Am I too old (61) to invest?

[Cazzi]

I have an FDIC insured high yield savings account paying 3.9% interest on about $2,000. I add about $350 to the account each month. Would love to earn more. My husband says a Roth IRA wouldn't be worth doing because it is riskier and I'd need a lot more savings to make a difference.

CDs currently don't pay much higher than the 3.9%. Any suggestions anyone? Thanks.

Caz

[Xin Lu]

hmm...i don't think you are ever too old to invest. My granddad is 81 and he invests in mutual funds and bonds. The key is to balance your investments so you don't put most of your assets in the riskier investments. Also, a Roth IRA doesn't have to be risky if you buy investments with low risk in it. An IRA is just an investment account type. Currently the best yielding "safe" investment for me is i-bonds, but it isn't for everyone. You can read about that here: http://www.wisebread.com/a-simple-gu...-bonds-i-bonds and Philip's excellent article here: http://www.wisebread.com/tips-and-i-bonds

[financepro]

An investment has nothing to do with your age unless n until you are thinking of some insurance policies.

[Emily J]

Caz,
You can get a much higher rate. I heard of this free service for consumers to find the best CD rates on Fox News. See this clip: http://media.myfoxboston.com/news/sp...oneyaisle.html

[Julie Rains]

As many others have said, I don't think you can ever be too old to invest. However, you might be asking if you should invest in stocks/mutual funds rather than putting money in a savings account, given your time horizon for needing access to your money.

There are many factors in deciding to invest and I do think that age can be one of them -- just based on how many more years you'll be working, how many years that you will need money but not working, and when you will need to access your money (in 4 years or 40?)

If you are still working and have disposable income (and it sounds like you are and you do), then it seems reasonable to invest. If you are going to have a constant stream of income from a government or company pension with paid health insurance for the rest of your life but you think you'll need your money next year, then it makes less sense to invest from a time-horizon, cash-flow point of view.

My fav quote on being older and investing was a 95 (or so) investor who was annoyed at calls from brokers pitching long-term investments. His response was "I don't even buy green bananas." (though here is someone who disagrees)

[JosephSBK]

I am representative of ShoreBank and I would be happy to take some time to tell you about our current High Yield Online Savings Account. The great thing about this account is that as you watch your money grow you benefit from knowing that you are helping to fund profitable, environmentally sound, and socially responsible projects like the Urban Green House in Chicago's South side neighborhood of Bronzeville. This 3 bedroom residential property is setting new standards for green living with such cost-saving green innovations as central lighting shafts, cooling floor slabs, and a thermal rock bed and garden. This is just one of the many projects that ShoreBank is working on to help create a more sustainable environment. For more information about ShoreBank's High Yield Online Savings Account please click here. If you have any questions about this account please don't hesitate to ask, that's why I am here!

[Retire Blogger]

Caz and Julie:
Three days ago I did a retirement analysis for Sidney, who is 87 years old, and still saves $2000 per month towards his retirement.

If you live as long as Sidney, your savings will need to grow at least as fast as real inflation, and this can really only be achieved with stocks. The Journal of Financial Planning recommends an asset allocation, and I have tested their findings and agree, of between 50-75% in stocks. So yes, you need to be investing, to avoid running out of savings during retirement.

Here is an article on the importance of including your house in your overall investment asset allocation:

[Julie Rains]

The goal of savings in any form (savings account, stocks, bonds, real estate, etc.) is to provide a stream of income. I, like you and Sidney apparently, prefer stocks over other forms of investment but, theoretically, that stream of income can be accomplished in other ways. (see reference to Journal of Financial Planning article)

Thanks for sharing! Is Sidney generating income from a job and investing it? Or is he reinvesting sales of stocks?

[Retire Blogger]

Don't feel sorry for Sidney, after trying the free green retirement analysis he found out, that he can increase his retirement budget from $15,000 to $25,000 per month. I don't know the answer to your direct question, the free analysis doesn't ask those questions, which would be required with a green retirement plan.

Bye the way, I just did another analysis this morning, for an 80 year old gentleman who is not as lucky as Sidney. This fellow needs to reduce his retirement budget from $18,000 to $10,000 per month. If not we were all so un-lucky.

[Johansen8]

I think investing can be done at any age...but pay more attention to your goals...These goals may include buying a new television or going on a holiday. It is important to have a strong understanding of these goals, establishing the best overall set of investment goals for you.