3 smart money moves seniors should make now
As the economy continues to struggle with high inflation and the Federal Reserve continues to fight it with higher and higher interest rates, many Americans are currently looking for ways to safeguard and grow their money. With borrowing costs elevated for everything from mortgages to credit cards to refinancing, there aren't many attractive options right now, and the ones that do look beneficial need to be approached carefully.
For seniors and older adults, many of whom may be living on a tight budget made up of retirement savings, Social Security and pension funds, all financial investments need to be scrutinized closely to ensure that the benefits outweigh the costs. Fortunately, even in today's inflationary environment, there are still some money moves seniors can make to both protect their existing funds and grow them further.
3 smart money moves seniors should make now
Here are three money moves seniors should explore now.
Open a CD
A CD has historically been known as a way to protect your money. Unfortunately, in recent years it's also been known for its barely-existent interest rates, too. But that's changed in the past year and a half as the Federal Reserve has bumped up its benchmark interest rate. In fact, while rates on CDs were under 1% just a few years ago, they're now hovering close to 6%, particularly if you use an online bank. Some savers may even be eligible for a CD with a 7% APY. That's a significant amount of money that can be earned by simply depositing some funds into one of these accounts today. Compared to the 0.46% being offered on regular accounts, there's a compelling case to be made that you're actually losing money by not making the switch to a CD today.
That all being said, these high rates won't last forever. When the economy stabilizes and inflation cools again, returns on these accounts will soon follow. That's why it makes sense for many seniors to act now, while inflation is still stubborn and CD interest rates are still high.
Get started with a top-earning CD here now.
Open a high-yield savings account
A high-yield savings account also comes with a high interest rate currently, but it won't have the same restrictions that a CD with its locked rate and early withdrawal penalties does. In reality, a high-yield savings account operates just like a regular savings account does, albeit with higher interest rates.
That said, rates on these accounts are variable. So, right now you'll earn a great return and, in a few weeks, if the Federal Reserve raises interest rates yet again (as many are forecasting), your rate will rise with it. But if rates stabilize after that or, if they eventually drop in 2024, your variable high-yield rate will follow suit.
That's why it makes sense to open one now to take advantage while rates are still high. While rates on high-yield accounts aren't quite as high as they are for CDs, it's still possible to find one in the 5% range online right now.
Start exploring your high-yield savings account options today to see what you could qualify for.
Review your investments
Let's face it: The returns on your investments haven't been great in the last year or so. Stocks and bonds can provide some major benefits, but they can also be volatile, and the earnings you receive today could be wiped out tomorrow. And with geopolitical tensions on the rise, inflation still stubborn and interest rates higher than they've been in decades, there's no clear insight into when your investments will start earning steady returns again.
With this understanding, it makes sense to do a deeper dive into your current investments to see where you could potentially shift things around. In 2023, many have turned to gold. In fact, gold investing hit an 11-year high in September, and it's not hard to understand why. The yellow precious metal can provide a buffer against inflation and can serve as a portfolio diversifier (in the right amount). Sure, gold may not be right for every type of investor but it's at least worth investigating now, if only to help keep your other investments afloat during turbulent times.
Explore all of your current gold investing options here today to learn more.
The bottom line
With the economy uneven at the moment and the prospect of relief uncertain, Americans may be looking for ways to boost their financial protections - and their bottom line. For seniors, in particular, whose income-producing options may be limited, it's worth exploring these money moves now. By opening a CD, a high-yield savings account or both, you could actually benefit from today's high rates while still keeping your principal secure. And it's always smart to review your investments, but especially so now, when many have turned to alternatives like gold to help boost their overall portfolio. Just make sure to view these moves from your own personal financial perspective, as they will be more beneficial for some seniors and older adults than they will for others.
