Safest Investments for Retirement in 2025
Written by
Rudri Patel
Edited by
Joe Evans
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If you’re planning your golden years and wondering where to keep your money safe, the safest investments for retirement are those that protect your principal, deliver stable income and keep pace with inflation — even when markets get bumpy.
These days, retirees have more options than they did a few years ago. With CD yields around 4.3%, Treasury bills near 3.9%, and I Bonds paying 4.03%, safety no longer means settling for tiny returns.
These vehicles help you preserve wealth while earning enough to outpace inflation, which is holding around 3% year-over-year as of fall 2025.
Quick Facts: Safe Retirement Investments in 2025
- Top 1-year CDs average about 4.3% APY, per FDIC-insured institutions.
- 3-month Treasury bills yield roughly 3.9% as of November 2025.
- Inflation has cooled to about 3%, giving savers positive “real” returns for the first time in years.
- Series I Bonds pay 4.03% for new issues (Nov 2025 to Apr 2026).
- FDIC insurance covers up to $250,000 per depositor, per bank, per ownership category, ensuring your cash is protected.
Why Safety Matters in Retirement
Once you start living off your savings, protecting what you’ve earned becomes more important than chasing big gains.
| Concept | What It Means for Retirees | Quick Takeaway |
|---|---|---|
| The Shift From Growth to Preservation | You’re no longer focused on aggressive investing. Now it’s about protecting principal and creating a reliable income. | Think stability over speed. Consistent returns matter more than big wins. |
| How Market Volatility Hits Retirees Harder | A 10% market drop can hurt more in retirement because withdrawals lock in losses and reduce future growth potential. | Avoid having too much in volatile assets once withdrawals begin. |
| The Role of Fixed Income | Bonds, CDs and Treasurys provide steady, predictable “paychecks” that complement Social Security and pensions. | Reliable income = financial peace of mind. |
Key Stat: Roughly 61% of retirees say market volatility is their top financial concern, according to LIMRA data, highlighting the shift from growth to security.
Top 7 Safest Investments for Retirement in 2025
Here’s a breakdown of low-risk, income-generating investments that can help safeguard your retirement portfolio this year:
1. U.S. Treasury Bills and Bonds
Why they’re safe: Treasurys are backed by the U.S. government, making them virtually risk-free.
- 3-month Treasury yields hover around 3.9%, a solid return for such low risk.
- Pros: Backed by the government, highly liquid, tax-advantaged at the state level.
- Cons: Lower yields than riskier assets.
- Best for: Retirees who value stability and guaranteed repayment.
2. Certificates of Deposit (CDs)
What to know: Bank CDs are FDIC-insured up to $250,000 per depositor, per bank, and top one-year CDs now pay around 4.3% APY.
- Pros: Principal protection, guaranteed returns, flexible maturities.
- Cons: Early-withdrawal penalties; rates may lag inflation over long periods.
- Best for: Savers who don’t need immediate access to cash.
3. Fixed Annuities
What to know: Insurance products that exchange a lump sum for steady payments over time.
- Pros: Guaranteed income, often higher yields than CDs, predictable returns.
- Cons: Not FDIC-insured; funds can be locked for several years.
- Best for: Retirees who want to create a personal pension or supplement Social Security.
4. Money Market Accounts and Funds
What to know: Money market accounts (MMAs) are FDIC-insured; funds are not, but invest in high-grade short-term debt.
- Pros: Liquid, convenient, and often pay interest comparable to short-term CDs.
- Cons: Fund yields fluctuate; some accounts require high minimums.
- Best for: Emergency savings or money you plan to spend in the next year.
5. High-Yield Savings Accounts (HYSAs)
What to know: Online banks often offer rates above 4% APY, far higher than traditional savings accounts.
- Pros: Easy transfers, insured deposits, no penalties.
- Cons: Rates can change; some withdrawal limits apply.
- Best for: Short-term needs or building a cash buffer for expenses.
6. Series I Savings Bonds (Inflation-Protected)
What to know: The Treasury’s I Bonds currently earn 4.03%, adjusting every six months with inflation.
- Pros: Inflation protection, tax-deferred growth, backed by the government.
- Cons: Must hold for at least one year; early redemptions lose three months’ interest.
- Best for: Long-term savers who want inflation-linked protection.
7. Short-Term Bond Funds and ETFs
What to know: These funds invest in high-quality, short-duration bonds for higher yields with minimal volatility.
- Pros: Flexible, higher returns than savings accounts, easy to sell anytime.
- Cons: Market risk; not insured.
- Best for: Investors seeking modest returns without committing to long lockups.
Risk vs. Return: Safe Doesn’t Mean Stagnant
| Investment Type | Typical Return (2025) | Liquidity | Principal Protection |
|---|---|---|---|
| Treasury Bills | ~3.9% | High | Yes |
| CDs | 4.3% | Medium | Yes (FDIC-insured) |
| Money Market | 4% | High | Yes |
| I Bonds | 4.03% | Low (12-month hold) | Yes |
| Short-Term Bond ETFs | 4-5% | High | Partial |
| Dividend Stocks | 3-4% yield + growth | Medium | No |
Did You Know? According to the Federal Reserve, U.S. households now hold over $6 trillion in money market funds — a sign that retirees are prioritizing safety and liquidity in 2025.
