Fixed-rate annuities guarantee a fixed rate of return while the variable rate annuities offer a more flexible approach. Annuities are backed by the insurance company but the returns rely on the financial strength of the issuer. However, if protecting your principal and having a fixed income stream as well is your top priority, then annuities are a good option to consider.
Retirement savings should be managed in such a way that they’re safe, secure, and growth-oriented. Certificates of deposit, money market accounts, US Treasury securities, municipal bonds, and annuities are among the safest choices to place your retirement funds. Each of these options has its own benefits and drawbacks, so you should consult a financial advisor to help you determine which one is appropriate for your individual retirement investment portfolio. Remember, investing in low-risk options may not generate the highest returns, but ultimately peace of mind is priceless when it comes to securing your retirement nest egg.