5 Investments for Retirees and Examples of Portfolios

Choosing investments for retirement means finding the right balance between safety and growth. You want a mix that can handle market ups and downs while giving you steady income. Since there’s no one right answer, a financial advisor can help you build a plan that fits your goals, risk level and income needs.

When planning for retirement, it’s important to prioritize financial stability, predictable income and protection against inflation. The best types of investments for retirees tend to focus on capital preservation and income generation, with less exposure to high-risk assets. That doesn’t mean retirees need to avoid growth altogether — some allocation to equities can help to keep up with inflation and extend the life of an investment portfolio. The key is finding the right balance.

Here are five investments that retirees may consider adding to their portfolios.

Bonds are a cornerstone of retirement investing due to their relative stability and consistent income. In simple terms, bonds represent loans made to governments or corporations. These loans pay interest, known as a coupon, until they reach maturity and repay the principal. Retirees often favor high-quality, investment-grade bonds, including municipal bonds (which may offer tax advantages) and corporate bonds with strong credit ratings.

Certificates of deposit (CDs) are time deposits offered by banks and credit unions that typically pay a fixed interest rate over a specified term, such as six months, one year or five years. The FDIC insures CDs up to $250,000 per depositor, per institution, making them one of the safest ways to earn interest on cash.

For retirees who value security and predictability, CDs can be a useful tool, particularly when used in a CD ladder strategy. This involves staggering multiple CDs with different maturity dates, providing ongoing access to funds and potentially higher yields than a traditional savings account.

While stocks carry more risk than bonds or CDs, dividend-paying stocks can offer a blend of income and growth potential. Companies with dividend payouts often have strong fundamentals and consistent cash flow, making them attractive to retirees seeking ongoing income with the chance for capital appreciation.

Sectors like utilities and healthcare are popular among dividend investors due to their relative stability. Retirees may choose to hold these stocks directly or invest through dividend-focused mutual funds and ETFs, which offer built-in diversification and reduce the risk tied to any single company.

TIPS are U.S. Treasury bonds designed to protect against inflation. The principal value of a TIPS bond adjusts based on changes in the Consumer Price Index (CPI), which aims to preserve your purchasing power even when prices rise. Interest payments are applied to the inflation-adjusted principal, providing increasing income over time in an inflationary environment. TIPS are a strong addition to a retirement portfolio because they offer government backing, inflation protection and tax deferral until maturity.

Standard U.S. Treasury securities — including Treasury bills, notes and bonds — are considered some of the safest investments in the world. Issued by the federal government, they are backed by the full faith and credit of the U.S. government and come in varying maturities to meet different time horizons.

For retirees, Treasury securities can offer peace of mind and predictable returns. Treasury bills mature in one year or less and offer short-term flexibility, while notes and bonds provide longer-term income. They can be purchased directly from the U.S. Treasury via TreasuryDirect or through brokerages.