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How The Fed Hurts Retirees

Wednesday, March 28, 2012 - 5:54 AM
CNNMoney article (via Yahoo Finance) has interviews with several retirees who describe how they have adapted to the very low interest rates. It's interesting to see a few of them so willing to invest in stocks. If we get another big stock market crash, there's going to be a lot more pain. In addition, a crash is likely to drive interest rates lower as people move back to bank accounts and as the Fed tries to give the economy more stimulus.
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
1. Wednesday, March 28, 2012 - 8:31 AM
We appear stuck on a perpetual motion treadmill. In order to keep the markets going up, and the government's borrowing costs low, Bernanke will continue his rock-bottom rate policy. If the markets correct, or crash, due to some outside factor then rates will remain low, or go lower.  Thus, do we assume going forward that rates will never go back up as long as Bernanke is Chairman of the Federal Reserve?
ShorebreakShorebreak2,622 posts since
Apr 6, 2010
Rep Points: 14,216
2. Friday, March 30, 2012 - 11:03 AM
Unfortunately, investing in stocks may be a "necessity" rather than a choice at this point in time, with savings accounts, cd's, etc. not making the grade for needed income. Certainly a much riskier alternative for sure.

MrFrugalityMrFrugality8 posts since
Oct 6, 2011
Rep Points: 21