Save or Invest?

Saving and investing play equal roles in financial security

Saving and investing have different, equally important jobs in the quest for a more financially secure life.

Saving is all about protecting the money you currently have and adding to it from money you earn. All it takes to save is setting money aside in a no-risk, easily accessible place such as a savings account, Money Market account or Certificate of Deposit (CD). Good reasons to save include preparing for large purchases and guarding against job loss or other life-changing events. How much money should you have? Experts suggest 3-6 months of your current expenses.

Investing, on the other hand, is about putting your money into financial instruments where it may generate additional earnings for you. Investing is trickier than saving, because while you may make money, you may also lose some. So you need to select a variety of investments that balance various rates of risk and return to result in a general increase in wealth.

Additional reading you may want to do:

AARP Financial Inc. does not provide tax advice. Please consult a tax advisor for information pertaining to your particular situation.

The information and content provided herein is general in nature and is for informational purposes only. It is not intended, and should not be construed, as a specific recommendation, or legal, tax or investment advice, or a legal opinion. Individuals should contact their own professional tax or investment advisors or other professionals to help answer questions about specific situations or needs prior to taking any action plan based on this information.

AARP Financial is a collection of insurance and financial products, services and programs made available by AARP. Neither AARP nor its affiliate is the provider. AARP contracts with providers to make coverage available to AARP members.

Insurers and providers pay a royalty fee to AARP for use of the AARP intellectual property. Amounts paid are used for the general purposes of AARP and its members.

AARP and its affiliate are not insurance agencies or carriers and do not employ or endorse individual agents, brokers, representatives or advisors.

AARP does not make financial product or service recommendations for individuals. Products and services carrying the AARP name are intended to be competitive products and may not be the lowest priced products. You are strongly encouraged to evaluate your needs and compare products.