Retirees
YIELDS ARE BACK!!!
As your financial advisor, I understand the importance of higher interest rates on savings for retirees. When interest rates are higher, retirees can benefit in several ways. Firstly, it can lead to higher income from fixed-income investments such as bonds and certificates of deposit (CDs). Retirees often rely on these investments for a stable source of income, and higher interest rates mean they can earn more from their savings, which can help maintain their standard of living during retirement.
Additionally, higher interest rates can provide retirees with the opportunity to preserve their purchasing power. This brings us to the significance of earning a positive real rate of return. In retirement, it is not just about earning a return on your investments; it is about ensuring that your investments outpace inflation. A positive real rate of return means that the return on investments exceeds the rate of inflation. This is crucial because inflation erodes the value of money over time. Retirees need their savings to grow or at least maintain their real value to cover increasing expenses over their retirement.
In conclusion, for retirees, higher interest rates can boost income from savings, while earning a positive real rate of return is essential to protect against the erosive effects of inflation. As your financial advisor, I recommend carefully balanced investments to achieve these objectives, considering your risk tolerance, time horizon, and financial goals.