A Saint Valentine's Day Massacre

Photograph by Roberto A. Sanchez

Financial repression—keeping rates so low for so long that real rates on savings actually turn negative—has led to an extremely dire situation for retirees and near-retirees. Many of these investors rely on traditionally more conservative, interest-bearing instruments (corporate bonds, Treasuries, and bank CDs) to provide income in retirement. It wasn’t that long ago that rates like 4% to 6% seemed like a sure thing. This is no longer true. Now that rates are close to zero, near-retirees may no longer be confident in their traditional sources of low-risk income, causing them to re-think their retirement timing.

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