A. Quantitative Easing policy from the Fed brought incredibly low rates to ordinary consumers, but also hurt many of the baby boomers, with CD rates less than 0.25%, is there a safe way for baby boomers to generate enough returns from their hard earned cash? If yes, what to do?
Seniors who want to maximize their returns from their cash should consider the following ways:
- Avoid those confusing financial products that "promise" high returns. In this period of historically low rate environment, it is unwise to lock any long term return at this time. Or at least you will pay dearly for such "high return".
- Back to the basics of investment - diversify. If your life expectancy is more than 5 years, you should consider setting aside a portion of your portion in stock funds, such as low cost index ETF's, even you know they are riskier than bonds or CDs.
- Remember, return comes with risk, you can't have both at the same time. So be ready for the risk you are taking, as long as you are diversified enough, you will be fine.