As you approach retirement, your financial focus usually shifts. You want to find investments that can provide you with a steady income, and typically want to minimize risk to ensure your balance remains relatively safe. If you are looking for the best monthly income investments for senior citizens, here are a few to consider.
High-Yield Savings Accounts
While not technically an investment, high-yield savings accounts are about as secure as they come. As long as you chose one that is FDIC-insured, up to $250,000 per bank is covered, giving you peace of mind.
If you focus on high-yield online savings accounts, you might be able to find interest rates reaching 2 percent or more. That way, your money can generate a modest return while remaining accessible and safe.
Certificates of Deposit
When you go with an FDIC-insured certificate of deposit (CD), your money is also protected. You select a term length and receive a specific interest rate that is generally higher than what you find on savings accounts. As long as you wait until the CD matures to pull out the money, you can simply cash them out.
By staggering the maturity dates of multiple CDs, you can give yourself a reliable source of income. As they mature, you can cash it out to live on the money. Otherwise, you can roll it over into another CD, allowing the cash to keep earning for another term if you don’t need it immediately.
Money Market Accounts
These interest-bearing investment options feature low-risk pools. Usually, a money market account is made up of CDs, Treasury bonds, and savings accounts, all of which carry lower risk levels while offering returns higher than most traditional savings accounts. Plus, you can withdraw cash from a money market account with relative ease. However, you might be limited to a certain number of withdrawals a month, so you have to keep that in mind.
Certain Treasury securities can be great options for senior citizens. Treasury bills (T-bills) don’t earn interest. However, you buy them for less than their face value and, once they mature, you receive the full value. Usually, they mature in a year, making them a reliable income stream.
Treasury notes (T-notes) can also be a solid choice. These typically have terms as short as two years. Along with getting their face value once they mature, you also receive interest income every six months, providing a steady influx of cash.
Corporate Bond Funds
With a corporate bond fund, you invest in a pool of corporate bonds, minimizing your risk. They usually mature in one to five years and do accrue interest. However, they aren’t FDIC-insured, so you want to do your research before choosing one.
Do you have any ideas about the best monthly income investments for senior citizens? Share your thoughts in the comments below.
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