Say you’re extremely cautious — what about savings bonds? Even with flat interest rates, I-bonds are tied to inflation and EE bonds are guaranteed to at least double in value, so bonds have at least a (roughly) 4% interest rate — not great, but way better than the <1% you get from a savings account. You can buy max $10K of each type of bond per year (I think) but if you’re throwing something insane like 25K per year into super (too) safe “retirement” accounts, you need to put some money in stocks ASAP anyway. At age 30, shouldn’t 70% of your savings be in stocks,? Just invest in unhealthy things that people need, like liquor, and you’ll survive the bumps!

Also, maybe this is off the wall, but if there’s a way to start some kind of side business, you can use your status as owner of that business to open a 401(k), and put all your earnings from the business into it. You can even have the business match you at up to $2 for every $1 you put in — I think the max that you and the business can put into that account is $39K/yr and/or you can only directly contribute up to the amount of your earned income from the business.

Also, if nothing works out in terms of the usual retirement savings vehicles, you can always buy an annuity when the time comes — if you’ve found a way to invest your money well enough that you can afford one. Annuities are super expensive, but if you start investing now with the aim to buy one in 35 years, you’ll probably be able to make it, and then you’ll have income for life.

I agree with the majority of these comments. A savings account is suitable for an emergency account, but it’s not sufficient for the purpose of saving for retirement. This is where investing comes in – not risky stock picking or active management, but a low risk, diversified portfolio that helps you reach your goals. It’s true we are living in rare times, but investing in the stock market is still the best way to grow your savings – especially for the long term.

And hey, you guys! Banks can’t offer higher interest rates on savings until they can charge higher interest rates on loans, and that won’t make sense until the Fed ups the discount rate. BUTBUTBUT! It’s low right now in order to stimulate economic activity. There’s another way you can do that other than the Fed’s monetary policy, and it’s fiscal policy. But then we have to have a Congress willing to vote for stimulus packages and other bills to help out (tax cuts for the rich do not jumpstart the economy, empirics say). So – go vote for someone who will do that!

My goal is to transfer all my investments into one place by the end of the year (tiny IRA, tiny Roth IRA, and some inherited stock), so please keep up this conservation so it will motivate me to figure it out.

Then it’s all time value of money calculations.

But, here is the thing. An IRA (or a 401k for that matter) is merely an investment vehicle. The returns you get from it depend on how and in what you invest. While you’re guaranteed (for now)to not pay taxes on your IRA principal or earnings when you withdraw, you aren’t guaranteed earnings. In fact, if you’re like me, and you sock away your IRA maximum in a very safe CD, you’re probably losing money. The rate of inflation is greater than the interest rate your principal is earning.

That’s why it is important to not only crunch the numbers to figure out how much to save for retirement, but to adopt the onus to figure out how to invest your savings to meet your retirement goals.