Please forward this error screen to 209. I’m 65 and looking to retire this year. To confirm that’s the safe high yield investments 2016, just look at the type of investments that provide the greatest protection of principal — FDIC-insured money-market accounts, savings accounts and short-term CDs. You may be able to get a bit more, say, 1.

Financial Industry Regulatory Authority alert warns, you should beware of pitches for high-yielding CDs that may actually be designed to lure you into other investments. And while dividend stocks and funds can certainly play a legitimate role as a long-term investment in a diversified retirement portfolio, they also do not provide the principal stability of cash equivalents, despite the many stories you may see about “safe” high-yield stocks. Related: Which type of stocks should I invest in? The simple fact is that the greater safety of principal an investment offers, the lower its return will be. And the higher its yield or return potential, the less secure and more volatile it is likely to be, even if the risk isn’t always apparent. That’s the way the investment world works. So does that mean you should just bite the bullet, plow all of your retirement savings into safe-but-low yielding investments and hope interest rates eventually climb?

Sure, you want to have some of it in a place where you won’t have to worry about principal loss, a reserve you know you can count on in emergencies and for cash to cover living expenses you incur now and in the near future. But you don’t need constant immediate access to your entire nest egg and you don’t have to protect every cent of your money every hour of every day. You can afford to let the value of some of your savings fluctuate up and down a bit in return for a higher long-term return. That, in turn, will allow you to tap your nest egg for more spending cash than you could by sticking solely to safe low-yielding investments and better enable you to maintain your standard of living throughout retirement.

In other words, your aim shouldn’t be to keep all of your savings safe all of the time. Related: How much will I need for retirement? Here’s how you achieve that goal. First, you set aside a portion of your nest egg in a cash reserve, or emergency account.

This is the place where you limit yourself to cash equivalents, or safe investments that provide the highest level of principal protection. There’s no set amount of how much of your nest egg you should devote to this account. The key issue for this part of your nest egg is settling on a mix of stocks and bonds that makes sense — that is, enough stocks to provide some growth potential so you can maintain your standard of living, but enough in bonds so your stomach doesn’t churn every time the stock market takes a dive. There’s no single stocks-bonds blend that’s right for everyone. Completing a risk tolerance test can give you an idea of what the appropriate mix might be for you, although you can always decide to invest more aggressively or conservatively. Conversely, if you can easily fund your living expenses while taking less investment risk than you can actually handle, then you might want to invest more conservatively, if for no other reason than it might make for a less anxious and more enjoyable retirement. The point, though, is that looking for safe investments with rates of return that simply aren’t achievable is not a viable investing strategy.

So I advise you to abandon this futile, and possibly dangerous, search. Instead, focus on creating a more reasonable and comprehensive plan along the lines I outlined above that combines safety and growth potential to generate realistic returns at a level of risk you can live with while still enjoying retirement. Have You Crash-Tested Your Retirement Plan? Where Can You Put Your Savings So It Won’t Get Whacked By The Stock Market? Does Your Bank Pay as Little as 0. Our Terms of Service and Privacy Policy have changed.

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Over the past few days I’ve received a few comments whose central theme is safety of returns while providing moderate returns. I think the bad performance of the stock market over the past few years has made people search for instruments where return of capital is more important than return on capital, and these questions are a result of that mindset. In this post I’ll be listing out 10 instruments that I think are quite safe for investing along with their tenure, expected return, tax applicability and other notes. If you think something else should be on this list, please leave a comment. Bank failures are rare in India so bank fixed deposits are a very safe way to invest your money. You know the rates up front so there is no uncertainty there.

Taxes can eat into your returns though, especially if you are in the high tax bracket, but even then a FD that compounds quarterly and is done for a long maturity will yield well. The amount that you invest in tax saver FD is deductible from your taxable income up to a limit of Rs. The interest income itself is taxable. Like the bank fixed deposit, this is also a very safe and certain investment. The drawback is that money is locked in for at least 5 years, and the positive is that you get some tax benefit to juice up your return.