Why Lower Interest Rates Aren’t Good News for Retirees
October 16, 2019 by Nahum Daniels
Interest rates keep dropping, causing rising concern among some retirees, financial experts say. That’s because, while cutting lower interest rates can stimulate the economy by making it cheaper to borrow, consumers usually earn less interest on their savings. Falling interest rates are part of what economists call “financial repression,” which can pose challenges to retirees and to those who are nearing retirement, says Nahum Daniels, author of Retire Reset!: What You Need to Know and Your Financial Advisor May Not Be Telling You.
“Our banking system does not shoulder a specific mandate to provide financial security to America’s retirees,” says Daniels. “In fact, some of its actions may actually prove harmful.
“Retirees need to know how financial repression will affect them, and what, if anything, they can do to counteract its consequences without creating even bigger problems for themselves.”
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