After their working years have ended, seniors need to steer their money toward investments that are not as risky. If they lose the money they have worked a lifetime to accumulate, it will be unlikely that they will have time to rebuild their portfolios. The top investment opportunities for seniors keep their money safe and provide them with the money they need to survive throughout a lengthy retirement.
The Certificate of Deposit
The certificate of deposit is a very safe place for seniors invest money because if they keep the amount below $100,000, they will not lose any money if the bank fails. Seniors only need to make sure that their banks are fully insured by the FDIC, and they can be assured that their deposits are safe.
Different banks offer different interest rates for certificates of deposit, so seniors will want to ask several banks what rates they are offering before they decide where they will purchase their CDs. One strategy that seniors often employ is purchasing a one-year CD, one two-year CD, one three-year CD, one four-year CD and one five-year CD. Every year that one CD matures, seniors can renew them at a higher interest rate. In the meantime, they are earning interest income every month.
Treasuries are safe because the United States government backs them, and they are very easy to find. Banks and credit unions sell treasuries, but seniors can also buy them directly from the U.S. government. One type of treasury is the Treasury-Bill (T-Bill). The T-Bill is a debt obligation that will mature in less than 12 months. Seniors will be able to purchase these T-Bills in $1,000 denominations that will mature in one month, three months or six months. Seniors also have the choice of purchasing treasury bonds or savings bonds.
Government National Mortgage Association (GNMA) Bonds
GNMA is also known as GINNIE MAE. GNMA bonds are what are commonly known as mortgage-backed securities, and they are safe because they are also fully backed by the government of the United States. They provide investors with a reliable income source, and they offer seniors higher interest rates than the treasuries mentioned above.
As interest rates increase, the GNMA bond’s price decreases. As interest rates decrease, the bond’s value increases. The interest rate will only be of concern for seniors who will need to withdraw the principal. If, on the other hand, seniors will be living off of the interest, they will not need to worry about the interest rate.
Jennie was born in Naperville, Illinois and grew up as an advocate for the elderly. She now works full time as a financial advisor. Jennie recommends Naperville elderly care to her friends and family for their dedication to providing superior service to their clients.