If you’re getting close to retirement or you’ve just retired, you need a more conservative mix of investments to generate immediate retirement income. Sequence of return risk could be your greatest enemy, and CDs are a solid portfolio option to help fend off this risk and generate near-term income from your nest egg.
“The good thing about using CDs in an IRA is the ability to create a ladder for predictable income in the short term,” says Kristin Sullivan, a financial planner in Denver, CO. “However, most IRA money should still be positioned for longer-term growth.”