5 Options to Reduce Investment Risk in IRAs Read Newsmax: 5 Options to Reduce Investment Risk in IRAs
February 1, 2019 by Ken Nuss
People approaching or in retirement should not have an over-weighted stake in equities. If you need to reduce risk in your IRA and/or Roth IRA, what are the best ways to do it?
A bank certificate of deposit (CD) is a reasonable choice. But a fixed-rate annuity can be an even better choice.
Both CDs and fixed annuities let you protect your savings from market risk, earn a set rate of interest and guarantee your principal. But fixed-rate annuities have the edge because they usually pay substantially more than a CD with the same term.
For instance, you can buy a five-year annuity that pays a 4.00 percent annual rate. The top five-year CD pays 3.15 percent: 21.3 percent less interest.
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