The Best Investments for Retirees
It's never too early to start planning for retirement. Once retirement rolls around, however, this doesn't mean you're finished investing. In fact, there are lots of investments you can make to maximize your retirement funds. Keep reading to learn about the best investments for retirees.
Once you're in your retirement years, you're past the ability to make investments that are based on compounding interest profits. There's also a good chance you don't have the time to perform extensive market research. After all, your retirement years are meant to be enjoyed. You've already put all of your hard work in. To keep your investments safe during retirement, it's best to stick to ones that are low risk. Volatile investments can wipe all of your savings out quickly. Ideally, you'll stick to low-risk investments that have a guaranteed return, even if the return is small.
Just because you're making low-risk investments doesn't mean you have to be 100 percent conservative. You can always allocate a portion of your funds to go toward investments with moderate returns. These will have a higher risk than the low-risk, guaranteed investments, but with risk comes reward. Just make sure the portion of your funds that you are allocating toward modest return investments is a portion that you can live without. This way, if you were to lose the funds, you won't be struggling financially. As with any type of investment, particularly ones with moderate return potentials, speak with a financial adviser to ensure you are making a sound financial choice.
The average person spends about at least 10 years in retirement, according to Benzinga. This means your retirement fund should be large enough to cover at least 10 years' worth of living expenses, including housing and medical costs. Because of this, it's best to make your investments in products with high liquidity. This way, if you need a lump sum of money quickly, you can sell the asset and cash out.
U.S. Treasury Bonds
United States Treasury Bonds make for terrific investments for retirees. This type of bond is a form of long-term security. With it, you will earn semi-annual interest increments that are paid out twice a year. Keep in mind that the interest you make off of U.S. Treasury Bonds is not subject to state or local taxes. However, it is subject to federal taxes.
Municipal bonds are another type of investment that are ideal for retirees. Known as debt securities, these bonds are issued by local and state governments. The funds are used to pay for everyday projects, such as those relating to building roads and maintaining water treatment facilities. These bonds are smart investments because you don't have to pay income tax on the interest that you earn from them.