Senior Investments: What Are the Best Retirement Investments? (2023)

Learn about some of the best investments for retirement to build a nest egg that will allow you a retirement lifestyle you deserve.

While timing is essential to investing, smart investments at any age can be effective. Even if you’re in your 50s, there’s still time to earn returns on investments. The key is to learn which investments offer advantages and disadvantages that are favorable to your particular situation and investment portfolio.

It’s important to get on the same financial page as your partner or spouse and devise a joint investment plan so you can both work toward the same goal. An investment advisor can help you strategically plan which investments will most likely give you the best return. Here are a few to consider:

Investments specifically for payout in retirement

1. Social Security

The Social Security program is funded through payroll taxes collected by employees and companies. Americans who have been contributing through payroll can start receiving payouts as early as age 62. However, it is highly recommended to wait to receive Social Security payouts as you’ll greatly increase your monthly allowance.

  • If you work until age 66 or older, you will increase your monthly benefits by 33 percent or more.
  • Age 70 is when Social Security has reached maximum value, so many seniors are working longer and waiting to claim benefits at this age.

2. 401(k)

A 401(k) is a retirement plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes are not paid until the money is withdrawn from the account.

Whether you’re proud of your current 401(k) situation or not, by the time you reach 50, you should consider participating in the program aggressively. According to the 2016 Retirement Confidence Survey, 15 percent of workers eligible to participate in their workplace 401(k) plans do not, which is why many seniors have saved less than $10,000 for retirement.

The minimum level at which you should participate is contributing enough to grab all available company matching money. If your employer offers a typical match – say, matching 50 percent of your contributions up to six percent of your salary, be sure to contribute at least that six percent. If you earn $50,000, you’ll be socking away $3,000 and your employer will add another $1,500. Just think; this isfree money.

Gradually increase your contributions

(Video) Six Best Investments For Retirees, Best Investment Retirement Planning, Kerry Grinkmeyer

If you can’t start contributing at a high level, start as generously as you can, and aim to increase your contribution regularly. If you’re currently contributing 10 percent of your earnings, consider making increasing that to 11 percent next year and 12 percent the year after. The key with 401(k) is to invest as much as you can over time.

You and your spouse can literally catch up on retirement, if needed, by participating in the 401 (k) “catch-up” contribution.

3. Roth IRA

A Roth IRA is a special retirement account where you pay taxes on money going into your account and then all future withdrawals are tax free.

To contribute the maximum

You can contribute the maximum $5,500 to a Roth IRA ($6,500 if you are age 50 or older by the end of the year) if you are single or the single head of a household and your modified adjusted gross income (MAGI) is less than $118,000.If you are married filing jointly, you can contribute the maximum amount to a Roth IRA if your MAGI is less than $186,000.

To make a partial contribution

At higher income levels, you can contribute less, based on aformula devised by the IRS. The relevant income figures:

  • You are single and your MAGI is between $118,000 and $133,000.
  • You are married filing jointly and your MAGI is between $183,000 and $193,000.
  • You can’t contribute to a Roth IRA at all if your income is above those levels.

Special rules apply to married couples who live together at any time during the year, but file separate tax returns. A certified financial planner or investment advisor can help you determine what makes sense for your unique situation.

(Video) What’s the best asset allocation in retirement?

4.Traditional IRA

Atraditional IRAis a way to get tax advantages while saving for retirement. Contributions you make to atraditional IRAmay be fully or partially deductible, depending on your financial circumstances. Generally, amounts in yourtraditional IRA, including earnings and gains, are not taxed until distributed.

Traditional IRAs come in two varieties:

  • Deductible – A deductible IRA can lower your tax bill by allowing you to deduct your contributions on your tax return. Essentially, you get a refund on the taxes you paid earlier in the year.

  • Nondeductible – You cannot deduct contributions on your tax return with a nondeductible IRA.

You can makecatch-up contributions to your traditional or Roth IRA up to$1,000in 2017, which is a great incentive if you’re over 50 and need to catch up on retirement savings.

View this chart to learn the similarities and differences between a Roth IRA and a Traditional IRA.


Annuities are simple, long-term investment products. In their most basic form, you give an insurance company an amount of money, called a premium, either in a lump sum or periodic payments. In return, you may elect to receive a steady stream of payments over time.

In reality, annuities are complex and don’t always provide the simple “safety” they promise. They typically have high costs, complex restrictions and other risks that could offset the potential benefits. They make sense in certain situations, which is why you may want to contact a professional advisor to determine whether annuities make sense for your situation.

