Saving During Retirement Means Maximizing Returns on Your Fixed Income - Assisted Living and Retirement Newsletters

Saving During Retirement Means Maximizing Returns on Your Fixed Income
By James S. Furash
July 31, 2009

There is a wealth of information, guidance and advice about the importance of saving for retirement. Experts have pointed out that most Americans will live at least 20 years in retirement and the amount of adequate savings to live a comfortable lifestyle is estimated to be about half a million dollars. This is good information to keep in mind during retirement planning. But, what happens after retirement when you are living on a fixed income? How can you save during retirement?

Many individuals 60 and older focus on preserving their assets. Once on a fixed income you can easily calculate how much money you can spend each month. You may also find ways to cut expenses and stretch the purchasing power of your income. Being conscious of your spending is a great idea, but it's only one side of the coin.

Retirees can and should look beyond preserving assets, and look for ways to maximize their investments. This is especially important if you have followed the most common retirement planning advice and invested upwards of 80 percent of assets in cash instruments and fixed-income assets.

There are several ways to maximize retirement income, or, in other words, there are techniques for saving during retirement. And one of the safest methods is using a strategy called, Certificates of Deposit Laddering.

Certificates of Deposit (CDs) are stable, principal-protected investments that offer a guaranteed return, making them ideal investments for seniors. With a CD Laddering strategy, you invest in several CDs with different terms, benefiting over time from the higher yields of longer term CDs without sacrificing liquidity or periodic access to your money. In short, investing in longer term CDs can help maximize returns, which is particularly important when you rely on a fixed income.