Low-risk investments and guaranteed growth savings options are the safest place to deposit your retirement funds. Sure, there are plenty of places you can put your retirement savings to protect you from a potential stock market setback. You can transfer it to cash equivalents, such as a money market fund, an FDIC-insured savings account, or certificates of deposit (CD). Some investors have even flocked to gold lately as a haven for uncertain times.
The challenge with low-risk investments is that rising inflation can erode their value over time. To counter this, you should consider putting your money into Inflation-Protected Treasury Securities (TIPS). They are government bonds that reflect the rise and fall of inflation. Not only are they a safe investment, but they help you diversify your future retirement income. When you retire, you'll need to generate enough income to sustain your lifestyle without exposing your assets to excessive risk.
There are a few ways retirees earn income, such as 401 (k) or 403 (b) retirement savings accounts, social security payments, a key source of cash, and some retirees are lucky enough to have a defined benefit pension, an increasingly rare type of plan that pays like clockwork. Here are 10 other ways to earn a reliable income while keeping risk under control when you retire: life insurance policies such as whole life or universal life; leveraging your home's equity through selling the home or applying for a home equity loan, line of credit, or reverse mortgage; FDIC-insured bank accounts and certificates of deposit (CDs); investing in dividend stocks; investing in real estate; investing in mutual funds; investing in exchange-traded funds (ETFs); investing in bonds; investing in annuities; and investing in alternative investments. The great thing about these 10 options is that they can be mixed and combined to suit your income and risk tolerance needs. Getting the right combination can be a little tricky, so don't hesitate to consult a qualified financial professional for guidance. As we mentioned, we believe that the safest place for retirement savings can be a combination of low-risk and high-risk accounts. Strictly speaking, the safest place for your retirement income is fixed-interest accounts, such as a savings account, treasury securities, money markets, fixed annuities, and certificates of deposit (CD). However, keep in mind that, despite being a safer option with low risk of loss, these investment vehicles also offer few opportunities for growth.
