Oct 11, 2024
A couple from Monterey Park, California, are facing an uncertain future after thieves ransacked their home in broad daylight and made off with their entire retirement savings. The thieves, who likely watched the house and waited for no one to be home, climbed over a brick wall, cut through a metal door, and then forced their way into the home.
Once inside, the burglars found a heavy safe containing the couple's hard-earned retirement savings and loaded it into a waiting vehicle.
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“My parents are such hardworking people and you know, they’re so lowkey. They’re at retirement age, but now they’re just coming to terms, they might not ever be able to retire,” the couple's daughter told KTLA reporters last month. According to the report, the neighbor’s Ring camera captured the thieves loading the roughly 150-pound safe into the trunk of a white Subaru Ascent on the front lawn.
This sad story highlights the importance of storing money at a financial institution rather than at home. Even having a safe in your home for your valuables and cash does not make it a secure location. Less than 10% of Americans said they kept more than $1,000 in cash at home, according to a 2023 GOBankingRates survey.
Putting your savings into retirement accounts with tax advantages, like 401(k)s and IRAs, is the ideal way to protect and grow your wealth for your retirement years. However, people who have been keeping their cash at home are unlikely to feel comfortable with this option since investing in the stock market does come with risks.
Let's look at four safer alternatives that protect your money.
High-Yield Savings Account
A high-yield savings account is a savings account that offers a higher rate of return than a traditional savings account. If the bank is FDIC-insured, deposits are insured up to at least $250,000 per depositor, meaning you cannot lose your funds even if the bank goes under. While these accounts likely provide a lower rate of return than stocks, the funds are protected from market fluctuations and thieves.
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IRA CD
An IRA CD is an individual retirement account where the money is invested in certificates of deposit (CDs) which offer a fixed interest rate for a specified term. This combines the tax savings of an IRA with the security of a CD.
This is a low-risk option for retirement savings that protects your funds and provides modest growth, generally between 3% and 5%. The funds are guaranteed, and setting up a CD ladder can ensure you have access to them when you need them in retirement.
Annuities
An annuity is a financial product offered by insurance companies that provides regular payments, typically during retirement, in exchange for a lump-sum investment or monthly payments over time.
An annuity can be a legitimate way to secure a steady income, but its complexity and fees can vary, so it's essential to evaluate the terms carefully before investing.
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Danielle is a personal finance writer based in Ohio. Her work has appeared in numerous publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love.
