Money Market and Retirement

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Are money markets good for retirement accounts?

Money Market and Retirement

As you get closer to retirement age, you have less and less time to create an income that makes up for losses suffered within your retirement account. Sometimes that means that the losses you sustain are permanent and you're not able to gain those monies back.

This cold reality brings many seniors to the conclusion that they should sell their riskier investments while they're ahead and leave the proceeds in cash so that they're not at risk for a loss. But leaving proceeds in cash is not wise either. Since you don't know how long you'll live post-retirement, you need every bit of growth you can get, and that's why many seniors compare money market rates and utilize a money market for their cash. With a money market deposit account, you can enjoy some growth, FDIC insurance up to $100,000 ($250,000 until 2013), and a low-risk investment.

If you would prefer to keep your funds in your IRA, you can always choose a money market fund to purchase within your IRA. You'll enjoy the same low-risk, minimal growth as a money market deposit account.



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