Experts: 7 Safest Places To Keep Your Retirement Savings
Whether you are approaching retirement age or are decades away, you need to be thinking about the safest places to stash your cash. Too many times retirees are left empty-handed because they put all of their savings into a risky investment or failed to ensure that they had the risk tolerance to absorb market volatility.
We asked experts to weigh in on the safest places to keep your retirement money. Here are seven lower-risk options that will keep your retirement money safe for the long haul.
FDIC-Insured High Yield Savings Account
Most of our experts agree that one of the safest places to keep your money is in a savings account insured by the Federal Deposit Insurance Corporation (FDIC).
“High-yield savings accounts are an excellent option for those looking to keep their retirement savings safe. These accounts offer FDIC insurance up to $250,000 per depositor, and often come with competitive interest rates, allowing your investments to grow over time. Plus, they are easy to access in case you need to withdraw funds for retirement or other needs,” said Patrick Grayson, real estate expert with Paramount Property Buyers.
Another safe place where you can stash your cash is in a fixed annuity. “An annuity is a financial product that provides regular payments in exchange for an upfront lump sum, typically contributed by the investor. While investing in annuities carries some risks, they can be an attractive option for those looking for safe places to keep their retirement funds. Annuities provide a guaranteed rate of return, meaning your savings will not be subject to market volatility,” Grayson said.
US Treasury Securities
Individuals should consider looking into US Treasury Securities to keep their retirement money safe, said Linda Chavez, founder and CEO of Seniors Life Insurance Finder. “U.S Treasury securities are considered the safest investment option, as they are backed by the full faith and credit of the U.S government. These investments come in several forms such as savings bonds, treasury notes, treasury bills, and more,” Chavez said.
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Employer-Sponsored Retirement Plan
Chavez also recommends people take advantage of their employer-sponsored retirement plans. “If you have access to an employer-sponsored retirement plan, such as a 401(k) or 403(b), this is a great way to keep your retirement savings safe. These plans are often administered by third-party providers and guarantee certain protections for your money,” she said.
Individual Retirement Accounts (IRAs)
Retirees should consider “keeping some of your retirement savings in an individual retirement account (IRA). An IRA is a personal savings vehicle, and you can choose between traditional and Roth IRAs,” said Jason Skinrood, a senior finance expert and loan officer with over 19 years of experience in the industry.
He added, “Traditional IRAs are funded with pre-tax contributions, so you can deduct them from your taxes for the year. On the other hand, Roth IRAs are funded with after-tax contributions and offer tax-free growth on your investments. Both types of accounts have their own set of benefits and drawbacks, so it’s important to understand which is right for you before making a decision. Think of them as a complement to your employer-sponsored plan, since they offer different tax benefits.”
Money Market Accounts
“Money market accounts are relatively low-risk investments that offer higher interest rates than regular savings accounts. These accounts are FDIC-insured up to $250,000 per person, so your money is relatively safe,” Chavez said.
Low-Cost Index Funds
One other option for your money is a low-cost index fund. Skinrood said, “Index funds are a type of mutual fund that tracks a specific market index, such as the S&P 500. They offer a diversified portfolio of stocks or bonds, which helps to reduce risk.”
He adfded, “Low-cost index funds are particularly attractive because they have low fees and expenses, which means that more of your money is working for you. Over the long term, low-cost index funds have historically provided solid returns and are a great way to build wealth for retirement.”
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