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Investment Guidance And Tips For Seniors

Create A Successful Retirement Investment Plan

Most retirement investing advice revolves around different strategies and formulas, which quickly can become overwhelming or confusing. There are also a number of groups of people who purposely prey on seniors, making false claims of high returns. This guide can help you identify your retirement goals and invest safely for the future.

What To Look For When Investing

Senior couple at the bank with financial advisor looking at a tabletWhen looking for the safest way to invest your money, doing your homework is key. There are many reputable resources you can consider reviewing that provide a wealth of information. It is also helpful to speak with a reputable financial advisor for more information and advice.

Ask contacts at your local bank, who are trusted people you’re already comfortable with, if they have an in-house financial advisor that you can speak to. If not, they may be able to refer you to trusted resources. If you want to look online, AARP recommends Let’s Make A Plan as a resource to find a Certified Financial Planner (CFP).

According to AARP, there are some questions you should ask when choosing and meeting with a Certified Financial Planner, such as:

  • How do they charge?
  • How much time do they dedicate to you?
  • Are there income requirements?
  • How many clients do they have?

What To Discuss With A Certified Financial Planner

FDIC-Insured Accounts

When looking for an investment option, an FDIC-insured account may give you peace of mind by increasing confidence in the protection of your invested funds. The insurance on these types of accounts protects $250,000 for certain investments.


Diversification can help your investment stay safe during extreme market fluctuations and help protect your investments long term. Your CFP can advise you on how much diversification you should consider to mitigate your investment risk. The Financial Industry Regulatory Authority (FINRA) provides information on diversification and other key investing concepts.

Protecting Your Retirement Income

There are many things that can affect your retirement income, such as health care costs; planning for potential long-term health care costs is important, as life expectancies are rising. Having a pool of money to help cover long-term care expenses can also protect your retirement income. The average social security benefit is around $1,500 a month, which may or may not cover all your needs. These are also topics that a financial planner would likely discuss with you.

Prepare For Inflation

Inflation can affect your available investment income, because it inflates the future costs of services and goods and may leave you with less to invest with. Even a tiny inflation rate can considerably impact your future purchasing power. This article from Fidelity explains why inflation matters to your financial plan.

Avoiding Investment Scams

Senior male protecting his piggy bankUnfortunately, there are many criminals who like to prey on the most vulnerable people of our population, seniors. The AARP has identified some common scams that criminals deploy to scam millions of seniors out of thousands of dollars.

If you have someone presenting you with an investment opportunity, ask questions. Most criminals aren’t expecting you to investigate before you invest.

Ask them about who they are and try to get their personal contact information. If the person you’re speaking with does not answer any of your questions or concerns, they are most likely a fraud. Take the time to do your own research on the company before you give them any of your personal information. Bring these types of opportunities to your financial advisor for advice. FINRA provides a wealth of information to help you “outsmart investment fraud.”

Research Before You Invest

Concerned senior woman on phone with credit card companyIn addition to speaking to your advisor, researching a company thoroughly before committing can be helpful. Message board postings, unsolicited emails, and news releases about a company are typically not enough evidence to invest safely.

For investments publicly traded, it’s helpful to thoroughly understand the company’s business and its services or products before you invest. Check out the company’s financial statements on the Securities and Exchange Commission (SEC) EDGAR system. If you can’t find them listed, be wary of this investment. Here is more detail from on available research tools.

Get To Know The Salesperson

Even if you already socially know the salesperson, spend some time checking them out. The securities salespeople you work with should have FINRA issued licenses to sell securities in your state. If you know any local investment firms, you can reach out to them and ask if they have ever dealt with the company presenting you with the investment opportunity.

Look Out For Unsolicited Offers

If someone pitches you about an investment you did not initially seek out on your own, take caution. Some people post fake reviews on websites, praising and cheering about how significant an investment was. Some will even go as far as putting monetary figures of how much money they received in return.

