As retirement approaches, many baby boomers shift their financial focus. Instead of aggressive growth, retirees are more interested in protecting the wealth they have spent decades building. Due to market volatility, inflation, and economic uncertainty, maintaining retirement savings is just as important as growing them. While no investment is completely risk-free, several options are designed to be low-risk, providing investors greater control, reliable income, and easier access to cash. For retirees and near-retirees looking to reduce risk without leaving all of their money sitting in a savings account, these options may lead to a more stable financial future.
This post was updated on May 13, 2026.
U.S. Treasury Bonds
Look at the short end of the Treasury market. The two-year note, like all Treasury debt, is guaranteed by the full faith and credit of the United States and yields a solid 4%. Short-term Treasury bills have also recently yielded 3.66% to 3.74%. Note that shorter government debt of a year or less is bought at a discount and matures at full value instead of paying interest. Baby boomers can buy Treasury bills and bonds through banks and brokerage firms.
Certificates of Deposit
Certificates of deposit (CDs) are insured by the Federal Deposit Insurance Corporation (FDIC), an independent agency that protects deposits in U.S. banks and other financial institutions. The FDIC insures up to $250,000 per depositor per insured bank. In other words, you can have multiple CDs at different banks, each of which has up to $250,000 in insurance.
Some one-year CDs currently offer rates around 4.10-4.20%. Longer-term CD yields range from 4.00% to 4.80% with a minimum deposit of $500. It is essential to note that if you have an emergency and need to access your money, you may lose some earned interest or face penalties for early withdrawal. Baby boomers will want to make sure the terms are clear when they purchase one.
High-Yield Money Market Funds (HYSA)
A high-yield money market fund, or high-yield savings account (HYSA), 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 savings accounts. Money market funds invest in short-term securities, such as government securities, commercial paper, and corporate debt.
They are intended to be safe and not lose value. Best of all, you can withdraw cash from a money market fund without penalties. In addition, they pay interest monthly and are insured by the FDIC up to $250,000.
Here are the rates from some well-known companies that we recommend:
- American Express High Yield Savings – 3.20%
- PNC Bank High Yield Savings – 3.25%
- CIT Bank Platinum Savings – 3.75% on balances of $5000 and more
Open-End Mutual Funds
An open-end mutual fund is a type of investment fund that allows investors to buy or sell shares at any time, based on the fund’s current net asset value. Essentially, this means new shares are created when investors want to buy in, and shares are redeemed when investors want to sell out. This provides continuous liquidity, unlike closed-end funds with fixed entry and exit points, making open-end funds highly accessible for investors to enter and exit as needed.
Both closed-end and open-end funds are widely used investment structures. Closed-end funds trade on exchanges throughout the day, while open-end funds are typically redeemed or bought at net asset value once daily.
Some investors use funds such as the BlackRock Liquidity Funds – FedFund (NASDAQ: BFCXX), which currently yields 3.46%. The fund maintains a $1 net asset value and can be bought and sold daily. The fund primarily invests in short-term U.S. government securities and seeks to maintain liquidity and capital preservation.
Exchange Traded Funds (ETFs)
Unlike open-end mutual funds, ETFs trade on major exchanges like stocks. They own financial assets, including stocks, bonds, currencies, debt, futures contracts, and commodities such as gold bars. One significant advantage of ETFs is that they can be bought or sold at any time the market is trading. ETFs are also among the most heavily traded investment products in the market.
One example is the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE: BIL | BIL Price Prediction). 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 with a remaining maturity of 1 month or more and less than 3 months.
The fund currently pays a 3.91% yield and a monthly dividend of $0.27. Investors should note that the ETF’s price will decrease by that amount when the dividend is paid.
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