7 High-Return, Low-Risk Investments for Retirees

Retirement doesn’t have to mean living with tiny returns or big risks. The truth is, there are investments out there that can grow your money steadily while keeping it safe. These 7 high-return, low-risk picks can help you protect your nest egg and sleep easier at night.

A money market fund is a mutual fund that invests in low-risk securities. For example, a money market fund might invest in municipal debt, corporate bonds, or Treasury bills. They're safe, stable, and allow you to access your money in an emergency.

Not to be confused with the money market accounts (MMAs) typically offered by banks and credit unions, money market funds are not FDIC insured. Instead, they're an investment product sold through brokers. Still, due to what they're invested in, money market funds are one of the safer investment options available.

Nothing could be simpler right now than earning money with a high-yield savings account (HYSA). Like a traditional savings account, a high-yield account is FDIC-insured. The big difference is that the annual percentage yield (APY) for an HYSA tends to be about 10x higher than a traditional savings account.

Some traditional banks and credit unions offer HYSAs, but the highest rates are typically found with online-only banks, due to their low overhead costs.

Don't let your money sit idle in a low-rate checking account. Compare today's top high-yield savings accounts and start earning more.

Certificates of deposit (CDs) are having a moment in the sun, with rates around 4%. While we can't count on CD rates to remain elevated, they're currently a great way to guarantee yourself a decent return for a term ranging anywhere from three months to five years (and sometimes more).

In exchange for the high rates, you agree to leave your money in the account for that specified period. Since an early withdrawal typically results in a penalty fee, it's a good idea to only invest money you don't expect to need until the CD matures.

See the best CD rates available and lock in today's rates before it's too late.

When you invest in a stock that pays dividends, the company rewards you by making regular payments based on the income generated by the business. That's not to say dividends are guaranteed. For example, if a dividend-paying company experiences earnings losses, it may temporarily lower or suspend dividend payments.

While the term "safe" is relative, one thing that makes dividend stocks attractive is that they're normally offered by larger, more mature companies. While newer, smaller companies must reinvest their profits, larger, proven companies are in a better position to pay dividends.

An annuity involves a contract between you and an insurance company. There are two types of annuities: income annuities and tax-deferred annuities. In short, you invest a specific amount of money in an annuity, and you're contractually guaranteed payments in increments that may be monthly, quarterly, or yearly.

Don't rush into an annuity. You'll need to find out about fees, including commissions, paid to the salesperson. Also, look at surrender charges or other penalties that may be levied. Finally, look into the financial health of the insurance company selling the annuity. You want evidence that the company will be in a position to keep paying you.

As the name implies, ultra-short fixed-income exchange traded funds (ETFs) are bond funds that invest in fixed-income investments with maturities of less than one year. While ultra-short fixed-income ETFs tend to offer a higher yield than other short-term investments, they're designed to offer lower risk from changing interest rates.

A Treasury bond is a form of government debt. When you invest in a Treasury bond, you loan money to a government body, which uses the money to carry out public works. Treasury bonds are currently offered with maturities of 20 or 30 years and pay simple interest every six months until they mature.

If you're concerned about finances in retirement, now is a good time to learn more about financial literacy and outline what it will take to create your ideal retirement.

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