How to Make Safe Investments Throughout Retirement

Matt DattilioPosted by Matt Dattilio on May 12, 2019

You’ve finally hit your retirement milestone. The big party was last weekend, and now that the dust has started to settle, reality sets in. Is the money you’ve set aside for retirement enough to actually last? Are you going to have to reenter the workforce out of necessity because of improper planning? Is it all just a cruel joke? 

These concerns—while most often exaggerated—are extremely common among new or impending retirees. That being said, making safe investments throughout retirement can be a great way to quell your nerves and remain actively involved with your financial future. Here are a handful of steps you can take once you’ve entered into retirement, all of which can help you grow and protect your nest egg. 

Review Your Financial Situation

At the heart of any smart investment is knowing where you actually stand financially, and this couldn’t be more true than in retirement. Start by taking a close look at two important financial factors: income sources and budget flexibility. It’s also important to think about the estimated length of your retirement. One who retires at 55 will have more to plan for than someone who stop working in their early seventies, for example, especially when you consider inflation and market volatility. With life expectancy continuing to increase, thinking ahead has never been so important.

Your income sources will most likely be fixed (think Social Security, pensions etc.), which means they’re best matched in your budget with fixed monthly expenses. By calculating a gap between your fixed income and your fixed expenses, you should end up with a surplus that can be invested to cover non-essentials like travel, leisure and entertainment. Why is this important? It affords you a clear picture of how much money you can safely invest without disrupting your day-to-day life throughout retirement. Otherwise, you’ll be taking a risk with investing—even if the investments you make aren’t particularly “risky,” per se.  

Treasury Bonds, CDs and Annuities

Once you’ve taken the time to evaluate what you have at your disposal for investing, you’ll want to look toward some of the safer investments available today: treasury bonds, CDs and annuities. Treasury bonds are one of the safest options for investing you can choose, as they come along with a fixed interest rate and guaranteed growth for the life of the bond. While returns aren’t likely to make you rich, they’ll certainly help in furthering along your retirement. 

Another investment option to look at is certificates of deposit, or CDs. Essentially referred to as “timed deposits,” CDs are like savings accounts in which the money held must be left in place for a specific period of time, called the “term length—typically between three months and five years. While CDs do come along with penalties if money is withdrawn ahead of time, patient investors can get a lot of mileage out of the interest generated by these types of accounts. 

Finally, you may want to consider annuities as an investment option. Annuities come in three flavors—fixed, indexed and variable. While fixed annuities come along with fixed interest rates and are thus the most stable of the three, indexed annuities fluctuate based on indexes like the S&P 500, and variable annuities allow you to pick and choose exactly how your money will be invested. Depending upon how hands-on you want to be, one may be a better fit than another, but they’re all great options for growing your nest egg. 

Retirement may feel like putting an end to financial growth, but it doesn’t have to be. Make smart, safe investments, and remain in control of your financial future.