(Video) 3 Ways to Invest Your Retirement Money | CA Rachana Ranade


A bond is adebt investmentin which an investor loans money to an entity, typically corporate or governmental, which borrows the funds for a defined period of time at a variable orfixed interest rate.

Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of bonds are debtholders, orcreditors, of the issuer. They have specific rates and maturity dates.

There are three main categories of bonds:

  • Corporate bondsare issued by companies.
  • Municipal bondsare issued by states and municipalities. Municipal bonds can offer tax-free coupon income for residents of those municipalities.
  • U.S. Treasury bonds (more than 10 years to maturity), notes (1-10 years maturity) and bills (less than one year to maturity) are collectively referred to as simply “Treasuries.”

A financial advisor can help you determine whether a bond is a good financial move for you and your spouse.


Also referred to as “shares” or “equity,” stock is a type of security that signifies ownership in acorporationand represents a claim on part of the corporation’s assets and earnings.

There are two main types of stock:

  • Common stockusually entitles the owner to vote at shareholders’ meetings and to receive dividends.
  • Preferred stockgenerally does not havevoting rights, but has a higher claim on assets andearningsthan the common shares.

General wealth building investments

Having a well-balanced portfolio is important in retirement. You and your partner should consider these wealth building investments in addition to your investments that are payable during retirement.

1. Personal Savings

Setting up a personal savings account and setting aside money each paycheck through direct deposit is a great way to accumulate funds for investing. Saving becomes a habit, a way of life after a while that pays off ten-fold over time, if done right.

(Video) The Best Investments to Make for Retirement Right Now

A retirement financial planner can help you find out what savings rate makes sense for you to set aside each paycheck, but at 50, you and your spouse should consider putting aside 20 to 30 percent of each paycheck, if you can. If your children are out of the house and no longer a fiscal responsibility, you might even be able to set aside an entire salary while living off one spouse’s salary. Again, having a joint plan with your partner or spouse is helpful so that together you can fill the gaps of retirement funds, as needed.

2. Real Estate

There is a lot of potential to make money in real estate investing, however there is also risk, depending on the market. Make sure to research the market to determine whether your real estate investment makes sense.

  • Family Home – The family home is an investment that often pays for a lot of retirement. If planned well, you’re getting close to paying off your principal balance on your house or have already done so as you reach retirement. The equity you receive as your house gains value over the years can be a great nest egg if you decide it makes sense to downsize or if you decide to move into a retirement or senior living community.

  • Basic Rental Property – Savvy real estate investors find a rental property or properties if the market is right for buying at an affordable rate and then renting for profit as the value increases over time. Timing is key with rental properties as you should aim to plan the rental property purchase during a buyer’s market when the price is right and you’re not going to lose value. You need to make sure the location is one that ensures there is demand for a tenant as you can quickly lose money if the property/properties is vacant for months at a time.

  • Real Estate Property Trading – Property trading, also knows as a like-kind exchange or a Section 1031 exchange, allows real estate investors to defer capital gains or losses when they buy or sell a property. This kind of exchange keeps the taxman out of the deal until later, when the property is sold. Basically, the like-kind exchange encourages investors to rebalance real estate portfolios, which unlike individual stocks and bonds, can make up a significant portion of a portfolio’s value.

  • Real Estate Investment Trust (REIT) – A REIT is a company that owns or finances income-producing real estate. REITs are modeled after mutual funds and provide investors regular income streams, diversification and long-term capital appreciation. Typically, REITs pay out all of their taxable income as dividends to shareholders and, in turn, shareholders pay the income taxes on those dividends.

Senior Investment Planning

In order to be prepared for retirement, it’s important to educate yourself and plan investments while there’s still time for them to make money for you. Ideally, you’ll plan investments in your 20s, but having a balanced portfolio means you can invest at any point in your career. Choosing the right investments for your unique situation can help you get the return you desire. A senior financial advisor or planner can help you determine what investments make sense for you and your family.


What is the safest investment for senior citizens? ›

Best Investment Plan for Senior Citizens
  • Senior Citizens Savings Scheme (SCSS)
  • Pradhan Mantri Vaya Vandana Yojana (PMVVY)
  • Post Office Monthly Income Scheme (POMIS)
  • Senior Citizen FD.
  • Tax-Free Bond.
  • Mutual Funds.
14 Sept 2022

What is the safest investment with highest return? ›

Here are the best low-risk investments in October 2022:
  • High-yield savings accounts.
  • Series I savings bonds.
  • Short-term certificates of deposit.
  • Money market funds.
  • Treasury bills, notes, bonds and TIPS.
  • Corporate bonds.
  • Dividend-paying stocks.
  • Preferred stocks.
1 Oct 2022

What is a good asset allocation for a 70 year old? ›

If you're 70, you should keep 30% of your portfolio in stocks. However, with Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age.

