What are my investment options in retirement?

1 min readLast updated February 23, 2024by Rachel Carey

This article will take you through what you need to consider when making investments in retirement, including your investment options and your evolving relationship with risk.


  • Maintaining and diversifying your investment portfolio helps you reduce the common risks associated with retirement planning.

  • According to the Unbiased Retirement Confidence Survey, inflation and its impact on savings are among Americans' biggest concerns when planning for retirement.  

  • When you retire, you need to look at your investment portfolio differently, as the investments you made in your 40s and 50s might not be suitable for this stage of your life.

  • financial advisor can help you with your retirement planning and create a plan that will help you reach your retirement goals.

Why should I invest in retirement? 

When you think of retirement, what do you imagine? Are you spending more time with the grandkids? Perhaps you’re taking that cruise you’ve always dreamt of? Or maybe you’re finally getting a chance to spend time working on your favorite hobby.  

Planning for retirement?

A financial advisor can build a retirement plan tailored to you.

To make this a reality, you need to have your finances in order.  

Unfortunately, countless risks can eat away at your hard-earned savings in retirement. Retirement planning requires you to think multiple steps ahead. 

According to the Unbiased Retirement Confidence Survey, nearly 60% said inflation’s impact on retirement savings was their biggest concern when it comes to retirement planning.

Unexpected healthcare expenses and longevity weren’t far behind, with 56% and 41% of respondents, respectively, noting them as one of their top concerns.    

Maintaining your investment portfolio and, better still, diversifying your investments is one way to reduce these risks.  

What type of retirement investment options should I choose? 

Investments are all about the risk and return relationship

At the start of your investment journey, high risk can lead to high returns. If the market falls, you also have more time to recover.

However, in retirement, your risk appetite tends to reduce. As your time to recover is limited a market downturn could spell disaster for your income. 

When managing your investment portfolio in retirement, adding more low-risk options is a sensible move.  

Thankfully, there are numerous low-risk investment options to choose from.  

Four low-risk investment options for retirement  

  • Bonds  

Bonds are a type of loan. They are issued by governments or corporations when they want to raise money.  

The bond will include the loan terms, interest payments, and the date when the loaned funds – the principal – must be paid back. 

The interest payment is known as a coupon and is part of the return that bondholders earn for lending their funds to the issuer. The issuer will agree to repay the loan's value by a specific date alongside interest payments, usually twice a year.  

There are four different types of bonds: corporate bonds, municipal bonds, government bonds, and agency bonds. You may also come across foreign bond types issued by global corporations. 

What are the pros? Bonds have a high interest rate during times of inflation.  

What are the cons? How much you can invest is limited, and there is a penalty for early withdrawal. 

  • Certificates of deposit (CDs)  

A certificate of deposit (CD) is a savings product that holds a fixed amount of money for a specified time. After this time is up, , you will receive your initial invested amount plus interest when you redeem your CD. 

Banks and credit unions usually offer CDs. They are a good way to grow your money, provided you leave your deposit untouched for a set period of time.  

What are the pros? CDs may offer higher interest rates and are considered a safe and secure way to grow your money.   

What are the cons? Most CDs impose penalties for early withdrawals. They also may struggle to keep up with the pace of inflation.   

  • High-yield savings accounts  

These federally insured savings products earn higher rates than the national average – up to 10 or 12 times.  So, they allow your money to grow faster over time than an average savings account.    

Your bank or credit union may offer these accounts. In recent years, with the growth of online banking, competition between providers has increased, leading to better rates for consumers. 

What are the pros? Interest rates are often higher with these accounts. It also compounds over time.   

What are the cons? While interest rates are high, they can fluctuate over time. You can also make limited withdrawals before being hit by fees.   

  • Annuities

An annuity is a contract between you and an insurance company whereby the insurer provides a guaranteed income stream in exchange for money paid into the annuity. 

You can pay this money as a lump sum or in regular installments over time. This money grows tax-deferred, so you will only pay income tax when you withdraw.  

When withdrawing from your annuity, you can choose to receive monthly payments for a set period of your lifetime or a lump sum payment.  

People often invest in annuities as part of their broader retirement strategy. For example, you may buy an annuity to supplement your traditional retirement account, such as your 401(k) or IRA. 

What are the pros? There are many advantages to having an annuity, including predictability, security and simplicity.  

What are the cons? Your income from an annuity may be smaller than you could achieve by another method. 

Get expert financial advice

When deciding how to diversify your investment portfolio in retirement, it’s wise to speak to a qualified financial advisor.

They can help you navigate the risks and rewards of investing and put your interests first. 

Unbiased can match you with your perfect financial professional. 

Get started today.

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Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.

Planning for retirement?

A financial advisor can build a retirement plan tailored to you.