So, where can retirees find financial stability without exposing their savings to unnecessary risks? Let’s explore the challenges of CDs and bonds in 2025 and alternative solutions for a more secure retirement. 

1. Why CDs and bonds are losing their appeal 

CDs and bonds have historically provided low-risk, fixed returns that retirees could count on. However, in the current financial climate, they present several limitations.

Low real returns 

Even with interest rates rising in recent years, CDs and traditional bonds often fail to outpace inflation. With inflation hovering around 3% in 2025, many fixed-income investments barely keep up with the rising cost of living.

For example, if a CD offers 4% interest but inflation is 3%, the real rate of return is only 1% — meaning your purchasing power barely grows.

Interest rate risks for bonds 

When interest rates rise, bond values typically fall. This means if you own bonds and need to sell before they mature, you could lose money. Many retirees assume bonds are “safe,” but long-term bonds can be highly sensitive to interest rate changes, leading to unexpected losses.

Limited liquidity 

CDs lock up your money for months or years, with penalties for early withdrawals. If you need access to cash for an emergency, this lack of flexibility can be problematic.

2. The need for safer, more flexible retirement solutions 

With CDs and bonds becoming less attractive, retirees need options that offer principal protection, steady income and flexibility. Fortunately, there are several financial tools designed to provide stability without relying on market-based risk.

3. Fixed index annuities: Growth without market exposure 

One alternative to CDs and bonds is a fixed index annuity, or FIA. These financial products offer:

• Principal protection — Your money isn’t directly invested in the market, so you don’t lose principal when stocks decline.
• Growth potential — Your interest earnings are tied to an index, like the S&P 500, but with a cap or participation rate that limits losses.
• Guaranteed income options — Many FIAs offer lifetime income features, ensuring you won’t outlive your savings.

Unlike CDs, FIAs provide both security and growth potential — without the downside risk of bonds.

4. High-yield savings and money market accounts: Liquidity with stability 

For retirees who need immediate access to cash but don’t want to lose purchasing power, high-yield savings accounts and money market funds are strong options.

Advantages: 

• Better interest rates — Many accounts now offer rates over 4%, significantly higher than standard bank savings accounts.
• Liquidity — Unlike CDs, these accounts allow easy withdrawals without penalties.
• FDIC or NCUA insurance — If held at a bank or credit union, deposits are insured up to $250,000 per depositor.

While these accounts won’t replace long-term growth strategies, they offer a safe place for emergency funds or cash reserves.

5. Annuities for predictable retirement income 

One of the biggest concerns for retirees is outliving their money. A properly structured annuity can provide guaranteed income that lasts a lifetime.

Types of annuities for stability: 

• Fixed annuities — Provide a set interest rate for a specified period, much like a CD but often with higher returns.
• Fixed index annuities — Offer growth potential while protecting against market downturns. 
• Immediate annuities — Convert a lump sum into guaranteed monthly income, perfect for those needing reliable cash flow. 

Unlike bonds, which fluctuate in value, annuities offer protection and predictability, making them a solid option for retirees looking for security.

6. Short-term alternatives to bonds 

If you still prefer fixed-income options but want more flexibility than long-term bonds, consider shorter-term alternatives like:

• Treasury inflation-protected securities, or TIPS — These adjust with inflation, ensuring your investment maintains purchasing power. 
• Short-term corporate bonds — Offer higher yields than CDs with less risk than long-term bonds.
• Laddered CDs or bonds — Staggering maturities allows you to reinvest at higher rates when interest rates rise. 

Short-term options give retirees more flexibility and less exposure to interest rate swings than traditional long-term bonds.

7. Reverse mortgages for home equity access 

For retirees who own their home, a reverse mortgage can provide an additional source of income without selling the property.

How it works: 

• Homeowners 62 and older can convert home equity into tax-free income.
• No monthly payments required (loan is repaid when the home is sold or no longer occupied).
• Funds can be used for living expenses, healthcare, or other retirement needs.

A reverse mortgage isn’t right for everyone, but it can be an option for retirees looking to supplement income without taking market risks. 

8. Why a diversified safe money plan is key 

The best approach for retirees isn’t relying on one single solution, but rather building a diversified safe money strategy.

A strong retirement stability plan might include:

• Fixed index annuities for growth with protection.
• High-yield savings for liquidity and emergency funds.
• Short-term bonds or CDs for fixed-income diversification.
• Treasury inflation-protected securities to hedge against inflation.
• Reverse mortgage (if applicable) for unlocking home equity without selling.

By combining safety, growth potential and guaranteed income, you create a plan that protects your wealth while keeping up with retirement needs.

Final thoughts: Stability without compromise 

While CDs and bonds have traditionally been seen as “safe” investments, today’s retirees need better alternatives that offer both protection and growth.

With interest rates fluctuating and inflation reducing purchasing power, relying solely on traditional fixed-income products may leave retirees short of the financial security they need.

By exploring fixed index annuities, high-yield accounts, short-term bonds and other stability-focused solutions, you can create a strong, resilient retirement plan that adapts to economic changes while keeping your savings safe.

Your financial future shouldn’t be left to chance — a safe money strategy ensures your retirement is secure, no matter what the market does.

Lyle Boss, The REAL BOSS Financial, endorsed by Glenn Beck as the premier retirement advisor for Utah and the Mountain West states. Boss Financial, 955 Chambers St., Suite 250, Ogden, UT 84403. Telephone: 801-475-9400.