Image source: Getty Images

It’s not uncommon to retire only to see your net worth start to decline pretty soon after. A lot of people retire and immediately begin spending down their savings.

If you go that route, that’s OK. The whole reason you have savings for retirement is to spend that money to cover your costs once your paycheck goes away. But you should know that it is possible to grow your net worth even once you’re retired. Here are some options to consider.

1. Invest in municipal bonds

It’s important for retirees to be mindful of taxes, especially since many live on a fixed income. But if you’re interested in a tax-friendly way to build wealth, consider investing in municipal bonds.

Municipal bonds are issued by state and local governments to raise funds and support projects. When you buy municipal bonds, you may be helping fix roadways, build schools, or rehabilitate public parks. And from an investing standpoint, the upside can be big.

Not only do municipal bonds pay interest (generally twice a year), but that interest is always exempt from federal taxes. And if you buy municipal bonds issued by the state you live in, you can avoid state and local taxes on that interest, too.

2. Invest in dividend stocks

There’s no rule stating that retirees can’t own stocks. You don’t want to keep the overwhelming majority of your portfolio in stocks since they can be volatile. Retirement is a time when you might need to sell stocks for cash, and that could be a problem during periods when the market is down.

But it’s definitely okay to keep a portion of your portfolio in the stock market during retirement. And you may want to focus on stocks that pay dividends for the ongoing income.

Though earning dividends is never guaranteed, if you invest in companies with a long history of paying them, there’s a good chance they’ll continue to come through. Or you can look at adding a dividend ETF (exchange-traded fund) to your brokerage account, which lets you own a bunch of dividend-paying stocks at once.

3. Put money into CDs

The financial upside of opening a certificate of deposit (CD) isn’t always so substantial. During periods when CD rates are low, there may not be much of a difference between opening a CD and sticking to a regular savings account.

But during periods when CD rates are up, which is the case today, it pays to open one. Unlike a savings account, a CD gives you a guaranteed interest rate on your money. And you can take advantage of today’s stronger rates by opening up a longer-term CD, such as one with a 48- or 60-month term. Click here for a list of the best CD rates today to explore your options.

If you have income that’s guaranteed from Social Security, which may be the case if you’re retired, then a longer-term CD becomes less risky. You’re less likely to face an early withdrawal penalty if you have a Social Security check coming in every month you can use for bills or unplanned expenses.

Just because you’re retired doesn’t mean your net worth must automatically shrink from here on out. Use these tools to continue building wealth throughout your senior years. It’s never a bad thing to have extra money. And if you don’t end up needing all of yours in your lifetime, you can leave a financial legacy behind to the people who mean the most to you.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.