I just turned 40 and I have been watching the market continue to decline through COVID and I’m worried about running out of money in retirement now. I still have some time to get there but many studies have shown that those about to enter or just entered retirement are worried about running out of money in retirement. When we continue to see the interest rate risk continue to go up and high growth stocks continue to decline, it’s important to think about the other alternatives.
Let’s get into some of the safe investment options but remember that nothing is a guaranteed thing. All investments are going to have risk but as you’re doing your retirement planning or looking for how to minimize market risk, here are a few options for you to consider.
A gold IRA is an individual retirement account that allows you to hold physical gold in your portfolio. This is a way to invest in gold without having to worry about the risks associated with buying and holding gold outright.
There are a lot of benefits of having a gold IRA but one of the main ones is that it’s a way to protect your wealth. Gold has always been seen as a safe haven asset and it’s often one of the first things that people think about when the market is in decline.
Another benefit of having a gold IRA is that it can help to diversify your portfolio. When you have a mix of assets, it can help to protect you from market volatility. Gold is often seen as a good investment to have in your portfolio during times of economic uncertainty.
If you’re looking for an alternative to the traditional stock market, a gold IRA is worth considering. It’s important to do your research and make sure that you’re working with a reputable company because there are plenty of gold IRA scams out there.
As I’ve entered the second stage of my life, I’ve seen quite a bit of the cycles in 2000 with the dotcom bust, 2007 real estate cycle and then whatever we’re about to enter in 2023 – it’s a bit scary to think about. I continue to look back to gold as a viable option because it continues to go up and to the right and somehow can help those with a low risk tolerance and wanting to find a way to diversity their retirement income and portfolio.
Money Market Accounts
A money market account is a type of savings account that typically offers a higher interest rate than a traditional savings account. The interest rate on a money market account is usually based on the current market conditions.
Money market accounts are FDIC insured, which means that your money is safe in the event of a bank failure. This makes them a very safe investment.
Money market accounts can be a good option for those who are looking for a safe place to save their money. However, the interest rate on these accounts is often very low. This can make them a less attractive option for those who are looking to grow their money.
If you’re looking for a safe investment with a higher interest rate, a money market account is worth considering. Just be sure to do your research and compare the interest rates of different accounts before you decide where to open one. Some of the examples Iv’e seen are Vanguard Money Market Fund, or the Schwab Money Market options. There are others but if you’re looking for a few to start with – these are great.
Treasury Bills, Notes and Bonds
Treasury bills, notes and bonds are all debt securities that are issued by the US government. These securities are considered to be very safe investments because they are backed by the full faith and credit of the US government.
Treasury bills have a short-term maturity, while treasury notes have a medium-term maturity. Treasury bonds have a long-term maturity.
The interest rate on these securities is usually lower than the interest rate on other types of debt securities. However, they are still considered to be very safe investments.
Treasury bills, notes and bonds can be a good option for those who are looking for a safe place to invest their money. It’s not the sexiest option but if you’re just looking for a safe place – this is one of those.
Treasury Inflation-Protected Securities
If you’re worried about inflation like most of us are these days, I’d highly recommend taking a look at the Treasury Inflation Protected Securities that Vanguard has setup. If you read through their Fund Prospectus you’ll see on Page 4 that about 80% of the fund is invested into inflation indexed bonds backed by the US government. If you are worried about going direct to the money market funds or having a long term fixed interest rate that looks like will never stop going up – I would consider this.
This is one of the investments for seniors that makes a lot of sense because it’s backed by the US government and it’s a Vanguard product which typically means they know what they are doing. This isn’t going to one of the dividend paying stocks but your financial advisor is going to love you for picking up something that is inflation protected since it feels like the CPI (Consumer Price Index) is going to continue to head up and we don’t have an end in sight.
By getting setup with this, your purchasing power may not sky rocket but you’ll be protected and it’s one where your retirement savings will love you for it and it should be part of an investing strategy as we go into this extremely high inflation period. We haven’t had this type of inflation since 1982 and it feels like we’re just at the tipping point so this will give you a piece of your investing strategy and personal finance plan to make sure you have minimal risk.
High Yield Savings Accounts
A high yield savings account sounds boring but it’s important for a guaranteed income stream. It’s not really income but depending on the size of what’s in your savings account and having the FDIC insure up to $100,000 or $250,000 depending on the type of account – you’ll be happy you have this as one of your bank accounts. It will be an interest bearing account so make sure you have the right financial status to use this and that you’re not going to end up paying some crazy monthly fees to set it up.
