I’m 66 years old, retired, and I own a comfortable house in Fort Worth. I have $143,000 in cash that I’d like to invest for my retirement — what should I do with it?

Is it a good time to start investing?

Investing involves uncertainty, which is the last thing many of us want right now. The U.S. is undergoing a leadership change, and the incoming administration has made it clear they plan to shake up the status quo. There’s also a significant threat of global war due to conflicts abroad. As such, the stock market may be more volatile than ever in the coming years

While these risks are very real, the risk of being too conservative also can’t be discounted. If you’re just spending your money without earning returns, it's more likely your funds will run out while you still need them.

Your best bet is to balance “riskier” investments with higher potential returns and safer investments that will earn you limited gains. A common rule of thumb is subtracting your age from 110 and putting that amount in equities. Using this rule, a 66-year-old would put 44% of their money into equities and 56% into fixed-income investments, such as bonds.

This approach can limit potential losses in a market downturn, especially if you keep some funds in cash. This way, you won’t be forced to sell equities to provide income during a market crash. If you’re retired and need to draw from this money, limiting losses and avoiding too much exposure to market fluctuation is crucial.

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How best to invest the money

Beyond figuring out your ideal asset allocation, you must also know what to invest the money in. Keeping in mind that everyone’s situation is unique, an exchange-traded fund (ETF) that tracks the S&P 500 is an obvious solution for domestic equity holdings. The S&P 500, made up of 500 of the largest companies in the U.S., has consistently produced 10% average annual returns for decades. You’ll be charged minimal fees in an ETF since it’s not actively managed, and you get instant diversification.

From the remaining funds, you’ll likely want to set aside a few months of living expenses in a high-yield savings account where it's accessible and then consider other options, such as:

• Bonds: Bonds are considered debt instruments. You’re essentially loaning money to a corporation (corporate bonds) or the government (Treasury bonds) in exchange for regular interest payments until the bond matures.
• Certificates of Deposit (CDs): CDs are investment vehicles usually purchased from banks. They typically provide a higher return than a savings account, as the investor agrees to “lock in” their money for a set period (usually three months to five years). The issuer guarantees both the interest rate and principal balance.

Bonds can be advantageous for some retirees, as interest is usually paid quarterly, so you have a regular income stream. They also often have higher interest rates than CDs. Bonds aren't FDIC-insured like CDs, but if you buy Treasury bonds, you’re betting on the full faith and credit of the federal government, so you aren’t taking a significant risk.

Ultimately, investing your money is your best option to stretch your savings — but only once you’ve considered your risk tolerance and set aside ample cash.