These are frustrating times for savers.

With interest rates hovering near historic lows for the last two years, investors — especially retirees — are facing tough choices in their pursuit of higher yields.

Do they play it safe and live as best they can with today’s paltry returns from low-risk certificates of deposit, bank deposits and money market funds?

Or do they take more chances and turn to riskier investments, such as longer-term bonds and dividend-paying stocks, in their quest to pull in more income from their portfolio?

It’s a tough question to answer. For now, it looks like interest rates won’t be spiking anytime soon, with the economy still struggling and Federal Reserve Chairman Ben Bernanke pledging recently to keep short-term interest rates low for the foreseeable future.

But the longer term outlook is more uncertain. With the federal government’s stimulus program driving up the budget deficit, some experts fear a spike in inflation is almost certain at some point in the future. That would drive up interest rates, but it’s anyone’s guess when—or if — it will happen.

For now, yields on certificates of deposit are exceptionally low, running at 0.5 percent or less at the major local banks for a one-year CD and

less than 1 percent for two-years. Even yields on much longer, five-year CDs are running between 1 percent and 2 percent, and those put savers at the risk of locking in today’s low rates, only to see yields spike at some point in the next few years.

“We’re at 50-year lows in interest rates, almost across the board,” said Gerald T. Cole, the managing partner at Arbor Capital Management, an Amherst money management firm. “A five-year CD might look attractive now, but in two years might look like death warmed over.”

That forces savers to make some difficult decisions today. Short-term and safe investments are offering paltry yields, cutting into the income stream of many retirees. It also is forcing many retirees to take out more principal from their retirement accounts than the 4 percent withdrawal rate that many financial experts believe is the maximum pull that still gives investors a reasonable assurance that they won’t run out of money in their lifetime.

Yet Brian G. Cannon, the managing director at Dopkins Wealth Management in Amherst, warns that it would be a “huge mistake” for savers to load up on riskier investments in search of higher yields.

“Keep the serious money invested prudently, and resist the temptation to chase yield,” he said.

That, however, doesn’t mean keeping everything in the bank for savers who are willing to take on a little more risk, he said.

Given the economy’s continuing struggles and the Fed’s comments in support of keeping short-term interest rates low, Richard K. Schroeder, an Amherst certified financial planner, isn’t expecting rates to spike. He thinks rates will stay low for another year to 18 months, and when they start rising, Schroeder expects the increase to be gradual.

“Get it out of the bank or money market fund, and put it somewhere else,” Schroeder said.

But where?

The hottest bond funds have been the riskiest. Funds that invest in high-yield junk bonds could appeal to savers because of their 7.7 percent average yield, according to fund tracker Morningstar Inc. And those funds have returned 19 percent over the last year.

But those funds also are super risky, investing in the debt of companies that have the highest risk of defaulting. Plus, the total return of any bond fund will suffer if interest rates start rising. It was just last November when those same high-yield funds were wrapping up a painful one-year period that slapped investors with a 30 percent decline.

“There’s a real desire to look for creative ways to increase yields at this point, but those are to be avoided,” Cole said. “Taking a lot of risk at this point is tantamount to financial suicide.”

Cole thinks the huge budget deficits will spur inflation and cause interest rates to shoot higher at some point in the next few years. As a result, he recommends that savers stick to shorter-term investments and keep risk to a minimum.

He prefers shorter-term, high-quality corporate bond funds, with maturities in the one-to-three-year range. The trade-off is lower returns. The average short-term bond fund yields 2.65 percent and has returned 6.2 percent over the last year, according to Morningstar data.

Investors willing to take on a little more risk could spice up their portfolios by adding stocks that pay dividends. The Standard & Poor’s 500 index currently has a dividend yield of about 2 percent, which is better than the bank is paying, but it also comes with added risk because the principal can go up and down with the stock market.

Cannon suggests a balanced portfolio that mixes bonds and stock index funds. An investor with less of a stomach for risk could put 20 percent in stocks and 80 percent in bonds. A more adventuresome investor could go for a 50-50 mix.

Schroeder thinks investors taking that approach, especially retirees, still should keep a portion of their total portfolio in an ultra-safe investment, like a money market fund. That would give them the liquidity they need so they can tap into that money quickly, without a loss or penalty.

And he warned that the risks that come with the stock market may be too much for some income-oriented investors. “Dividend-paying stocks are great, but I don’t consider them an income investment because you’re going to get price fluctuation,” Schroeder said.

Treasury Inflation Protected Securities offer a hedge against inflation because they’re tied to the consumer price index.

Because they’re government securities, they’re very safe. And while their yields aren’t low, they can appeal to investors who think inflation will come roaring back, Cole said.

Above all, remember that investments that promise exceptionally high yields in today’s ultra-low rate environment almost always carry ultra-high risks, Cannon warned.

Cole agreed: “One of my favorite sayings for situations like this is: ‘Dare to be dull,’ ” he said.