Maximize your retirement income with these 7 low-risk, high-return investments
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Planning for retirement can be overwhelming, especially in uncertain economic times.
Market volatility and inflation are leaving many older Americans searching for safe places to grow their savings.
But according to financial experts, there are reliable options that can generate returns without putting your hard-earned money at risk.
"High-yield savings accounts offer a safe place for cash while earning a higher interest rate than traditional savings accounts," says Chad Gammon, a certified financial planner at Custom Fit Financial.
These accounts are frequently offered by online banks rather than brick-and-mortar institutions.
"But they are still FDIC-insured up to $250,000," Gammon explains.
"These accounts are ideal for emergency funds or short-term savings where you would need the money soon."
"Retirees can choose the term length that best suits their needs, and the interest rates are typically higher than regular savings accounts," says Jake Falcon, founder of Falcon Wealth Advisors.
"The downside is that funds are locked in until the maturity date, so it’s important to plan accordingly."
"There also may be penalties to access funds earlier than the maturity day. So there is liquidity risk," Falcon adds.
CDs are available through banks and brokerages, while credit unions offer a similar product called share certificates.
Also read: Discover the secret to saving $10,000 in just half a year with these 5 simple tricks
They are backed by the US government and can provide steady income, although the return is generally lower than corporate bonds.
"These securities come in various maturities, allowing retirees to tailor their investment strategy to their specific needs," says Falcon.
"There is risk, as the underlying value may fluctuate up or down based on interest rates and other factors."
"Dividend stocks tend to be less volatile than non-dividend-paying stocks," says William Connor, a partner at Sax Wealth Advisors.
Connor notes that income from dividends can help cushion market downturns.
"Dividend growth is one of the few ways to generate a stream of income that will increase over time," he adds.
"This makes them an excellent choice for retirees looking to preserve their purchasing power over time," Falcon explains.
However, Falcon warns that TIPS may not be the best fit for all investors.
"I would use caution in buying TIPS in a brokerage account, as their tax structure is more complex than a traditional bond."
TIPS' inflation adjustments are taxed annually, even if you don’t sell them. This creates what’s known as phantom income.
"Fixed annuities are insurance contracts that provide income for a specified period or for life," Gammon says. "They are popular if you want predictable income."
Gammon suggests reviewing fees carefully and understanding access restrictions.
"But they can be a helpful tool covering basic living expenses in addition to Social Security or a pension."
Also read: Dave Ramsey's urgent advice to 59-year-olds with no savings: why retiring with just your house could be a disaster
These funds invest in high-quality fixed-income securities and insurance contracts.
"These don’t get nearly enough attention," says Neal Gordon, founder of Gordon Wealth Planning.
"They can be a great fit for someone who’s looking for safety but wants better returns than your standard savings account."
"They’re designed to protect principal and deliver steady returns, which can be really reassuring," Gordon adds.
DoubleLine Capital CEO Jeffrey Gundlach recently said there's a 50% to 60% chance of recession.
That risk could hurt retirees most of all, especially if they have to withdraw funds early in retirement.
"It is important to understand that managing risk is essentially a trade-off between the short-term risk of market declines and the longer-term risk of maintaining purchasing power," Connor says.
Take this moment to revisit your portfolio. Consider your allocation and whether you're positioned to weather uncertainty.
These seven investment options could offer peace of mind and stability in unpredictable times.
Have you explored any of these low-risk investments in your own retirement planning? Drop your thoughts, tips, or questions in the comments below—let’s keep this conversation going and help each other make the most of our retirement years.
Read next: 9 effortless jobs to boost your retirement funds starting today!
Market volatility and inflation are leaving many older Americans searching for safe places to grow their savings.
But according to financial experts, there are reliable options that can generate returns without putting your hard-earned money at risk.
1. High-yield savings accounts: Safer than a traditional bank
If you’re looking for a better interest rate without locking away your funds, a high-yield savings account might be the right choice.
High-yield savings accounts offer a safe place for cash while earning a higher interest rate. Image source: Vincent Chan / YouTube
"High-yield savings accounts offer a safe place for cash while earning a higher interest rate than traditional savings accounts," says Chad Gammon, a certified financial planner at Custom Fit Financial.
