80-Year-Old With $250,000 Nest Egg Asks Dave Ramsey Where To Keep It Safe — He Suggests This Investment For 'Peace,' But It Doesn't Pay Much

When Juliet from Greenville, South Carolina, called into "The Dave Ramsey Show,: she and her husband faced a financial crossroads. Their $250,000 certificate of deposit had matured, and they were uncertain about the next step. At 80 years old, they weren't keen on diving into the stock market's turbulent waters; their primary concern was safeguarding their hard-earned savings.

The CD Dilemma: Safety vs. Returns

Juliet's predicament is a common one among retirees: balancing the desire for financial security with the potential for higher returns. CDs are known for their safety, offering a fixed interest rate over a specified term and being federally insured up to $250,000. However, this security often comes with modest returns.

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Dave Ramsey's counsel was straightforward: "I would go right back and renew that CD." He acknowledged the trade-off, stating, "It doesn't pay very much; it's not a very good long-term investment, but it gives you a lot of peace." For Juliet and her husband, peace of mind outweighed the allure of higher yields.

Current CD Rates and Considerations

As of this month, CD rates vary based on term lengths and financial institutions. According to Bankrate, the best CD rates still earn above 4% annual percentage yield, providing a reliable return for those prioritizing capital preservation. While some institutions might offer slightly higher rates, Ramsey cautioned against chasing marginal gains at the expense of trust and familiarity. "If you got six but you were dealing with people you didn't know and trust like your credit union… again, this is about sleeping well at night," he emphasized.

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Playing It Safe Without Missing Out

Navigating financial decisions in retirement can be complex. Consulting a financial advisor can provide personalized guidance tailored to individual circumstances. An advisor can assess factors like risk tolerance, financial goals, and market conditions to recommend suitable investment options. For those, like Juliet, who prioritize safety, an advisor might suggest laddering CDs—a strategy involving multiple CDs with varying maturities—to enhance liquidity and yield.

While CDs offer security, they aren't the only option for conservative investors. High-yield savings accounts, for instance, provide flexibility with competitive interest rates. Treasury securities are another alternative, backed by the U.S. government and offering various term lengths. It's essential to evaluate the pros and cons of each option, considering factors like accessibility, interest rates, and potential penalties.

See Also: If You're Age 35, 50, or 60: Here’s How Much You Should Have Saved Vs. Invested By Now

Building a Legacy Through Conservative Investing

For retirees not reliant on their savings for daily expenses, there's an opportunity to invest with future generations in mind. Ramsey pointed out, "They very likely are doing their investing for the next generation at 80 years old." By choosing stable investments, retirees can preserve their principal, ensuring they leave a financial legacy for their heirs.

Financial decisions in retirement are deeply personal and should align with one's comfort level and objectives. As Ramsey wisely noted, "The best investment isn't always about the highest return—it's about what lets you sleep at night." Prioritizing peace of mind, especially in one's golden years, is invaluable. Whether opting for CDs, high-yield savings accounts, or other secure investments, the goal is to find a balance between safety and satisfactory returns.

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