Where is the safest place to put your retirement money? ›

The safest place to put your retirement funds is in low-risk investments and savings options with guaranteed growth. Low-risk investments and savings options include fixed annuities, savings accounts, CDs, treasury securities, and money market accounts. Of these, fixed annuities usually provide the best interest rates.

Which mutual fund is best for senior citizens? ›

List of Best Mutual Funds for Senior Citizens
Mutual FundNAV (Rs.)
SBI Conservative Hybrid Fund – Direct Plan-Growth59.36
ICICI Prudential Ultra Short-Term Fund Direct Plan-Growth24.42
HDFC Short-Term Debt Fund Direct Plan-Growth26.57
ICICI Prudential Balanced Advantage Fund- Direct Plan-Growth56.83
1 more row
23 Sept 2022

What is the best way to invest a retirement lump sum? ›

When you take a lump sum pension payout, one investment option is to roll the funds into an IRA. Once in the IRA, you can use some of the funds to purchase an immediate annuity, which is an investment vehicle that offers regular payments to investors for a specified period of time.

What are tax free bonds for senior citizens? ›

Senior Citizen Savings Scheme (SCSS)

A person over the age of 60 can establish this account at a post office by making a single deposit in the account in multiples of INR 1,000 with a maximum deposit of INR 15 lakh. Investments made under this scheme are eligible for tax benefits under section 80C.

Are annuities a good investment in 2022? ›

Higher annuity payouts

The average payouts from an immediate annuity increased by more than 11% for men and 13% for women since the beginning of 2022, according to CANNEX Financial Exchanges Limited. (The data is based on a 70-year-old man and 65-year-old woman who buy an immediate annuity with a $100,000 lump sum.

What is a good asset allocation for a 65 year old? ›

For most retirees, investment advisors recommend low-risk asset allocations around the following proportions: Age 65 – 70: 40% – 50% of your portfolio. Age 70 – 75: 50% – 60% of your portfolio. Age 75+: 60% – 70% of your portfolio, with an emphasis on cash-like products like certificates of deposit.

Where can I put my money to earn the most interest? ›

The following ideas can help you make a plan to save and maximize your interest earnings.
  • High-Yield Savings Account. ...
  • High-Yield Checking Account. ...
  • CDs and CD Ladders. ...
  • Money Market Account. ...
  • Treasury Bills.
8 Apr 2022

Who is better than Fisher investments? ›

Top 10 Alternatives & Competitors to Fisher Investments
  • Voya Financial. (3)4.7 out of 5.
  • AcctTwo. (60)4.6 out of 5.
  • Richards Financial. (1)5.0 out of 5.
  • Bench. (69)4.5 out of 5.
  • PricewaterhouseCoopers (PwC) (16)4.1 out of 5.
  • KPMG. (17)4.2 out of 5.
  • Fiserv. (15)4.2 out of 5.
  • Ernst & Young. (18)4.0 out of 5.

What are some things with investing that you should never do? ›

  • Buying high and selling low. ...
  • Trading too much and too often. ...
  • Paying too much in fees and commissions. ...
  • Focusing too much on taxes. ...
  • Expecting too much or using someone else's expectations. ...
  • Not having clear investment goals. ...
  • Failing to diversify enough. ...
  • Focusing on the wrong kind of performance.

At what age should you stop investing? ›

You probably want to hang it up around the age of 70, if not before. That's not only because, by that age, you are aiming to conserve what you've got more than you are aiming to make more, so you're probably moving more money into bonds, or an immediate lifetime annuity.

How do I protect my 401k from the stock market crash 2022? ›

How to Protect Your 401(k) From a Stock Market Crash
  1. Protecting Your 401(k) From a Stock Market Crash.
  2. Don't Panic and Withdraw Your Money Too Early.
  3. Diversify Your Portfolio.
  4. Rebalance Your Portfolio.
  5. Keep Some Cash on Hand.
  6. Continue Contributing to Your 401(k) and Other Retirement Accounts.
  7. Bottom Line.
10 Oct 2022

What do you do with large amounts of physical cash? ›

“To minimize loss from inflation, it's wise to not keep too much of your emergency fund at home in physical cash. By keeping the bulk of the money in a savings account or a certificate of deposit, you can at least earn some interest on it to counteract inflation.”

