I'm 60 years old, unemployed and have $100,000 saved for retirement. Given my circumstances, I can't afford any losses. So I'm considering converting this money to gold and cash. What do you think? -- Robin, Scottsdale, Ariz.

Given your circumstances, I think you would be making a big mistake moving your hundred grand to gold and cash.

Let's start with gold. For all the hype about gold being a safe haven, the reality is that it can lose value as easily as the stock market. If you had plowed all your money into gold last September when it was selling for just under $1,900 an ounce, for example, your $100,000 stash would only be worth a little more than $84,000 today, since gold now goes for around $1,600 an ounce.

So whatever other merits gold may have as an investment, shielding you against losses isn't one of them.

Cash, on the other hand, can provide such shelter. Stick your hundred thousand in an FDIC-insured bank money-market account and, barring the U.S. government reneging on its promises, you can be certain that you'll always be able to draw on your entire original principal, plus any interest you earn.

But that interest, or lack of it, is the problem. Today, federally-insured bank money-market accounts that give you ready access to your money pay only 0.5% on average.

You can find higher yields by shopping around or by going to CDs that charge a penalty if you withdraw money before maturity.

But the return you'd earn probably still wouldn't keep pace with inflation. Which means that even though you may not be losing money per se, you would likely be losing purchasing power as inflation erodes the real value of your $100,000.

So I recommend that you think about your situation in a different light. Instead of trying to avoid any loss of any size at any time, focus on preserving capital in a way that protects your hundred large from devastating setbacks, but allows it to grow before and during retirement.

That way, you'll have a better shot at being able to rely on your savings stash not just today, but down the road.

Read more:
Unemployed at 60 With $100,000 in Retirement Savings