If you can get a good checking account that’s tied to a high yield savings account you’ll be in the right place for one of the best investments for seniors.
Real Estate Investment Trusts (REITs)
There are many options here but I always go to CrowdStreet. I live in Oregon and it’s based out of Portland, Oregon where it’s backed by the Bend, Oregon VC firm. You’ll be able to get some consistent income and potential some cash dividends based on how they’ve setup this investment trust. With the new tax laws, it’s more favorable to have something like this as part of your real estate portfolio.
I would consider a minimum of $1,000 to get started with one of their programs and if you want to go bigger you can always do that too but I think $1,000 is a good place to get started with low risk. It’s not one of the many mutual funds or the federal deposit insurance corporation but it sure does work well.
Fractional Ownership (Art, Whiskey, Wine)
This is an interesting one and I’m not sure if it’s for everyone but if you’re into art, whiskey or wine – this could be a fun way to get started. With the new tax laws, it’s more favorable to have something like this as part of your investment portfolio. There are companies like Masterworks.io where you can buy up a piece of a Picasso and they will do all the hard work of storing it and revaluing it year after year. This is not going to be a savings account where you’ll have the ability to pull cash out quickly but art is typically the best place to go when thinking about fractional ownership.
There are scams here too so be careful when investing in art and go with the tried and true partner of Masterworks.
Why should seniors invest their money?
There are a few reasons why seniors should invest their money. The first reason is that it can help them keep up with inflation. With inflation, the prices of goods and services go up over time. This means that a senior’s purchasing power can go down if they don’t invest.
Another reason why seniors should invest is that it can provide them with a source of income in retirement. Many seniors rely on Social Security, which may not be enough to cover all of their expenses. Investing can help supplement their income and make retirement more affordable.
Finally, investing can help seniors leave a legacy for their family or favorite causes. If a senior has money invested, they can choose to leave it to their loved ones when they pass away. This can be a great way to help out family members or charitable organizations that are important to them.
Investing is a smart choice for seniors, and there are a variety of different ways to do it. By diversifying their portfolio and investing in a number of different things – you’ll be happy you’ve diversified it.
Where should I put my 401(k) money after retirement?
There are a few different options for what to do with your 401(k) after you retire. One option is to leave the money in the account and continue to let it grow. This can be a good choice if you don’t need the money right away and you want to let it continue to grow.
Another option is to roll the money over into an IRA. This can be a good choice if you want to have more control over how the money is invested. It can also be a good choice if you want to take advantage of different tax benefits that come with an IRA. You could roll this into a gold IRA too like we talked about before but you don’t have to.
Finally, you could cash out your 401(k). This is an option but typically there are penalties so make sure you understand all the options.
What investments should seniors have in their investment portfolio?
There are a few different types of investments that seniors should consider having in their portfolio. One type of investment is bonds. Bonds are a good choice for seniors because they tend to be less volatile than stocks and can provide a steadier stream of income.
Another type of investment seniors should consider is dividend-paying stocks. These are stocks that pay out regular dividends, which can provide a source of income during retirement.
Additionally, seniors should consider having some cash in their portfolio. This can be used to cover unexpected expenses or to take advantage of opportunities that come up.
Seniors should have a diversified portfolio that includes a mix of different types of investments.
What investments should seniors avoid?
You should avoid high risk investments like Bitcoin or any other crypto currency. These are highly volatile and you could lose a lot of money if you invest in them.
You should also avoid any investment that you don’t understand. If you don’t know how an investment works, you could end up losing money on it.
Finally, you should avoid any investment that has high fees. The last thing you need is to pay fees all the time on your investments that you’re trying to save – not spend!
Safe Investments for Seniors FAQ
The safest investment for seniors is typically going to be something that is less volatile, such as bonds. However, it is important to diversify your portfolio so that you don’t have all of your eggs in one basket. This way, if one investment goes down, you won’t lose everything.
A 65 year old senior should invest in a mix of different things, including bonds, dividend-paying stocks, and cash. This will help to diversify their portfolio and provide them with a steadier stream of income.
You don’t necessarily need a financial advisor after you turn 65. However, it can be helpful to have someone to help you with your investments and make sure that you are on track for retirement.
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