Retiring at 65: The New American Pipe Dream
Those on the edge of retirement may be forced to take a step back. By taking “income” out of “fixed income,” the Federal Reserve has made retirement a pipe dream for many. And you can send all your letters of thanks to Federal Reserve Chairman Ben Bernanke.
By investing in bonds and treasuries, those who are heading toward retirement can find comfort in fixed-income returns. These provide holders with a stable income, as the investors know what their annual returns will be and can budget and spend accordingly.
What Others Are Reading : Financial Crisis 2013
When we entered the new millennium, 30-year Treasury bonds yielded more than 6.6% annually. Fast-forward to November 2012, and 30-year Treasury bonds have fallen to a paltry annual rate of 2.9%. That 56.5% drop dwarfs the declines that were experienced in the 90s. (Source: “30 year Treasury Rate,” multpl web site, last accessed November 2, 2012.)
In 2012, Americans need to more than double their wealth just to get to the same starting block in 2000. Unlike the banks, however, you can’t rely on Bernanke to print money and bail you out. You’re on your own—in more ways than one.
As a result, the financial crisis of 2008–2009 saw a large number of Americans exposed to declines in both Treasury bonds and the stock market.
Read More : Retiring at 65: The New American Pipe Dream