When planning for retirement, most people focus on the big picture: 401(k)s, Social Security, and how much they need to retire comfortably. But what often flies under the radar is how they manage their short-term savings—the “safe money” that’s meant to cover near-term expenses.

If you’re keeping that money in traditional CDs or a bank savings account, you could be leaving thousands of dollars in interest on the table. And worse, you may be unknowingly adding risk to the rest of your portfolio.

Let’s fix that.

The Hidden Problem with CDs and Savings Accounts

Certificates of Deposit (CDs) and high-yield savings accounts have long been viewed as the go-to for retirees seeking safety. They feel secure. Familiar. Predictable. But in today’s market, that comfort might be costing you more than you think.

CD rates have dropped significantly, with many offering around 3% or less, while inflation still hovers around 3% to 4%. That means your “safe” money may not even be keeping up with the cost of living. Meanwhile, some banks are paying as little as 1.5% on savings accounts.

Here’s the truth: low returns in your “safe” bucket force your other investments to take on more risk just to keep your overall retirement plan on track. That’s a dangerous game, especially in volatile markets.

The Smart Alternative: Money Market ETFs

Enter Money Market ETFs—a lesser-known but powerful tool that offers higher yields, better liquidity, and more transparency than traditional CDs or savings accounts.

These ETFs invest in ultra-short-term government treasuries (typically 0–3 months) and allow your interest to accrue daily. Unlike traditional money market funds that pay monthly, you can buy and sell Money Market ETFs any time, and your earned interest is already baked into the price.

Here’s what makes them attractive for retirees:

• Daily liquidity – Access your money whenever you need it

• Higher yields – Many are currently yielding 4–5% or more

• Low risk – Backed by U.S. Treasuries or high-credit corporate debt

• Transparency – See what you’re earning, in real time

And here’s the best part: you can start investing in them with just a brokerage account and a few clicks. No bank fees. No confusing rules. Just smarter money management.

The Bucket Strategy: Protecting Your Income and Your Future

At Yields4U, we use a bucket strategy for retirement income planning. We separate your savings into three “buckets”:

1. Spending Bucket (0–12 months): Your day-to-day expenses. This is where Money Market ETFs shine—delivering steady income with low risk.

2. Replenishing Bucket (3–5 years): For near-term needs. Here, we might mix in short-term corporate bonds or conservative stock ETFs to dial up the return slightly.

3. Growth Bucket (5+ years): Long-term investments meant to outpace inflation and support you down the road.

By managing these buckets actively, we make sure your retirement plan works holistically—not as separate, isolated parts. We help you dial the risk up or down as needed to match your goals and protect against the unexpected.

The Big Mistake to Avoid

The biggest mistake retirees make? Ignoring short-term strategy.

Too often, people either:

• Keep too much in cash, losing ground to inflation

• Or take on too much risk in long-term investments to make up for it

Both paths can sabotage your retirement. The key is finding the sweet spot—where your safe money works just as hard as the rest of your portfolio, without exposing you to unnecessary risk.

Ready to Make Your Money Work Smarter?

If you’re in your 50s or already retired and want to make sure every dollar is pulling its weight, let’s talk.

Book a free, no-pressure consultation and get a custom retirement plan that includes smart short-term strategies like Money Market ETFs.

👉 Schedule your appointment today.