Investing as a retiree is different from investing during the career years. Safety of principal and income production move to the forefront of investment requirements for those over 55. Most are no longer willing to take big risks with money and demand safety of principal. While there are no investments that are completely safe, some are certainly safer than others. So let’s take closer look at some of those investments that have become common for those over 55.
Perhaps the most popular of all senior investments is the Certificate of Deposit or CD. While relatively low paying, CDs are safe and provide a very predictable earnings stream. It’s important to make sure that your investment is below the FDIC insurance maximum for certainty of the principal. CDs can be purchased at your local bank, but watch for special promotions or ask the bank manager if the bank is offering any special deals for those over 55. You may be surprised!
Bond funds are perhaps the next most popular senior investment. Bond funds can provide solid income while maintaining greater safety than with other high yield investments. Government bond funds are the safest of all bond funds. Look carefully at the makeup of funds to be certain they aren’t too risky. Remember that the higher the yield of the fund, the greater the risk.
Investing directly with the Treasury is another popular method for seniors to grow their cash and earn an income. Going direct to TreasuryDirect.gov enables one to purchase Treasury Notes, Treasury Bonds and Savings Bonds without paying any commission to brokers. Government investments remain the safest of all investments.
Blue chip dividend paying stocks remain one of the top investments for seniors. If you don’t want to get into stock picking, many mutual funds made up of dividend paying stocks exist. Mutual funds provide professional management to the investors. However, some may feel secure building their own portfolio of dividend paying stocks.
