Kitchen Table Finance

S3E19 – Using CDs and Bonds in Retirement

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Welcome to another episode of Kitchen Table Finance, where we dive deep into financial strategies to help you make the most out of your retirement. In today’s episode, we’re tackling a common question: “Should I put everything into CDs or bonds when I retire?”

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Episode Highlights

The Common Misconception

  • Many retirees think, “I’m retiring, so I should put everything in CDs or bonds to avoid risk.”
  • While CDs and bonds are safer investments, there’s a more strategic way to use them in your retirement plan.

    • Proper Use of CDs and Bonds

    • CDs and bonds are indeed useful for retirement, but they should be part of a larger, diversified strategy.
    • We discuss how to balance these safe investments with other asset classes to optimize your retirement portfolio.

      • Understanding Cash Investments

      • Despite being considered straightforward, many people struggle with understanding how CDs, money markets, and cash investments fit into their overall financial picture.
      • We explore how the current high-yield environment for cash investments is an anomaly and how to navigate it.

        • Historical Context

        • Reflecting on how discussions around cash investments have evolved over the past decade.
        • Current opportunities: High-yield savings accounts offering 5% returns and how they impact your decisions.

          • Practical Advice

          • Cash is ideal for contingency funds or planned expenses within the next 12-36 months.
          • Just because you hit retirement doesn’t mean you should put all your money into low-risk investments.
          • Long-term retirement income should include a mix of assets to ensure growth and sustainability over 20-30 years or more.

            • Interesting Tidbits

            • Did you know there’s a bank offering a 100-year CD? What does that mean for you?
              • Key Takeaways
              • Diversification remains crucial even in retirement; don’t put all your eggs in one basket.
              • Utilize CDs and bonds as part of a broader strategy to balance safety and growth.
              • Stay informed about the current market environment and adjust your investments accordingly.
                • Call to Action

                Enjoying our insights? Make sure to subscribe to our podcast for more valuable tips on managing your finances. Have questions or topics you’d like us to cover? Leave a comment or reach out to us directly—we’d love to hear from you!

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                Tune in next week as we continue to explore effective strategies for a secure and prosperous retirement!

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                Kitchen Table FinanceBy David Shotwell CFP(r) and Nick Nauta CFP(r)
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