Why is my 401k losing money right now 2022? ›

There are several reasons your 401(k) may be losing money. One reason is that the stock market is simply going through a down period. Another reason your 401(k) may be losing money is that you have invested in a specific company or industry that is not doing well. Finally, your 401(k) may lose money because of fees.

Where should I invest my money right now? ›

12 best investments right now
  • High-yield savings accounts.
  • Certificates of deposit (CDs)
  • Money market funds.
  • Government bonds.
  • Corporate bonds.
  • Mutual funds.
  • Index funds.
  • Exchange-traded funds (ETFs)
27 Sept 2022

What are the top 10 stocks to buy in 2022? ›

Top 10 Stocks To Consider in 2022
StockPriceMarket Cap
Devon Energy Corp. (DVN)$65.12$43.128 billion
Marathon Oil Corp. (MRO)$25.76$17.455 billion
Qualcomm Inc. (QCOM)$124.77$143.104 billion
Berkshire Hathaway Inc. (BRK-A)$419,869$608.826 billion
6 more rows
22 Sept 2022

What is the highest yielding investment? ›

17 Best High-Yield Investments for 2023 (Least to Most Risky)
  • High-yield savings accounts.
  • Certificates of deposit.
  • I Bonds.
  • Money market accounts.
  • Government bonds.
  • Municipal bonds.
  • Corporate bonds.
  • ETFs.
14 Sept 2022

What should an 80 year old invest in? ›

If you're looking to grow your portfolio throughout retirement while maintaining some semblance of conservativeness, consider a Money Market Account, mutual fund, preferred stock, life insurance, CD, or treasury securities.

Where should a 60 year old invest? ›

The point is that you should remain diversified in both stocks and bonds, but in an age-appropriate manner. A conservative portfolio, for example, might consist of 70% to 75% bonds, 15% to 20% stocks, and 5% to 15% in cash or cash equivalents, such as a money-market fund.

Are mutual funds good for seniors? ›

"Mutual funds are a very good tool for senior citizens to diversify investment risks, provide liquidity while still giving good inflation-adjusted returns over the long term.

What is better than an annuity for retirement? ›

Some of the most popular alternatives to fixed annuities are bonds, certificates of deposit, retirement income funds and dividend-paying stocks.

Is it better to take an annuity or lump sum? ›

A Lump Sum Gives You More Control of Your Assets

By accepting a lump sum from the pension, you gain the control over your income assets. Even if the income generated from the lump sum is less than the promised annuity payment from the pension, you gain control over the assets.

Is it better to invest a lump sum or monthly? ›

You're more likely to end up with higher returns.

Lump-sum investing outperforms dollar cost averaging almost 75% of the time, according to data from Northwestern Mutual, regardless of asset allocation. If you're comfortable with risk, then investing your money in one large sum could yield better results.

How can senior citizens avoid taxes? ›

Tax-Saving Tips for Senior Citizens
  1. Invest in Senior Citizen's Saving Scheme. The Senior Citizen's Saving Scheme (SCSS) is a very popular investment instrument among those above 60 years of age. ...
  2. Avail of benefits under the income tax slab rates. ...
  3. Invest in health insurance. ...
  4. 4.Invest in five-year fixed deposits (FDs)

Which is the best tax free investment? ›

Listed below are tax free investments that meet a variety of needs and financial goals:
Sr No.Best Tax Free InvestmentsTax Benefits
1.Life InsuranceUnder Section 80C and Section 10(D)
2.PPF (Public Provident Fund)Under Section 80C and Section 10(D)
3.NPS (New Pension Scheme)Under Section 80CCD
4.PensionUnder Section 80CCC
2 more rows

Which bank is best for senior citizens savings account? ›

7 Best Savings Accounts for Senior Citizens
Account NameInterest Rate per annum (up to Rs. 1 lakh)
Kotak Mahindra Bank3.50%
Axis Bank3.00%
HDFC Bank3.00%
ICICI Bank3.00%
3 more rows
5 May 2022

How much should retirees be invested in the stock market? ›

Keeping 20 to 30 percent in stocks is a way for even a conservative investor to maintain some opportunity for growth and keep up with inflation. So while it's smart to have more in cash in your older years, maintaining a diversified portfolio is a strong hedge against uncertainty at any age.

