RETIREMENT safe money

Having recently retired with no mortgage or outstanding debt, I find myself with a substantial amount of money in two checking accounts. I would like to keep the money available for family emergencies but could use some advise as to where it would earn a better interest than what the banks are now offering.

Terry Says:  I agree that you could do better than a checking account — but not much better!  The Fed is keeping interest rates very low, so even money market mutual funds pay only a minimal amount.  First, you should analyze all your investments (including your retirement plan accounts) to see if you have appropriate exposure to stocks, which should grow over the long run and are needed to keep up with inflation.

If you’re a long-time reader, you know I have nothing against “chicken money” — and as you retire, a larger nestegg of safe investments is appropriate.  Once you have the balance between risk and reward correct, you need the discipline to accept that this part of your nestegg must remain in safe, low-yielding investments. Don’t get antsy!

Here’s where to look for safe alternatives:  Go to www.Bankrate.com  to find the highest yielding CDs, money market funds, or short-term safe alternatives.  Go to www.TreasuryDirect.gov to invest directly in Treasury bills ($100 minimum, and it’s easy online).  Special note: if you have a LOT of chicken money you don’t have to be worried about being over the insured limit when you buy treasury bills direct from the government.  (For the limits on FDIC insurance see the link on the home page at TerrySavage.com.)