Interest Rates Near Zero Put Savers in a Bind
Paul Hernandez describes himself as “one of those people who believe in standing on your own two feet.” At age 48 he lost a job as a contract programmer for Princess Cruise Lines, and he hasn’t been employed since. For a long time that was fine. His wife was earning a good salary; they lived frugally, childless and debt-free; and they earned a steady investment income from conservative assets such as bank certificates of deposit. Now things are getting tighter. As expected, his wife retired. Unexpectedly, their income from investments has plummeted because of falling interest rates. Hernandez, now 60, blames the Federal Reserve for hurting savers like himself by lowering rates in an effort to spur economic growth.
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