Strategies For Getting More Returns With Less Risk

The stock market may be a traditionally good place to park some investments over the long term, but in the short term its volatility has been more than a bit of a turn-off to people getting closer to retirement age. But if you need to do some catching up -- maybe you lost a lot during the recession, or maybe your income just hasn't been very good until now -- you need to get better returns than just sitting on your money in a low-yield savings account. There are options out there that don't get that much publicity, though, and these may be better choices for you.

Savings Bonds

Savings bonds are well-known, but they have a reputation of being something that parents or grandparents buy for their kids and grandkids. But you can use savings bonds as potential investment vehicles because the interest is generally decent, and the bonds themselves are stable. They are available in different denominations and time periods, so if you'd like to add a few smaller investments to your portfolio, sign up for a few bonds with different terms and amounts.

Peer-to-Peer Lending

These are loan programs where you loan money to people in smaller amounts, and they pay you back with interest. You do have to be careful choosing the people to whom you lend money, and you definitely need to go through a reputable loan platform (do not try to do this yourself!). But if you choose wisely and get paid back in full with interest, you can reach returns in the high single digits or low double digits.

Fixed Annuities

This is a stable investment for larger amounts, and they are often available from companies such as insurance agencies. The interest rates might not be that hot, but they're usually better than what you'd get from basic bank accounts, and the accounts are so sound (if you get them from a company that's nowhere near ready to fold) that the returns can be worth it. You can place a lot of money in fixed annuities, making those lower interest rates pay out rather well, too.

Another advantage to fixed annuities is that you can often leave them sitting for as long as you need to, rather than approaching a deadline for withdrawals or renewals that trap the money in the account.

As you get closer to retirement age, you need to speak with good investment consultants and counselors to make sure you're on the right track. The consultants can keep you up to date on interest rates and new options that can help you build a solid retirement portfolio. To learn more, contact a company like Alpha Squared.