Certificates of deposit (CDs) are seen as some of the most powerful financial tools out there. They're low-risk, long-term products that have interest at rates that can help you reach your financial goals. And in the case of Ally Bank's No Penalty CD, you also have access to your cash without paying a penalty should the need arise after the first six days following the date you fund your account.
These qualities have made them a key component in retirees' financial portfolios. "I call [CDs] financial insurance," said Rick Kahler in a recent interview with Ally. He is president of the Kahler Financial Group in Rapid City, South Dakota. "People who are retired need to know that the income they are depending on in retirement is there, so I recommend that clients put aside two to four years of income in a low-risk financial vehicle".
"This is a good strategy to help weather the ups and downs of the [stock] market," he adds.
With an appropriate portion of funds in bank CDs, retirees have more flexibility in deciding when to sell stocks—and to avoid selling if the time is wrong. The CD is always there to use first if funds are needed. "They know they have enough years set aside in income [to wait] to where, the chances are, the market will recover," says Kahler.
Look at Ally's selection of CDs and find one that works best with your retirement plan.