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2 days ago
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3 Low-Cost Investments Under $100 for Retirees in 2025
Retirees on a fixed income are often on a tight budget, so investing can seem daunting and unattainable. But the truth is there are low-cost options that don't require deep pockets. There's a misconception some believe that investing is only for the wealthy, but those in retirement can invest $100 or less and see a return. Read More: Learn More: You don't need a lot of cash to build wealth, and there are safe bets that don't feel like you're gambling your money away. Here are three ways to invest as a retiree for under $100. Also see five reasons boomers should continue investing in retirement. Treasury bonds, also referred to as T-bonds, are a common way people invest. Essentially, you're lending the U.S. government money. There's typically a 20- to 30-year maturity period where you earn interest throughout, and depending on the type of bond, the interest rate varies. For instance, the interest rate for I bonds changes every six months due to inflation, and according to Danny Ray, founder of PinnacleQuote, it's one of the best ways for retirees to invest. 'Even starting with just $25 to $100 through can begin building interest. You can invest up to $10,000 per year,' he said. It's a smart, strategic move because it's safe due to the fact it's backed by the U.S. government and inflation is taken into consideration with the interest. 'That's a big deal when you're on a fixed income,' Ray said. 'Over time, they can beat savings account rates and keep your cash safe. Above all, they help protect your retirement nest egg from losing value without needing high risk.' Check Out: Index funds are a type of mutual fund or exchange-traded fund (ETF) designed to replicate the performance of a specific market index, such as the S&P 500, and they're a great way to invest for retirees, according to Eric Mangold, CWS, founder of Argosy Wealth Management. 'There are numerous index funds that have no minimum to start to invest,' he said. 'You literally could start with $50.' An index fund can be a great part of a diversified portfolio or a good way to start building a diversified portfolio. 'Investors can also look for no-minimum or low-minimum mutual funds to help round out their portfolio, which can help create a digestible risk profile for those who are retired,' Mangold said. Dividend stocks are shares of publicly traded companies that pay shareholders typically on a quarterly basis. Investing in dividend-paying stocks is a way to generate a consistent income stream during times when the market is rocky, and according to Ray, it is ideal for retirees. 'Above all, these types of stocks allow retirees to earn regular income without selling shares,' he said. 'That can be a big deal when you're trying to stretch your savings.' And there are other benefits too. 'For example, many well established companies like utilities, healthcare firms and consumer staples pay out consistent dividends. Some even increase those payouts over time, helping to keep up with inflation.' Retirees can invest $100 or a few hundred dollars to get started using dividend-focused exchange-traded funds (ETFs) or direct stock purchases through DRIPs (dividend reinvestment plans), which often have low or no fees, per Ray. Overall, dividend stocks can bring a balance of income and long-term value, especially for someone wanting their money to work without dipping into principal. More From GOBankingRates The New Retirement Problem Boomers Are Facing This article originally appeared on 3 Low-Cost Investments Under $100 for Retirees in 2025
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04-05-2025
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Sitting on cash? Lock in this new Series I bond rate to protect your savings from inflation.
The new rate for Series I bonds effective on May 1 may not shock you or tantalize you as an investment, but it may give you an alternative to stuffing cash under your mattress — or, even worse, keeping your cash in a savings account at one of the major national banks where you are still earning less than 1%. For new I-bond purchases from May through October, the rate will be 3.98%. That is a combination of a 1.1% fixed rate that will stay with your bonds as long as you hold them and an annualized variable rate of 2.86%, which fluctuates with inflation. What 100 years of stock-market crashes tells us about the S&P 500's stunning tariff comeback Stock market's rapid rebound from tariff-inspired rout stuns Wall Street. But there were signs this would happen. My eldest son refused to share his father's $500K inheritance with his siblings. Should I cut him off? My ailing father's house burned down in the California fires. Will our brother, who took care of them, lose his inheritance? If you read April's jobs report, you won't be surprised by the No. 1 'best job' in America For savers, particularly retirees, it's that fixed rate that should draw you in. If you're one of those who have been scared by recent stock-market volatility and pulled money out of the market, I bonds are one of the places where you could keep your stash safe. It is at least twice as good as a big-bank savings account, even if it's not quite as good right now as other so-called safe investments. You could, instead, put your money in a high-yield savings account at many online institutions that still pay more than 4%, but you should consider that those rates will rise and fall with Federal Reserve action. You could also buy TIPS, other Treasurys or CDs, which are available at various intervals. You can transact for all of those through your preferred financial institution (TIPS on the secondary market), while with I bonds you have to buy and hold them from the government directly via which is not always a pleasant experience or easy to manage. Why are we still talking about Series I savings bonds in 2025? Because, as the TipsWatch blog heralded the new rate of these inflation-protected savings bonds, they are 'a predictable result in unpredictable times.' If you want guaranteed safety of your principal, plus inflation protection, you can put up to $10,000 per individual per year into I bonds and hold them for up to 30 years. Your fixed rate will stay the same over time, but the inflation rate will vary. If you lock in now at 1.1%, that means if inflation goes up as high as it did before, when the variable rate went to 9.62% in 2022 (with a zero fixed rate), you would be earning 10.72%. It's not a bad deal. When rates were up, I spoke with veteran I-bond holders who had bought in previous eras when the fixed rate was even higher — 3.6% in 2000 was the highest fixed rate since 1998 — and so they were making 13.22% for a time. The drawback to stashing your cash in I bonds to avoid stock-market volatility is that you are locked into your purchase for a year, and if you cash out before five years, you lose three months' worth of interest. This will tie up a portion of your cash and bar you from being able to reinvest it if things turn around, which is the classic pitfall of trying to time the market. You don't have to rush to game this out, because this I-bond rate will be around for the next six months. And, as TipsWatch points out, you can hold off a purchase until the end of a month and still get the interest for that month. So if you work things out by the end of May, you can still jump in then. If you want to wait and see what happens when rates shift next, you could keep watching until mid-October, when analysts will be able to gauge what the next rate will be. The fixed rate has been slipping for the past two years. It was 1.3% from May 2023 to November 2024, and then shifted to 1.2%. When inflation is high, the fixed rate typically goes to zero, and when it is low, it goes higher. So if you look at the economy now and think inflation is likely to go up, then a 1% fixed rate will look like a good deal to you, especially if you also think the stock market is going to be down and we might be headed toward a recession. If you don't think any of that will happen, then there may be better places to put your cash, like index funds and Treasury bonds. It's all about your investing and spending strategies. If you're worried that your investments weren't properly diversified in the first place, maybe you need more cash reserves and should be thinking about keeping one to three years' worth in safe investments so you protect your spending power. Putting some of your nest egg into I bonds would fulfill that purpose. Then that cash reserve is always there for you, keeping up with inflation and guaranteed not to falter. If that kind of safety will help you sleep at night, then you should put I bonds on your shopping list. Got a question about investing, how it fits into your overall financial plan and what strategies can help you make the most out of your money? You can write to me at . Please put 'Fix My Portfolio' in the subject line. You can also join the Retirement conversation in our . 'In their last days, our parents changed their will': They left me $250,000, but gave my sister $1 million. What should I do? Warren Buffett proves, once again, why he's the best My father is giving me $250K to buy a home, but told me not to tell my two siblings. Am I morally obligated to tell them? 'She's kept him afloat': I'm 78 and leaving my daughter, 41, my life savings, but her partner is a mooch. How can I protect her? 'Retirement is within my grasp': I'm 57, my 401(k) is dropping and I'm feeling anxious about a recession. What can I do?
