In my last missive I described the unfortunate burden that ultra-low interest rates causes everyday Americans. Those especially burdened are those Americans who are trying to save some money or those trying to use their hard-earned savings for income to live on during retirement. For the last four years the interest rate, and the resulting interest, from a six-month or one-year Certificate of Deposit (CD) is less than a tenth of its average over the last half century. This is creating an large problem for those trying to live off the assets they've accumulated. To bridge the gap, many of those individuals have either taken unwanted risk in the stock market, been forced to go back to work to survive or simply cut back their standard of living to adjust to a substantially lower income.
David A. Pace, CFA
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