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Understanding these options can empower savers to make informed decisions based on their risk tolerances and financial timelines.
3. Stable Value Funds in Retirement Accounts
In retirement accounts like 401(k)s, Brokamp noted the potential benefits of stable value funds or guaranteed investment contracts (GICs). These can yield higher returns compared to traditional cash options and allow retirees to preserve their principal while earning interest.
4. Utilizing Roth IRAs for Emergencies
For those saving for unexpected expenses, a Roth IRA could provide the flexibility needed. Contributors can withdraw their initial contributions without penalty, making it an attractive option for those averse to keeping a separate emergency fund.