5 ways seniors can boost their savings now
Life happens, no matter what your age is. And when life happens, unexpected expenses can occur in tandem. What that means is that even as a senior, you need savings. Then again, saving comes with unique challenges for seniors.
After all, most seniors live on fixed incomes. Moreover, they need safe places to store their savings, as they can't afford to take risks they may have in the past.
If that sounds like you, you may be at a loss when it comes to ways to boost your savings. But rest assured, it is possible to build a comfortable safety net — even in retirement.
Open a high-yield savings account today to earn more on your idle cash.
5 ways seniors can give their savings a boost
Maybe an emergency expense has popped up and you had to dip into your savings. Or, maybe you're just not happy with the amount of money in your savings account. Here are five things you can do to give your savings a boost.
Open a CD
The Federal Reserve has been consistently increasing interest rates since 2022, and, in turn, certificates of deposit (CDs) are offering impressive returns at the moment. That makes these unique savings vehicles a compelling option for seniors. That's especially the case with short-term options available at well over 5% annualized returns.
"There are many benefits to investing in a certificate of deposit. CDs provide a higher interest rate compared to regular savings accounts. What this means is that by investing in a CD, you can earn more money on your savings over a fixed period of time," says Doug Roller, investment advisor representative and owner of Crossroads Financial Group in Fort Wayne, Indiana.
"CDs are considered low-risk investments. They are typically offered by banks and are insured by the Federal Deposit Insurance Corporation (FDIC)." So, "even if the bank fails, your investment is protected up to a certain amount," Roller says.
Open a CD now to lock in today's high interest rates.
Open a high-yield savings account
Traditional savings accounts were, for lack of a better term, the "traditional" way to save money you needed fast access to. Unfortunately, these savings accounts pay minimal interest, even in today's high-interest environment.
The good news is that high-yield savings accounts offer impressive rates. Right now, it's easy to find accounts with APYs over 5%. That's impressive considering the average traditional savings account APY is under 1%.
Find ways to cut costs
One of the reasons you may find it difficult to save is that you're on a fixed income. Nonetheless, if you can't push your income upward, why not see what you can do to bring costs down. Some ways you can cut costs to make room for savings without making sacrifices include:
- Stop paying for cable and opt for low-cost streaming services instead.
- Take advantage of senior discount programs.
- Take advantage of free loyalty programs.
- Pay car insurance annually to save on your premiums.
- Go to the library instead of buying books and magazines.
- As service providers to reduce your bills. The worst thing they can say is "no", but they often say "yes."
Establish savings goals
It's often easier to find a way to save when you have a realistic goal in mind. Your savings goals should be attainable and challenging. This way, it's possible to reach your goals, and when you do, a feeling of accomplishment comes along with it — giving you the drive to continue saving.
Automate your savings
It can be easier to save when you don't have to think about doing it. Today's saving solutions make it easy to put savings on autopilot by automatically transferring money from your checking account to your savings account at a predetermined time every week or month.
This means you can automatically send money from your checking account to your savings account as soon as your Social Security, pension, and other benefit payments come in.
The bottom line
There are several reasons why seniors should have a savings account and countless reasons you may want to bolster yours. Although boosting your savings may seem like a cumbersome process, it's likely easier than you think. Establish savings goals, take advantage of secure savings vehicles that offer reasonable returns, find ways to cut costs and automate your contributions to bring your savings to new levels.