What is a good portfolio for a 60 year old? ›

According to this principle, individuals should hold a percentage of stocks equal to 100 minus their age. So, for a typical 60-year-old, 40% of the portfolio should be equities. The rest would comprise high-grade bonds, government debt, and other relatively safe assets.

What is an average rate of return on a retirement investment? ›

Many retirement planners suggest the typical 401(k) portfolio generates an average annual return of 5% to 8% based on market conditions.

How do I manage my money after retirement? ›

10 Great Tips for Managing Money in Retirement
  1. Be Tax Efficient with Withdrawals. ...
  2. Focus on Creating Retirement Income. ...
  3. Make Trade Offs — Know What is Important to You. ...
  4. Prioritize Spending on Yourself. ...
  5. Look at Your Home Equity. ...
  6. Wait as Long as Possible to Start Social Security. ...
  7. Be Prepared for Spending Shifts.

What is the average net worth of a 70 year old? ›

Median Value of Assets for Households by Age
Age of HouseholderMedian Net Worth
45 to 54 years old:$125,400
55 to 64 years old:$194,800
65 to 69 years old:$236,900
70 to 74 years old:$302,300
4 more rows
16 Sept 2022

What is a good asset allocation for a 65 year old? ›

For most retirees, investment advisors recommend low-risk asset allocations around the following proportions: Age 65 – 70: 40% – 50% of your portfolio. Age 70 – 75: 50% – 60% of your portfolio. Age 75+: 60% – 70% of your portfolio, with an emphasis on cash-like products like certificates of deposit.

What should a retiree portfolio look like? ›

Ideally, you'll choose a mix of stocks, bonds, and cash investments that will work together to generate a steady stream of retirement income and future growth—all while helping to preserve your money.

Can I retire at 64 with 500k? ›

If you retire with $500k in assets, the 4% rule says that you should be able to withdraw $20,000 per year for a 30-year (or longer) retirement.

Where should I put $100000? ›

Best Investments for Your $100,000
  • Index Funds, Mutual Funds and ETFs. If you're looking to invest, there are a lot of options. ...
  • Individual Company Stocks. ...
  • Real Estate. ...
  • Savings Accounts, MMAs and CDs.
25 Aug 2022

How should a 60 year old invest their money? ›

Retirement investments will vary per individual depending on their financial profile, family profile, and needs. Some good investments for retirement are defined contribution plans, such as 401(k)s and 403(b)s, traditional IRAs and Roth IRAs, cash-value life insurance plans, and guaranteed income annuities.

What is the 3 rule in retirement? ›

That's partly why today's financial advisors are telling people to plan for a 3% withdrawal rate. This advice follows the idea of "Hope for the best, plan for the worst." Plan your necessary expenses at 3%. If stocks tumble, and you're forced to withdraw 4% to cover your bills, you'll still be safe.

Why is my 401K losing money right now 2022? ›

There are several reasons your 401(k) may be losing money. One reason is that the stock market is simply going through a down period. Another reason your 401(k) may be losing money is that you have invested in a specific company or industry that is not doing well. Finally, your 401(k) may lose money because of fees.

What is the best investment for monthly income? ›

Best Monthly Income Plans You Should Consider
  • Post Office Monthly Income Scheme.
  • Long-Term Government Bonds.
  • Corporate Deposits.
  • Monthly Income Plans.
  • Pradhan Mantri Vaya Vandana Yojana.
  • Life Insurance Plus Saving.
  • Systematic Withdrawal Plans.
  • Equity Share Dividends.
22 Jul 2022

What is the best way to invest a retirement lump sum? ›

When you take a lump sum pension payout, one investment option is to roll the funds into an IRA. Once in the IRA, you can use some of the funds to purchase an immediate annuity, which is an investment vehicle that offers regular payments to investors for a specified period of time.

What should I do 1 year before retirement? ›

Finally, to prepare emotionally, figure out what you plan to do with your time in retirement.
  1. Create or Update Your Retirement Budget.
  2. Adjust Your Portfolio for Income.
  3. Learn How Medicare Works.
  4. Refinance Your Mortgage (Maybe)
  5. Decide When to Claim Social Security Benefits.
  6. Determine How You'll Spend Your Time.

How do I create a retirement portfolio? ›

Structuring Your Retirement Portfolio
  1. Set aside one year of cash. Try to set aside enough cash--minus any regular income from rental properties, annuities, pensions, Social Security, investment income etc. ...
  2. Create a short-term reserve. ...
  3. Invest the rest of your portfolio.


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