How to Build a Conservative Retirement Portfolio
A balanced, low-volatility portfolio combines income, liquidity and inflation protection.
| Investor Type | Portfolio Allocation | Goal |
|---|---|---|
| Conservative | 40% Treasurys & bonds • 30% CDs • 20% cash • 10% I Bonds | Preserve principal and generate stable income. |
| Moderate Income | 35% bonds • 25% CDs • 20% dividend stocks • 10% REITs • 10% cash | Blend income with modest growth. |
| Cautious Growth | 30% bonds • 20% CDs • 25% dividend stocks • 15% short-term ETFs • 10% I Bonds | Hedge inflation while maintaining stability. |
Tip: Rebalance your mix once a year. Even safe investments need tune-ups to match your income needs and market changes.
Current Rates and Inflation: What Retirees Should Know
| Category | Current Level | Why It Matters |
|---|---|---|
| 1-Year CD Average | ~4.3% APY | Strong yields make CDs competitive again for retirees. |
| 3-Month Treasury Bill | ~3.9% | Great short-term cash option with government backing. |
| Inflation (YoY, Sept 2025) | ~3% | Still above the Fed’s 2% target — keep some inflation-protected assets. |
| Series I Bond Rate | 4.03% | Adjusts every 6 months with inflation — protects purchasing power. |
| Fed Funds Rate | 4.75%-5.00% | Determines CD, Treasury, and money market yields. |
Did You Know? The share of retirees receiving income from interest, dividends or rental income rose from 43% to 50% in 2024, according to reports by the Federal Reserve Board on the economic well-being of U.S. households.
How Inflation-Protected Securities Work
Treasury Inflation-Protected Securities (TIPS) and I Bonds automatically adjust with inflation, helping preserve real purchasing power over time.
| Mistake | Why It’s Risky | Smarter Move |
|---|---|---|
| Chasing High Yields | Uninsured products can expose you to losses. | Stick with FDIC/NCUA-insured or government-backed options. |
| Putting Everything in One Asset | Lack of diversification limits flexibility and income potential. | Mix CDs, Treasurys, and inflation-protected bonds. |
| Locking In Too Early | Rates can rise, leaving your money stuck. | Use CD ladders or T-bill ladders for flexibility. |
When to Work With a Professional
| Scenario | When to Get Advice | Who to Talk To |
|---|---|---|
| Complex or multiple retirement accounts | When juggling assets across banks or brokers | CFP® or CPA/PFS fiduciary |
| Tax-heavy withdrawals or RMD planning | When optimizing income vs. taxes | Retirement tax advisor |
| Income uncertainty | When unsure how to balance “safe” vs. “growth” | Fee-only financial planner |
Key Stat: A 2024 Vanguard study found that retirees working with fiduciary advisors saw up to 3% higher annual returns through better allocation and withdrawal strategies — without taking on more risk.
Final Take to GO: The Safest Investments for Retirement in 2025
The safest investments for retirement in 2025 are the ones that protect your savings while still delivering steady income — Treasurys, CDs, high-yield savings, I Bonds and short-term bond funds top that list. With inflation moderating and yields higher than they’ve been in years, you don’t have to choose between safety and return anymore.
Build a diversified, conservative retirement portfolio that keeps you flexible, liquid and financially confident no matter how the market moves.
Next Step: Try the GoBankingRates retirement calculator to see how safe investments can strengthen your income plan.
FAQs: Safe Investments for Retirement
Here are the answers to some of the most frequently asked questions about safe retirement investments and how they work:- What is the safest investment with the highest return in 2025?
- U.S. Treasurys and FDIC-insured CDs are the safest options. Top 1-year CDs pay around 4.3%, and Treasury yields are about 3.9%.
- Are CDs safer than bonds?
- Yes, because CDs are FDIC-insured up to $250,000, while most bonds carry market risk.
- How much of my portfolio should be in safe assets at 60?
- Many retirees keep 60% to 80% of their portfolio in safe assets like bonds, CDs and savings, reserving the rest for growth.
- Are annuities safe for retirement income?
- Fixed annuities can provide guaranteed income if issued by a strong insurer. Always check credit ratings before buying.
- What’s the best safe investment for a monthly income?
- Fixed annuities, Treasury ladders and short-term bond funds can provide dependable monthly payouts.
Information is accurate as of Nov. 7, 2025.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- Vanguard "Celebrating Vanguard Advisor’s Alpha: Clients and their advisors thriving together for 25 years"
- U.S. Federal Reserve "Report on the Economic Well-Being of U.S. Households in 2024 - May 2025"
- Office of Financial Research "U.S. Money Market Funds Reach $6.4 Trillion at End of 2023"
- FDIC "Deposit Insurance at a Glance"
- LIMRA "A Lesson for Americans Thinking About Retirement: It Isn't Always Your Decision"
