Retirement money market accounts (MMAs) are special accounts set up and administrated within a retirement account, such as a 401(k) or an individual retirement account (IRA). The main purpose of a retirement MMA is to provide liquidity and stability during retirement. They are structured to pay low interest rates but offer more flexible access to funds than other retirement accounts.

Retirement MMAs are different from traditional money market accounts held at a bank. Money market accounts held at a bank are FDIC insured, and this federal protection does not apply to retirement MMAs. However, retirement MMAs administered by financial institutions like mutual funds, brokerage companies, and insurance companies are typically subject to the same industry regulations that protect their other types of retirement accounts.

Retirees typically favor retirement MMAs because of their liquidity and convenience. Once the retirement MMA account has been established, the account holder can use it to write checks, make withdrawals, and transfer funds. This makes it easy to manage a retirement income without worrying about having sufficient funds on hand, or having to search for alternative liquidity sources in case of unexpected, large expenditures.

Just like other types of retirement accounts, the funds within retirement MMAs are taxed as per IRS rules, so it is important to read up on the applicable tax rules for retirement accounts in order to make sure that all money transferred in or out of retirement MMAs are properly handled.

In summary, retirement money market accounts are an attractive option for retirees looking for a way to access their retirement funds, while still preserving liquidity and stability. When selecting a retirement MMA, retirees should make sure to consider the fees, interest rates, and other factors involved in order to find the right fit for their needs. With careful planning, a retirement MMA can help retirees make their retirement years easier and more fulfilling.