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Low-Risk Retirement Strategies


Looking to retire soon and want to invest in an account that provides a good level of security while generating high amounts of income at the same time? We’ll take a look at relatively safe, high-yield investments that you can explore in today’s market. Just remember, there’s so such thing as a safe investment, so any decision you make will come with its fair share of risk OR it won’t pay big rewards.

You may lull yourself into thinking risk isn’t there, but it’s always lurking in the shadows. That said, check these out.

Treasury Bills and Money Market Funds

If you’re looking for something that won’t put your principal or earnings at risk plus allow you to get to your cash without taking a hit, you might want to try treasury bills and money-market funds. They’re considered safe but you won’t get much more than 0.01% back. Do your research on the higher-paying FDIC-insured savings accounts, money markets and CDs over the short term. Again, these don’t pay off more than one percent either. Rewards checking accounts may give you slightly more but you’re often limited to what you can keep in it.

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Short-Term Bond Funds and Dividend-Paying Stocks

Some may not consider these very low-risk, but others do, so we’ll talk about them here. They feature higher yields but don’t give investors the security of principal and earnings as cash equivalents, says CNN Money. Investors can lose money with those bond funds when interest rates go up. When it comes to dividend stocks, their values will fluctuate with the market as other types of stocks do, so you’re taking on some degree of risk.

In fact, stocks and bonds are a critical part of your investment strategy, perhaps more so than your lower-risk ones. If retirement is a long way off, this is surely the way to go. Even if retirement is coming up quick, you’re not going to need access to the whole lump sum; you’ll likely take out what you need when you need it annually. It’s best to keep a year or two worth of safe investments handy so you can tap into it if necessary. The rest in a mix of stocks and bonds will do just fine.

You’ll probably have a stock broker to manage your portfolio, which is great to have a professional keep track of everything. However, don’t get too complacent and rely on them for everything. Not all brokers act in your best interests, so just in case, keep the number of a securities fraud attorney on hand at all times.

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