Invest after retirement

After retirement, it is wise to review and adjust your retirement investments to help meet your goals.

A mature woman holding eye glasses looking at her retirement investment portfolio on her laptop.

Planning for retirement doesn't end when you collect the last paycheck from your employer. Being pro-active about protecting the money you have contributed to retirement is important. Making smart investments and adjustments after retirement is equally important.

According to life expectancy data compiled by the Social Security Administration, a man reaching age 65 today can expect to live, on average, until age 84, a woman 86. Many retirees find themselves trying to find safe and reliable investments. The goal is to protect your income streams so you don't run the risk of running out during your lifetime.

Investment options

There are various types of investment options, strategies and approaches. Some potential investments during retirement are:

  • Mutual funds are used by many people who have long-term investment goals. Mutual funds are diversified and managed by a portfolio manager who purchases a wide variety of securities that fit the investment objective of the fund. Mutual funds spread out the risks of the portfolio due to the diversification. Diversification won't eliminate all risk, but it may help balance them.
  • Bond mutual funds are another choice for many retirees because they are managed to generate regular income payments. This money can be used to help fund your retirement spending needs. Bonds generally have less risk than stocks, although they do have some risk.
  • Stock mutual funds are designed for long-term capital appreciation. These are often used to help people save for retirement, and they may make sense for many people after retirement. That's because in the long run, stock funds are better at outperforming inflation than bond funds are. Because the prices of the things you buy are likely to go up while you are retired, you'll want your income to go up, too. Incorporating investments that have the potential for capital appreciation into your retirement investing can help your overall portfolio keep pace with inflation. Keep in mind; all types of investing involve risk, including potential for loss.
  • Certificates of deposit are a low-risk investment option that is backed by the FDIC up to $250,000. With a CD, you won’t have access to the funds for the duration of the terms. However, the interest income you make after the pre-determined time frame is guaranteed. There are several different CD options available to get the most out of your retirement plan.
  • Annuities are an insurance product that can be a source of income throughout your life. There are different types of annuities offered: fixed, indexed and variable. It’s important to understand the pros and cons of each option and consider how much risk you’re able to take.

Educate yourself on retirement investments

Finding a reliable investment income and understanding how to invest is possible. Finding the right balance between risk and return is key. Looking at the sources of your retirement income, the flexibility of your budget and your ability to tolerate risk is a good way to start. Because investing is a lifelong pursuit, you'll want to learn as much as you can so that you can adapt your investments to your changing life needs.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.

Bonds are subject to interest rate risk and may decline in value due to an increase in interest rates.

Neither State Farm nor its agents provide tax or legal advice.

Securities distributed by State Farm VP Management Corp.

Asset allocation does not assure a profit or protect against loss.

State Farm VP Management Corp. is a separate entity from those State Farm and/or unaffiliated entities which provide banking and insurance products.

AP2023/01/0102

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