Conservative Ways to Invest Your Retirement Money

Conservative Ways to Invest

When it comes to retirement funds, the more diverse your investments, the better. However, not everyone has the funds available for higher-risk investments, and that’s why many people choose conservative methods. Here are a few ways for you to invest and manage your retirement money conservatively.

Real Estate

Even though the federal reserve has upped the prime mortgage rate this year, the truth is that real estate – especially in certain markets – is still one of the safest investments out there. However, it’s important for buyers to be savvy shoppers; you’ll need to grab a great deal when you see it and then hold on to it as the property value appreciates. Some of the best markets for real estate appreciation right now are Grand Rapids, Michigan; Orlando, Florida; San Antonio, Texas; Charlotte, North Carolina; and Salt Lake City, Utah.

Savings Bonds

Savings bonds are sold by the United States government, and most people consider them one of the most conservative investments available today. Essentially, you “loan” the government your money and receive a savings bond as an IOU. You can keep your savings bond for a period of up to 30 years, at which point you’ll need to cash it out in order to preserve its value. Although you can cash in your savings bond after just a year in order to collect its face value plus interest, it’s best to let it ride for the full 30 years, if possible. The risk associated with savings bonds is very, very low, but the potential earnings are capped.

Individual Retirement Account

Anyone and everyone should have an individual retirement account, or IRA. There are two different types from which to choose: the traditional IRA and the Roth IRA. Roth IRAs have income eligibility restrictions and offer no tax break for contributions, but anything you earn or withdraw is usually tax-free. What’s more, you must take minimum distributions at age 70 ½ if you have a traditional IRA, whereas you are not required to take any distributions if you have a Roth IRA. It’s important to do some research before you decide on which IRA is best for you, but having one is important since it will be the basis of your retirement.


Your employer’s 401(k) plan is by far the safest and most profitable way to invest your retirement money. You should, at the very least, contribute the maximum amount that your employer will match; otherwise, you’re missing out on the opportunity to earn free money. Remember that there are penalties for withdrawing funds from your 401(k) account early, but if you have a great return on your investment thanks to employer matching, a 401(k) is the way to go.

Of all of these different investments, real estate is probably the riskiest. Even then, if you choose your property carefully, you can manage that risk successfully. A diverse retirement portfolio can help ensure that you have the funds you need when you reach retirement age, so be sure that you don’t put your eggs all in one basket. Consider all of these conservative investments, instead.