Baby Boomers Should Sink Their Money in T-Bills and HYSAs Before a Market Collapse

The “buy the dip” financial news teleprompter readers and the 35-year-old portfolio managers who have never seen a market crash are pounding the table that stocks are still going to the moon. Market veterans and “Hey Boomer” professionals have seen this show before. In 1987, the Dow Jones industrials plunged a stunning 22% in one day. Today, an equivalent drop in the venerable index would be almost 9,400 points. We got a glimpse of what may be coming later this year in February, and it could get ugly. Very ugly.

From 1929 to 1932, the stock market plummeted a stunning 83%, and many lost everything. That debacle caused the Great Depression, which ended only when we entered World War II in 1941.

From 2007 to 2009, during the height of the mortgage and real estate collapse, which brought us dangerously close to another depression, the market dropped a massive 57%. When stocks finally bottomed at an ominous intraday low of 666 on the S&P 500 on March 9, 2009, we placed the floor for the longest bull market in history, which ended in January 2022. The market rally promptly started back up in October of that year after a swift correction and continues to this day.

Though devastating, a market crash, or severe correction, is workable if you are in your 40s and making peak money. However, for baby boomers who have enjoyed unprecedented gains over the past 35 years, being overweighted to the stock market now is like picking up nickels in front of a bulldozer, and it could be a fatal shot to their retirement savings. Look at this data we collected on the effect of major market crashes. The recovery time can be much longer than recessions or regular bear markets, sometimes taking decades:

• The 1929 crash lasted until 1932, and the Dow did not fully recover until November 1954.
• The dot-com stock correction/crash in March 2000 took 13 years to recover fully.
• The Panic of 1907 took the stock market 20 years to return to its pre-crash level.

The youngest baby boomers turned 60 last year, while the oldest are closing in on 80 in 2026. Moving most of your investments out of S&P 500 index funds and concentrating on ultra-safe investments with the principal protected and guaranteed makes sense now with the stock market resting at a vulnerable precipice. This is what LPL Research noted in January regarding market corrections:

With the stock market nearing record-high levels, it might seem premature to talk about a potential correction — characterized by a market drawdown of 10% or more but less than 20%. However, bull markets are not linear, and corrections, though relatively improbable, are always possible. According to our friends at Ned Davis Research, a correction has occurred every 1.1 years going back to 1928. Furthermore, the last time the market entered an official correction was 309 trading days ago, spanning well beyond the average number of 173 trading days without a correction since 1928.

The bottom line for baby boomers and retirees who cannot afford a big market correction or, God forbid, a crash, is that now is the time to move a substantial amount of assets to guaranteed investments. We focus on options that prioritize structural protection and absolute liquidity. We purposely avoided traditional certificates of deposit (CDs) as while some do pay monthly, the longer-dated CDs offered by many banks will charge a penalty for an early withdrawal of funds, so if you have an emergency and have to get at your money, you may receive less back than you put in. Make sure the terms are clear if you opt to buy one.

Exchange-Traded Treasury Bill Funds

Unlike open-end mutual funds, exchange-traded funds (ETFs) trade on major exchanges like stocks. They own financial assets such as stocks, bonds, currencies, debts, futures contracts, and commodities such as gold bars. One massive advantage ETFs have is that they can be bought or sold anytime the markets are trading. In addition, there is a large market and demand from investors for exchange-traded funds.

One of the funds we highly recommend at 24/7 Wall St. is the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE: BIL). The fund invests substantially all, but at least 80%, of its total assets in the securities comprising the index and in securities that the adviser determines to have economic characteristics substantially identical to the financial characteristics of the securities comprising the index. The index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to 1 month and less than 3 months. Alternate institutional options providing similar ultra-short duration exposure include the iShares 0-3 Month Treasury Bond ETF (SGOV) and the US Treasury 3 Month Bill ETF (TBIL).

The State Street website says this when describing the fund:

• The SPDR Bloomberg 1-3 Month T-Bill ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg 1-3 Month U.S. Treasury Bill Index
• Seeks to provide exposure to publicly issued U.S. Treasury Bills that have a remaining maturity between 1 and 3 months
• Short duration fixed income is less exposed to fluctuations in interest rates than longer duration securities
• Rebalanced on the last business day of the month

Investors need to know that the price of short-duration treasury ETFs will fluctuate slightly as monthly interest accrues and is paid out. With tiny expense ratios and daily liquidity, these funds are optimized for capital preservation.

Alternative Defensive Strategies: Yield Generation via Cash-Secured Puts

For capital preservation, investors can also look beyond simple passive vehicles toward income-generating derivatives. Selling out-of-the-money cash-secured puts on highly liquid index ETFs or blue-chip equities allows retirees to generate consistent premium income while their cash collateral sits safely in short-term yields. If a sharp market correction occurs, this methodology forces the acquisition of quality equities at a significant, predetermined discount rather than exposing the baseline portfolio to unhedged market downsides.

High-Yield Cash Management and FinTech Sweeps

A high-yield savings account (HYSA) or cash management account is an investment that aims to generate income while keeping the principal relatively stable and liquid. It is considered a low-risk investment and can have higher interest rates than standard institutional checking accounts. Modern cash management frameworks frequently utilize FinTech cash sweep programs.

These programs automatically distribute underlying capital across a distributed network of partner banks, effectively multiplying standard FDIC insurance limits far beyond the base $250,000 threshold to protection levels up to $2 million or $5 million. Best of all, you can withdraw cash from these accounts without early withdrawal penalties while generating monthly yield distributions.

The 5 Highest-Yielding Monthly Dividend Stocks Deliver Gigantic Passive Income Streams

Editor’s Note: This article has been updated to incorporate contemporary market valuations, trailing equity performance metrics, and current macroeconomic benchmarks. The updated text removes static historical percentage yields in favor of a structural analysis of cash sweep programs, introduces institutional alternative funds including SGOV and TBIL, and expands the defensive frameworks to include options-based cash-secured put yield generation.