retirement concerns

[notes1]

how about a little diversion from VP into a subject I and hopefully you have an interest in. unfortunately, this is may be limited to the older crowd. I am not asking for financial specifics.

we are all aware that interest rates have been dropping for years. some may not know, but this is by design, via central banks around the world. spurring economic growth and creating a wealth effect, if one owns stocks/bonds, are the reasons given.

my questions are this, has this dramatic decrease in rates had an affect on your retirement or planned retirement? are folks worried about where to put their money, when one of the options frequently chosen has been eliminated? does everyone simply feel comfortable moving large percentages of the wealth to riskier assets? do you trust it will all work as hoped for?

mind you, there are no right or wrong answers, experts are debating this and there are many opinions. I would just like to get some offerings from the folks here.

[billryan]

Part of my retirement plan called for a yearly sum of $30,000 from one set of my investments. Ten years ago, this would have been easy given the interest rates. I've been forced to make some adjustments and tightened my belt a bit. I currently withdraw five percent less than I'd planned for and strive to have five percent left at the end of the month, effectively saving ten per cent per month.
On the other hand, the stock prices of my top dividend stocks.has increased close to twenty five percent so my nest egg is larger than I anticipated.
I'm twenty months away from being able to tap into my IRA.
I'm also a bit more invested in stocks then I anticipated being a few years back.

[notes1]

one of the reasons I brought up the topic is because I have found folks are reluctant to discuss their finances, even with their closest friends and families. some wonder if their situation or concerns are unique to them alone. I thought hearing from others might let them know that others are dealing with similar issues.

BR response and actions are typical from many of the folks I deal with, a little more risk in their investments and a little bit of belt tightening. the other common response has been to delay retirement or continue working in some reduced capacity. it might interest some to know the only age group in America, where a higher percentage of people are working than 10 years ago, are those over 55.

BR's stock performance is also typical and a direct result of these low interest rates, not necessarily improved financial results from the companies themselves. the question many have, how long can it last? I have no answer.

keep the comments coming.

[doris13]

no big changes here aside from moving money out of a cd into my money market account:can you believe i was getting better interest on that money market?i have stocks with great dividends and an annunity that pays 7% for 3 years.house paid for,car paid for,so barring any big disaster i'm good.

[notes1]

7% rate on a fixed annuity, with 3 years left, good for you. now, even when locking up your money for 10 years, the rate is 3% or less.

[doris13]

i went to the bank thursday to renew the cd and was told the interest rate was now 0.1.thats why i closed it and put it in my money market for now,which pays .825.i will probably add some of that money to the annunity.i'm living on pension,ss,and dividends and my biggest expense is catfood,lol.

[seemoreroyals]

i went to the bank thursday to renew the cd and was told the interest rate was now 0.1.thats why i closed it and put it in my money market for now,which pays .825.i will probably add some of that money to the annunity.i'm living on pension,ss,and dividends and my biggest expense is catfood,lol.

All of us that had the foresight to live within our means, be frugal, and save are being punished in the current economy. Like you our biggest expense may well be cat food. When we go to the grocery store we often spend more money on the 5 of them than we do ourselves.

Where we live we can at least get 1% on our CD's when they come due. Somebody somewhere is manipulating all this. I just hope they are not creating a bubble that is sure to burst. There is nowhere safe to park your money anymore that pays any return.

Cat food is actually our 2nd biggest expense. I forgot about health insurance. It is about 5 times higher than is was 5 years ago and sure to go even higher.

[notes1]

All of us that had the foresight to live within our means, be frugal, and save are being punished in the current economy.

Somebody somewhere is manipulating all this. I just hope they are not creating a bubble that is sure to burst. There is nowhere safe to park your money anymore that pays any return.

I forgot about health insurance. It is about 5 times higher than is was 5 years ago and sure to go even higher.

I/m/o, your first sentence is absolute truth and I have been boiling mad about it for years. the media tells a different story.

as far a manipulation and this is not an opinion, you are 100% correct. the FEDERAL RESERVE (usa central bank) and central banks around the world are doing this on purpose. savers are being punished in favor of borrowers.

DB brings up the ever increasing cost of healthcare often and he is right. that is part of the reason your cost of insurance has risen. but, you can also thank Obamacare. approx. 85% of those newly insured are getting a subsidy and you are paying for it. no one told you that was going to happen, did they.

[billryan]

You shouldn't have most of your money in CDs. There are plenty of safe investments that will give a three percent return with no worries. People got lazy when CDs were paying 6 percent or more. Now you have to work for a decent return.
If you are an AARP member, TDAmeritrade has fee free introductory programs. It can literally save you thousands of dollars and get you into a portfolio of government and
Corporate bonds with a sprinkling of blue chip dividend stocks.

[seemoreroyals]

You shouldn't have most of your money in CDs. There are plenty of safe investments that will give a three percent return with no worries. People got lazy when CDs were paying 6 percent or more. Now you have to work for a decent return.
If you are an AARP member, TDAmeritrade has fee free introductory programs. It can literally save you thousands of dollars and get you into a portfolio of government and
Corporate bonds with a sprinkling of blue chip dividend stocks.

I am an AARP member and several of my brokerage accounts are with TDAmeritrade so I have ample exposure to stocks and bonds. The reality of the current economy is that interest rates are artificially low for how long who knows. I was fortunate in that most of my money that I have in both munis and corporate bonds was put there a long time ago. If I decide to move my CD money into bonds at this time I would have to pay a big premium or accept a risk that I am not willing to accept.

As far as stocks go I have mainly stocks that pay dividends such as utilities, telecoms, oil and gas, and a little of everything. My wife and I are in our late 50's and like Doris have no expenses or dependents other than our cats but it pisses me off that people that have worked hard to save their money are having to subsidize all of those that live beyond their means or have bitten off more than they can chew.