If you see these online, it’s helpful to look for current financial information about the company. Check out other online resources to ensure the numbers they boast online match what they produce.

If you are not able to find independent sources to corroborate their numbers, it could possibly be a a pump and dump scheme, which Investopedia defines as a “scheme to boost the price of a stock through fake recommendations.” If someone recommends offshore or foreign investments, they are most likely trying to scam you. If something were to go wrong with an offshore account, there may be no way for you to locate the money abroad.

Common Investment Red Flags

Overly Consistent Returns

One of the most common red flags to look out for is someone who guarantees a high return. All investments carry varying degrees of risk. If someone tries to tell you that if you put down $3000 now to get $10,000 later, there is a significant chance they are trying to scam you.

If the market is not doing well overall but your investment continues to trend upwards, there could be something amiss. Even the most stable investments experience lows every once in a while. Review these returns and their statements with your financial advisor.

Unregistered Products

Many investment scams involve people who don’t have the proper registered securities. As mentioned above, taking the time to make sure the salesperson is adequately insured and licensed before doing business with them can be beneficial in the long run. If they aren’t insured and/or licensed, they may be looking to sell you an unregistered and unreal investment.

Complex Strategies

It’s helpful to avoid any salesperson who mainly uses or praises extremely complex investment techniques that promise great success. Legitimate investment professionals should be able to explain what their methods are, according to FINRA.

When considering an investment, understand what you are getting yourself into completely, including knowing how the investment will work for you and also how the investment makes money.

A Pushy Salesperson

If the person you are working with is pushy or tells you that you should “act now,” you may want to turn the other way. Even if there is no fraud present, no one should rush you into making a decision, especially one that involves finances.

Missing Documentation

If someone tries to sell you securities without any financial documentation or any documentation at all, this person is most likely selling you an unregistered security. This also applies to stocks. If someone tries to sell you stock without a stock symbol, their product is unregistered and most likely unreal.

Account Discrepancies

Unauthorized trades or other problems found in your account statements can either be a sign of a genuine error or fraud. Keep an eye on your accounts to ensure that your account activity is consistent with your personal investment plan strategy.

It is also helpful to know who holds your assets. For example, you will want to know if your investment advisor is also the main person over your assets. Is there a third-party person involved? If your investment advisor is the same person who holds your assets, there is a chance they could be using your money for fraudulent activities.

Investing To Support Retirement And Retirement Living

IRAs, brokerage accounts, and 401(k) accounts are not investments but portfolios, which hold your investment assets for you. Consider speaking to a financial advisor well before retirement to help plan for yours and your family’s future.

Tax-Advantaged Accounts

IRAs and 401(k) accounts are tax-deferred accounts that don’t require a person to pay taxes on what is accrued in those accounts. One needs to pay income tax only when withdrawing money during retirement. Traditional 401(k) and IRAs use pretax dollars for funding, which means receiving a tax deduction from deposits made.

Roth IRAs use after-tax dollars, so using the amount of money deposited as a tax deduction is not allowed; however, taxes are not paid on withdrawals with these types of accounts after retirement.

Taxable Accounts

Taxable accounts don’t have tax breaks because they are funded with after-tax dollars. Taxes are paid on any capital gains or investment income the year the funds from these accounts are withdrawn. Most bank accounts are taxable accounts, but you can find tax-deferred accounts at a reputable brokerage.

Calculate Your Net Worth

To better grasp how much you can invest before retirement, nerdwallet provides a free, online calculator and instruction on calculating your net worth, which is the difference between your liabilities and assets.

Your assets typically include investments, real property, personal property, and cash or cash equivalents. Liabilities are usually your debts. This can consist of your mortgage, medical bills, car loans, and any outstanding credit card balances. Once you calculate your net worth, you will better know where you stand for retirement today.

Investment Resources for Seniors

Senior man holding a jar labeled ‘Retirement’ that is filled with gold coins

These resources can also help you plan invest safely for the future:

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