As you prepare your retirement savings portfolio, the first thing you should do is set aside money for emergency purposes (three months' living expenses is usually the minimum amount recommended). The emergency fund gives you a cushion in the event of illness, natural disaster or any other unforeseen expense, and it provides a backup in the event of another economic crisis. Just make sure you can easily access your emergency money if the need ever arises. Once you've got that taken care of, you can explore relevant investment opportunities.
Retirement is not the time to put most of your money into high-risk investments. You want to ensure that you have a secure financial base to last the remainder of your life, which could realistically be several decades. Whatever money you put into a high-risk investment could be lost, so you need to balance things out with low-risk financial opportunities [source: Consumer Boomer].
Treasury bonds are one of the safer options. They have a fixed rate of interest, which means you're guaranteed at least that much growth over the life of the bond; it won't earn you as much money as a good stock market gamble, but it will certainly earn more than a bad one. CDs (certificates of deposit) are also a possibility, although you'll usually be penalized if you need to withdraw money early. If you have an IRA (individual retirement account), you can keep our funds there and withdraw without penalty once you reach age 59 1/2 [source: Mutual of America].
Another option financial advisors recommend is an annuity. You put money into an annuity, either in a lump sum or over time (before you retire, naturally), and in return you receive regular payments back, almost like a salary. There are different kinds of annuities: fixed annuities, which have a set rate of interest; indexed annuities, whose interest rates fluctuate according to a particular index (such as the S&P 500); and variable annuities, where you and pick and choose how your money will be invested, and the rate of your return is dependent on the performance of those investments.
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