All About Senior Citizen Investing

Apr 18th, 2020 | By | Category: Senior Moments Blog

Investment Options

Most of us seniors are not money/investment wizards, and we need help and advice when it comes to investing and money management. We generally do just fine managing our bills and living within our income. But when it comes to investing money that we are not spending on lifestyle, we usually need help. And, by the way, so does the younger generation.

There are several investing arenas we can consider. Those include savings, CD’s and money market accounts, real estate, our own or somebody else’s business, and the stock market. Let’s take a look at each one. We are not financial experts, and we are not offering financial advice. This article is simply a review of the options.

Savings and Money Market Accounts

Savings and money market accounts are considered ‘safe’ by most financial experts. That is, unless a financial institution is closed, money invested in these accounts will produce interest income and the principal invested will not be lost. Interest earned from savings accounts depends on the rate established by the Federal Reserve.

Money market accounts are much the same; however, the interest rate is generally higher due to a different investment strategy. CD’s are also similar, again a different investment strategy and generally higher interest paid. CD’s also have time requirements attached. Both of these kinds of investments usually have higher interest rates than savings accounts.

Real Estate and Business Investments

These investments are generally considered more risky for seniors than stocks and bonds. Many financial advisers and experts urge caution, especially for seniors, when considering these investments. There are a myriad of reasons, but the major one is the amount of time and work you have to devote to real estate and business investments. Be sure you have the time, expertise and will to spend on your investment, says Investopedia. “Perhaps the biggest difference between a rental property and other investments is the amount of time and work you have to devote to caring for it.”

The Stock Market

Most financial experts recommend having a financial adviser when it comes to investing in stocks. The history and intracacies of investing need to be understood (by experts in the field) in order to make wise decisions. Stocks and Bonds can be a good choice for seniors if they are chosen wisely, and if they are based on the senior’s risk tolerance level. The stock market can be volatile, that is, it can increase and decrease without any notice. And when it drops a lot and day after day, the investment can diminish quickly. Seniors have to be able to tolerate these fluctuations.

Financial advisers also recommend beginning these investments before a person retires and becomes a ‘senior’ in order to build a nest egg for retirement.

Seniors should take a look at all these options, do the research, talk with financial experts or your adviser, and make choices about investing based on your identified risk tolerance level. There aren’t any guarantees. But there are options to consider based on your expectations.

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