5 Low-Risk Investment Options for Retirees

5 Low-Risk Investment Options for Retirees

Retirement should be a time where your only cares are what leisurely activity you want to try for the day. Unfortunately for retirees, it often doesn’t come that easy. Census statistics show that half of older adults in the United States received less than $25,601 in yearly income from all sources. That amounts to less than the general amount that the average senior American spends per annum. In order to ensure that your retirement remains comfortable and secure for the years to come, consider investing in options that won’t risk your entire nest fund.

Below are some considerably low-risk options you can take on.

Fixed Annuities

Annuities are a solid financial product to invest in because you can purchase them using a lump sum or by way of split payments. Getting a fixed annuity ensures that you will have an established source of income to rely on, depending on the time period you’ve allotted for.

This specifically caters to retirees and generally poses little risk beyond possibly outliving your assets. The main concerns would be choosing the right insurance provider, making sure your monthly income will work in the event of inflation and getting a good interest rate.

Exchange Traded Funds (ETF)

The main benefit of ETFs is that they are much less volatile than stocks, though many traders prefer the latter because they yield higher returns. This option is a good retirement option mainly because it can be slow and steady. Consider value and liquidity when assessing your options in this category. A good place to start would be gold ETFs, since they are considered a safe haven investment because they maintain their value even when there is economic instability.

Getting a gold ETF is a more practical option over buying actual gold, mostly because you would need much more physical space and security for the latter. One of the only inherent risks of ETFs are if the price drops down to zero because the shares lose all value, hence it is good to pick assets like gold where that is a near-impossible occurrence.

High-yield Savings

The difference between a traditional savings account and these are that high-yield accounts have a higher interest rate. That means your money will grow at a quicker rate, even if your money just sits there. This investment option is one of the easier routes with almost no risk whatsoever since your saved money stays put and won’t be dependent on any fluctuation. The only thing affected is the rate of growth, as long as you are able to maintain the minimum balance for your account.

It’s also a good idea to make sure you iron out withdrawal limits and annual yields before picking the bank you open this account with.

Savings Bonds

Savings bonds are considered a much safer option to volatile stocks. Even if they also get affected by fluctuation, the impact is not as severe. This is especially important to consider when the economy is faced with uncertainty. Government savings bonds are among the lowest risk variations you can invest in, and in the event of a recession, are much less likely to wipe out your portfolio than stocks.

Bonds may not grow as much in a recession, but they are still a viable cushion.

Corporate Bonds

This option is arguably riskier than the previous option, but overall does not pose much of a danger in terms of financial peril. In exchange for their higher risk, though, they also have higher interest rates. In the end, it’s still a safer option for retirees that want to invest in trading without the anxiety of the stock market. Learning more about capital protection and short-term arrangements may help make this an even safer bet.

By taking on some smart investments and practicing good saving habits, seniors can live out their retirement in relative comfort.

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