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Low CD Rates and Savings Rates Delay Retirement for Many - CD Rates - Search for CD Rates Today

Low CD Rates and Savings Rates Delay Retirement for Many

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We all know CD rates, savings account rates and other deposit rates have extremely low since the financial crisis and recession. One of the direct side effects of the Fed's policy of driving interest rates into the ground is hurting investors who rely on interest income.

The latest Wells Fargo/Gallup Investor and Retirement Optimism Index shows 1 in 3 (33%) of investors say low current interest rates will delay retirement for them.  

A greater number of non-retired Americans, 45 percent, feel low current interest rates will cause them to live longer then their money lasts. 34 percent of Americans that have already retired also feel they won't have enough money, basically out living their money.

A majority of non-retired investors say lower interest rates are good for consumers and businesses, and the benefits outweigh the costs. That is definitely true for home owners since mortgage rates today are at record lows.

Another interesting thing about this survey is many investors have made riskier investment decisions because of low rates. 26 percent of non-retired Americans have made riskier bets and 19 percent of retired Americans have taken on more risk with their investments. With the best CD rates just above 1.00 percent and inflation at 3.00 percent you have to make riskier investments to stay ahead of inflation.

About one third of investors also feel low current interest rates will lead to a sharp increase in inflation in the years ahead. For the past several years many on the right side of politics feel the Fed's economic policies is causing higher inflation and a declining value of the dollar.

That hasn't happened yet and with an economy slowing down the Fed will probably embark on more quantitative easing to drive long term interest rates even lower.

U.S. investor optimism fell to +24 percent from +40 percent back in February. Besides low interest rates health care costs have also caused many to delay retirement.

Author: Robert Till
June 11th, 2012