Safe Money Vs. Risk Money

Keith HazelbakerBy Keith Hazelbaker, CFP®

Over the past few years many retirees have discovered that much of the nest egg they’ve worked to build over their lifetime is at risk, and unfortunately many have experienced substantial losses that may take years to recover. During turbulent times such as these, it’s important to know the difference between safe money and risk money. Safe money is savings you don’t want to take a chance of losing, whereas risk money is savings you are willing to expose to risks for potential gains.

As you grow older, an appropriate percentage (based on your own individual needs) of your savings should be moved from risk money places – mutual funds, commodities, real estate, variable annuities, stocks and bonds  – to safe money places – savings accounts, savings bonds, CDs, fixed annuities and indexed annuities.

Fixed and/or indexed annuities may be a good option for you if you are looking for long-term storage in a safe money place that can provide you with unique features and guarantees. Not only do these annuities offer tax deferral; they also provide the most attractive potential interest earnings of all the safe money places.

As TRTA’s endorsed provider of retirement planning services, North American Life Plans offers members a free review of your safe money needs and can help determine if an annuity may be right for you. To schedule a no-obligation review with a professional advisor, call toll-free 1-888-362-1214.