The 3 Best Investments People in Their 60s Can Make

Your 60s are an important decade from a financial perspective. At that point, you may be looking to wind down your career and boost your IRA or 401(k) balance in time for retirement. You may also be growing increasingly nervous about the idea of ending your career and having to live off of savings and Social Security. 

The good news, though, is that if you make the right investment choices in your 60s, you can set yourself up for a strong retirement. Here are a few investments worth considering. 

1. Bonds

If you invest in bonds, you might manage to score about an average yearly 5% return on them, according to Vanguard. That's clearly well below the average annual 10% return the stock market has generated (before inflation) over the past 50 years, as measured by the performance of the S&P 500.

But one benefit bonds have over stocks is that they tend to be less volatile, and their value tends to remain fairly stable even as market conditions change. So what you lose in the form of higher returns, you gain in terms of stability. That's an important thing when retirement is getting closer and you don't necessarily have time to ride out a prolonged stock market downturn.

2. Shorter-term CDs

It's important to have enough cash in the bank to pay for at least a year's worth of living expenses when you're close to retirement. But if you have money you want to keep in cash beyond that, then it pays to open a CD (certificate of deposit).

The upside of putting money into a CD is that your principal is protected, and you're likely to generate a higher interest rate on your money than what a savings account will pay you. Also, with a CD, the rate you lock in is guaranteed during the entire term of your CD. With a savings account, you could start off earning 4% on your money and see that rate drop to 2% six months later.

That said, if you're going to put money into a CD, stick to shorter terms, like six or 12 months. You don't want to lock your money away for too long in case you end up needing cash. 

3. Stocks

It's a good idea to shift away from stocks when you're in your 60s. But that doesn't mean you shouldn't own any stocks at all. You still, at that point, want your portfolio to keep growing, so keeping a portion of your assets in stocks is a smart bet.

However, it's important to make sure you have money in a wide range of stocks -- not just a few companies, and not just a single market sector. The more diversified your holdings are, the more protection you buy yourself in case the market falters.

The right investment choices in your 60s could help you approach retirement feeling far more confident. And they could also make it so you're able to retire when you want to, and how you want to. It pays to consider bonds, CDs, and stocks during your 60s. This combination could really give you the best of all worlds -- some aggressive growth, and some of the stability you're apt to be craving at your age.