High Interest IRA Accounts – Do It Right
Choosing the ‘best’ high interest IRA accounts is a little misleading. What is best for someone else may not be the best for you. The best will depend on several factors such as how much you can afford to invest as well at the number of years you have to invest before you reach retirement. Taking all of these factors into account can be a little overwhelming so it may be a good idea to enlist the help of a trained professional to steer you through the process.
A financial planner can explain all the terminology involved with IRA investments. They can also help you gauge the best options for you and your unique situation.
We all know that we shouldn’t ‘put all our eggs in one basket’ the same is true when working with your finances. You want to diversify so your money can be protected no matter what happens. For example, if you have only part of your money in stocks and the stock market tumbles, the rest of your investments will still be safe and earning you money. You can use other investment vehicles such as money markets, bonds, and even precious metals.
Gold, silver and platinum aren’t just things you put on your fingers, they can also be sound investment options. These can be incorporated into your IRA portfolios, even the IRS says it’s ok to do so. Most of the time, precious metals go up in value when the stock market declines in value. It’s a good hedge for when your stocks are declining in value. This is a great way to diversify your high interest IRA accounts.
If you tend to be more conservative in your investment outlook, or you are a little closer to retirement and don’t have much time to recoup any losses, you might want to consider Certificates of Deposit (CD)for your IRA. This is a great option because it still has a fairly high interest rate, and will make you some decent money, yet it involves virtually no risk. It’s the best of both worlds for the risk averse investor.
Another option for someone who is older and doesn’t have as much time before retirement are money market funds. They are low in risk like CD’s, but unlike CD’s they don’t require that you keep the money invested for a set term. If something comes up and you need to get your money out before you were originally planning to, you won’t be penalized (except an IRS penalty) by losing a big chunk or your interest.
If you are looking for a bigger payoff, and are willing to be more aggressive in your investment approach, investing in stocks and bonds can pay off much better than CD’s or money markets. Of course, there is also more risk involved. This is a good option for someone who has a lot of years before retirement age since they will have more time to recoup any loses they may incur.
With so many options available today for high interest IRA accounts, there is something for everyone. A qualified professional can help you find the best option(s) for you and your long, or short, term goals.
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