After decades in the workforce, retirement is a time to relax and enjoy the rest of your life. However, with no salary coming in, one has to use their money wisely to ensure they can handle emergencies, survive inflation, and take care of themselves until they are no more. Here is a list of 10 great ways retirees can save their money.
High-Yield Savings Accounts
These savings accounts are easily one of the best options for retirees. One advantage is that the retiree makes more money through high interest rates, and another is that the money isn’t tied down long-term, so they can always access it. Emergencies can arise anytime, and this option ensures retirees are not stranded.
Certificates of Deposit (CDs)
Two major differences between Certificates of deposit and savings are that they are time-bound, and their interest rates are typically higher. The high interest rates provide a shield from inflation, and since withdrawing the funds before maturity would attract penalties, retirees should save money they won’t need for a while here.
Treasury Bonds or Bills
Investing in treasury bills and bonds is like lending the government some money, and you can bet they will surely pay you back. Bills are like short-term loans as they mature in four to fifty-two weeks. On the other hand, bonds are for those who want something more long-term, as they run longer than a year.
Dividend-Paying Stocks
Many retirees will find several advantages in investing in companies that pay dividends through stocks. First, there is the possibility of stock appreciation, which will make the investor richer. Then there are the regular dividends, which can come in handy, solving financial needs while keeping your stock.
Exchange-traded funds (ETFs)
When you invest in exchange-traded funds, you’re indirectly co-owning several assets with fellow investors. These assets may be stocks, bonds, or valuable commodities like gold. It’s like investing in only one place but enjoying the benefits of a diversified investment portfolio.
Annuities
Annuities guarantee that a retiree will enjoy income until they are no more and can be bought with one-time payments. Retirees who invest in annuities can earn from them monthly, quarterly, or yearly. The thing about an annuity is that one is sure of financial security while one pursues other ventures.
Precious Metals or Commodities
It’s common for people to save their money by buying and holding gold, silver, and other precious items, as these items remain valuable for long periods, even when an economy is unstable. Although they may not give annual returns or interest, their owners can be sure of a good cash out.
Real Estate
Retires have multiple options when it comes to real estate. One is to own and manage properties yourself and earn through rentals. The other is to invest in real estate investment trusts (REITs) and share profits with other investors. Retirees who want to be passively involved may prefer the second type.
Municipal Bonds
State and local governments offer municipal bonds to get residents involved in funding government projects. Funds put into such bonds are free from taxation, so many people are drawn to it. One can always resell their bonds without attracting any penalties, and while they hold the bonds, they enjoy regular interest.
Index Funds
Index funds are passively managed; hence, investing in one will generally cost less than opting for an actively managed one, like mutual funds. Interestingly, these funds perform as well as actively managed ones. Index funds allow retirees to diversify their portfolios easily and are also low-risk.
