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Another Retirement Account Option Worth Considering

Another Retirement Account Option Worth Considering

March 03, 2022

Should You Be Investing in a Retirement Money Market Account?

As you’re nearing retirement, the options for retirement investment solutions can be nothing short of overwhelming. With so many options out there, how do you choose? As you’re looking for low-risk solutions, you might want to consider investing in a money market account, or more specifically, a retirement money market account.

Is a Retirement MMA Right For You?

A retirement MMA might be a good fit for you if:

  • A low-return investment is preferable to you at this point in your retirement planning.
  • You’re looking for a low-risk investment option.
  • You want to have access to funds you’ve deposited.
  • It’s important to you to have stability in the event of a downturn in the market.

If you agree with any of these conditions, then a retirement MMA, in conjunction with other retirement planning strategies, could be a good fit for you.

What is a Retirement Money Market Account?

A regular money market account (MMA) is an interest-bearing account that is held at a banking institution or credit union. This type of account will generally yield a higher interest rate than you would get with a regular savings account through your bank. But more specifically, a retirement money market account is a money market account held within a retirement account, such as an individual retirement account (IRA) or a 401(k). In this instance, your deposits are invested in low-risk options, like certificates of deposit (CDs). To know if a retirement MMA is a good fit for you, it’s important to understand what it is and how it can affect your retirement savings and income planning.

How a Retirement MMA Can Help You

Most savvy investors use a retirement MMA as a means to diversify their retirement investment portfolio. If your risk tolerance is such that you can handle some moderate or high risk, you may have some aggressive investments which yield higher returns but, of course, pose greater risks. Meanwhile, since a money market account is a conservative investment, it can add an element of both stability and liquidity to your investment portfolio. As you prepare for retirement, stability and liquidity may be of increasing importance to you. You might have a lower risk tolerance as you near the end of your career and after you’ve retired, since your income will be fixed and you need your nest egg to continue to grow, without being impacted by any downturns in the market. As you near or enter retirement, you might also need access to your funds for unexpected expenses or large purchases, which a retirement MMA can provide.

If, as you’re nearing retirement, you’re still considering your options for your retirement investment account and would like more information, contact the office.

This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.