best senior investments

What Are The Safest Investments for Seniors? Here are 4 to think about

A major concern for many senior investors is running out of money too soon – and so they look for the safest investments for seniors that they can, and several options exist.

The current low interest rate climate does not help retirees particularly, and senior investors will look at what financial investment options are available that can minimize the risk of investment and also give assured returns, along with keeping their funds safe.

For those with an investible surplus, instead of investing in a staggered manner, experts say one could look at allocation-based strategy. For instance, senior citizens should avoid any long term investment options and should put their maximum allocation in short-medium duration investment options (6 months – 3 years).

Social Security Fund

For most people, one of the best ways to ensure you have enough money during your retirement years is to delay taking your Social Security benefits for as long as possible (but not past age 70) and generate income by setting up a Social Security bridge fund with a portion of your retirement savings, then use those funds to pay yourself an amount equivalent to the Social Security benefit you’re delaying. This investment move will increase your guaranteed, lifetime retirement income and provides a safe senior investment. 

The long-term “yield” on such a Social Security bridge fund ranges from 7% to 10% per year, which is guaranteed by the U.S. government. For the rest of your life. 

Get Rid of That Mortgage

An obvious one for senior investors (and many others, too).

If you’re paying an interest rate of 4% or more on your current home mortgage, then paying it off is like earning a fixed rate of 4% or more per year, which significantly exceeds the yield on most “safe” fixed income investments. 

There are considerations to take into account when paying off your mortgage such as he source of the savings—whether it’s been taxed or is pre-tax—you’ll use to pay off the mortgage. Other considerations include your preference for liquidity, whether you can use the interest deduction, and your marginal income tax rate.  

If you’re analyzing whether it makes sense to pay off your mortgage, it’s misleading to compare the historical rate of return on your total investment portfolio to the interest rate on your mortgage.  A more valid comparison is the current yield on fixed income investments in your portfolio vs. your mortgage interest rate. If you decide to pay off your mortgage, use your fixed income investments to fund the payoff.


Annuities have a mixed reputation depending upon who you ask. You will receive different viewpoints on annuities from people in the insurance industry vs. people who want to invest your money in stocks and bonds. For the purposes of this discussion, I’m referring to immediate annuities that provide a stream of lifetime retirement income, not deferred annuities that are often sold as investments.

People often have misconceptions about annuities thinking that you should buy when interest rates rise.But a low-interest environment is actually a good time to invest in an immediate annuity, since it’s a reliable way to safely spend your principal. 

In addition, if you’re waiting to buy an annuity until interest rates rise, you could be waiting a long time. And what will you invest in while you’re waiting? Cash? And earn nothing? Long-term bonds? Then you may as well have invested in the annuity, since annuities are typically backed by long-term bonds. Stocks? While stocks have the potential for significant returns, it’s not a return you can rely on.


Another obvious one and probably one most senior investors hear many times – or at least think about. Housing is still the largest living expense for most retirees. So, if you have limited retirement income and are looking to make ends meet, consider looking for a home that costs less than your current house and has lower maintenance costs and property taxes.  

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