Retirement Saving: Where to Invest in a Shaky Economy

Many baby-boomers are nearing retirement but can't retire because frankly they don't have enough money to retire. The old buy and hold strategy when investing in mutual funds or stocks hasn't paid-off the past decade.

The major stock indexes were down this year and the S&P 500 was in bear market territory (intra-day) just last week. Thankfully the markets rallied 10% the past seven days but if you're a buy and hold investor you're still down for the year.

The safest investments always have lower investment returns than the riskiest. Deposit yields on savings accounts and certificates of deposit are rather pathetic and have been the past couple of years.Current national average savings account rates are at 0.20% and 1 year average CD rates are at 0.44% as reported by MonitorBankRates.com. The only investment yield that is even more pathic are U.S. Treasury yields.  

You can find rates higher than the averages but not much higher. The best national 12 month CD rates right now are from Discover Bank at 1.14%, Aurora Bank at 1.11% and Ally Bank at 1.08%. The best savings account rates nationally right now are at American Express Bank at 1.00%, Ally Bank at 0.94% and Aurora Bank at 0.92%.

Yes, deposit rates are low right not but at least your principal and interest earned is 100% safe as long as you invest in CDs that are insured by the FDIC. The deposit amount is only insured for up to $250,000.

Of course you can earn more investing in mutual funds or stocks but you are at risk of losing some or all of your principal. The closing you get to retirement the less risky your investments should be.

The final decission on where to invest your money is of course up to you. If you're unsure of what to do the best thing to do is get a financial advisor, one that you can trust. A good place to start is finding a CFP Professional at CFP.net.