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Many adults today struggle to save money for retirement. Only 45% of non-retired adults in their 60s feel their retirement savings are on track. 13% of those same adults do not have any retirement savings at all.

When their main source of income won’t create sufficient retirement savings, some older adults pursue supplementary income. Supplementary income helps adults of all ages add to their retirement savings and social security benefits. Creating multiple income streams helps adults live an enjoyable lifestyle when retirement arrives.

In other cases, adults can save more money for retirement by investing in a variety of funds. Diversifying your investments means investing in different industries, sectors, or companies — all to minimize risks.

It’s important to learn smart investment strategies, and grow familiar with different investment types as you save for retirement.

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High-yield Savings Accounts

Depending on how you structure your retirement savings, you might create a high-yield savings account. Unlike traditional savings accounts, high-yield savings accounts offer a much higher annual percentage yield (APY). With lower interest rates than traditional savings accounts, high-yield savings accounts allow you to earn more from your investments.

High-yield savings accounts are also safer than other account types. While you might earn less than you would through the stock market or other higher-risk investments, high-yield savings accounts represent a safe investment option for retirement.

Your initial investment is often guaranteed when you create a high-yield savings account. While the account’s APY might fluctuate, you won’t lose capital. This virtual guarantee is important for older adults, particularly those considering retirement in the next few years.

Certificates of Deposit

Many older adults will also consider a certificate of deposit (CD) when saving for retirement. A CD is a savings account that holds funds for a set period. When that period expires, the bank returns the invested money with interest.

Certificates of deposit work well for older adults who won’t need immediate access to their funds. As long as you don’t need your funds tomorrow, investing in a CD can earn you a higher interest rate than what a high-yield savings account might offer.

CDs are a safe investment — as long as you entrust your funds to a federally insured bank. Verified CDs made through an FDIC-insured institution are protected up to $250,000, keeping your retirement money safe until it’s ready for use.


Treasury inflation-protected securities, or TIPS, represent another low-risk investment that helps older adults prepare for retirement. Often sold for periods of five, 10, or 30 years, TIPS are indexed to the current inflation rate.

TIPS respond directly to inflation. The account’s principal amount is adjusted up when inflation occurs. If the market deflates, the principal lowers. Once the account matures, the investor will receive the original amount and any inflation the account has seen. Investors also receive a fixed interest rate, paid every six months.

Like other low-risk account types, TIPS guarantees you the full amount of your investment. While this means your yield might be lower, you also won’t lose any of your original principal. This security makes TIPS another quality investment option for older adults considering retirement.

Fixed Annuities

Fixed annuities also offer guaranteed returns for investors. Unlike a variable annuity — which pays fluctuating interest based on portfolio performance — fixed annuities pay a set interest rate. Once the account matures, the investor receives their principal alongside the guaranteed interest.

Unlike some other investment types, fixed annuities can be made either as a lump sum or as contributions over time. Taxes are deferred until the investor decides to receive income from the fixed annuity. Fixed annuities can be paid out over a set number of years, or for the remainder of the investor’s life.

Guaranteed returns and regular payments make fixed annuities popular among older adults considering retirement. Accounts can grow tax-free while account holders pay into them. When the investor decides to retire, they begin to receive payments with premiums already removed.

Dividend-paying Stocks

Adults can also save for retirement through dividend-paying stocks — rewards from a profitable company paid to invest in stakeholders. These stocks are often purchased through a brokerage account or an IRA. Payments are made directly into an investor’s account when dividends are paid.

Dividends are often paid quarterly to stakeholders, in addition to any special, one-time dividend payments. Companies often make dividend payments specifically to share profits with investors. In other cases, companies might make dividend payments if they don’t have any opportunities to reinvest the funds.

Regular dividend payments, and natural stock appreciation over time, make dividend-paying stocks a popular investment strategy for older adults.

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The Importance of Diversification for Retirement Planning

Even the best investments come with risk. In the same way that a great investment creates wealth, a poor investment might mean you lose money. To protect themselves against these risks, many older adults diversify their retirement funds. This means spreading your investments across different funds or companies.

Diversification is also one of the smartest ways to protect your retirement savings from inflation. Though the stock market carries its own risks, it typically outlasts inflation. The stock market has averaged a 10.05% per-year return since 1926, regardless of other economic fluctuations.

Older adults who diversify their portfolios can retire with confidence, despite lingering concerns about the impact inflation might have on retirement savings. 

How To Get Started Investing

Even if you can only invest a little at a time, it’s important to begin investing early for retirement. 

Here are a few, basic steps to help you begin investing for your retirement:

Make sure you select a strategy that aligns with your investment timeline. For example, investing in a CD might not be the best strategy for an adult retiring in three months.

It’s also important to identify your acceptable level of risk when you start investing. Older adults typically seek lower-risk investment types as they approach retirement, to ensure they don’t lose any of their capital. Diversifying your investments can also help you balance risk across all investments.

You don’t need to decide on a stock trading platform overnight. Instead, carefully research different stock trading platforms before deciding on the one that’s right for you. Look for an insured platform that offers fraud protection and personal information security, to help keep your money and your identity safe.
Prioritize stock trading platforms that are members of the Securities Investor Protection Corporation (SIPC), Financial Industry Regulatory Authority (FINRA), or other regulatory organizations. These organizations offer an extra level of protection against fluctuations across firms and exchange markets.

Content on this site is for reference and information purposes only. Do not rely solely on this content, as it is not a substitute for advice from a financial advisor or accounting professional. assumes no liability for inaccuracies.

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