Guest Post: Investing Simplified for Senior Citizens

Investments for senior citizens are no different than those made by a person of any age; however, it may be in their best interest to make investments with low risks since many are retired and are on a fixed income.  Here are some typical investments:

Stock Investments- You buy an equity ownership interest in a publicly traded companies. The price of a stock can fluctuates; as it fluctuates investors either make or lose money on their initial investment.  Stock prices can be unpredictable and risky but has the potential for very high returns if you invest smartly. Some stocks also pay dividends, although the amount of the dividend can be changed by the company.

Stock Mutual Fund Investments- You choose a manger and they invest your money into diversified set of assets. Mutual funds are available for stocks, bonds, short-term money market instruments, and other securities. A mutual fund can less risky than investing in a single or small number of companies due to diversification. However, fund fees can reduce the total investment return.

Savings Deposit Investments- Deposits you make into your savings account with your bank.  Money must be moved into your checking account for use.  While in your savings account, your bank pays you interest based on current interest rates and your money is insured by the FDIC up to $250,000 per despositor, per insured bank.

Certificate of Deposit Investments (CD)- You deposit a fixed amount of money for a fixed amount of time into account with a bank or thrift institution.  Once the maturity date is met, your bank pays you back your initial investment plus any interest you accrued. Bank CDs are also often covered by FDIC insurance.

Treasury Bill Investments (T-Bills)- Short-term debt sold by the U.S. Treasury, usually at a discount from the par amount, i.e. amount the bill will be worth upon maturity. For example, you might buy multiple bills for $98 and get $100 for each when the bills mature at a later date; the lowest bill you can buy is worth $100 upon maturity. Treasury Bonds are longer-term debt sold by the U.S. Treasury for periods up to 30 years. The Treasury also sells Treasury Inflation Protected Securities (TIPS) which have feature and adjustable coupon payment based on the changes to Consumer Price Index.

Money Market Account (MMA) or Money Market Deposit Account (MMDA) Investments- A deposit account offered by banks.  Upon deposit, your bank will invest your money into government and corporate securities. You will be paid interest based on current money market rates of interest.

Money Market Mutual Fund Investments- A deposit fund offered by brokers who invest your money in short-term government and corporate debt securities. This investment is very similar to MMAs except that they are through a broker and not insured; they are more risky than MMAs, but you may receive a higher rate of return on your investment.

Below is an easy to read chart for senior citizens; it lists general details about these investment types.

Shannon Paley is a guest post and article writer bringing to us her simplified explanations on investments for senior citizens. She writes about nursing home abuse for nursinghomeabuse.net.


Note: please see the Disclaimer on the right side of this website. Before considering any investment you are encouraged to consult with a professional investment advisor.