These accounts are frequently offered by online banks rather than brick-and-mortar institutions.
"But they are still FDIC-insured up to $250,000," Gammon explains.
"These accounts are ideal for emergency funds or short-term savings where you would need the money soon."
2. Certificates of deposit: Secure and predictable
Certificates of deposit, or CDs, are another low-risk option that lets you earn interest by committing your funds for a fixed period."Retirees can choose the term length that best suits their needs, and the interest rates are typically higher than regular savings accounts," says Jake Falcon, founder of Falcon Wealth Advisors.
"The downside is that funds are locked in until the maturity date, so it’s important to plan accordingly."
"There also may be penalties to access funds earlier than the maturity day. So there is liquidity risk," Falcon adds.
CDs are available through banks and brokerages, while credit unions offer a similar product called share certificates.
Also read: Discover the secret to saving $10,000 in just half a year with these 5 simple tricks
3. Treasury securities: Backed by the US government
US Treasury bills, notes, and bonds are widely considered safe investments.They are backed by the US government and can provide steady income, although the return is generally lower than corporate bonds.
"These securities come in various maturities, allowing retirees to tailor their investment strategy to their specific needs," says Falcon.
"There is risk, as the underlying value may fluctuate up or down based on interest rates and other factors."
4. Dividend-paying stocks: Income plus potential growth
Dividend stocks offer a mix of income and the potential for capital appreciation."Dividend stocks tend to be less volatile than non-dividend-paying stocks," says William Connor, a partner at Sax Wealth Advisors.
Connor notes that income from dividends can help cushion market downturns.
"Dividend growth is one of the few ways to generate a stream of income that will increase over time," he adds.
5. Treasury Inflation-Protected Securities (TIPS): Inflation protection
TIPS are government bonds designed to keep pace with inflation. Their principal value is adjusted based on the consumer price index."This makes them an excellent choice for retirees looking to preserve their purchasing power over time," Falcon explains.
However, Falcon warns that TIPS may not be the best fit for all investors.
"I would use caution in buying TIPS in a brokerage account, as their tax structure is more complex than a traditional bond."
TIPS' inflation adjustments are taxed annually, even if you don’t sell them. This creates what’s known as phantom income.
6. Fixed annuities: A reliable income stream
Annuities can be controversial due to their complexity and fees, but fixed annuities are worth considering."Fixed annuities are insurance contracts that provide income for a specified period or for life," Gammon says. "They are popular if you want predictable income."
Gammon suggests reviewing fees carefully and understanding access restrictions.
"But they can be a helpful tool covering basic living expenses in addition to Social Security or a pension."
Also read: Dave Ramsey's urgent advice to 59-year-olds with no savings: why retiring with just your house could be a disaster
7. Stable value funds: Low-risk, steady returns
Often overlooked, stable value funds are commonly available in retirement plans such as 401(k)s.These funds invest in high-quality fixed-income securities and insurance contracts.
"These don’t get nearly enough attention," says Neal Gordon, founder of Gordon Wealth Planning.
"They can be a great fit for someone who’s looking for safety but wants better returns than your standard savings account."
"They’re designed to protect principal and deliver steady returns, which can be really reassuring," Gordon adds.
Why this matters now
The S&P 500 is down 2.9% year to date. That might seem modest, but concerns about the impact of tariffs and unpredictable federal layoffs are making investors uneasy.DoubleLine Capital CEO Jeffrey Gundlach recently said there's a 50% to 60% chance of recession.
That risk could hurt retirees most of all, especially if they have to withdraw funds early in retirement.
"It is important to understand that managing risk is essentially a trade-off between the short-term risk of market declines and the longer-term risk of maintaining purchasing power," Connor says.
Take this moment to revisit your portfolio. Consider your allocation and whether you're positioned to weather uncertainty.
These seven investment options could offer peace of mind and stability in unpredictable times.
Read next: 9 effortless jobs to boost your retirement funds starting today!
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