Low Interest Rates not all bad for Retirees
Wednesday, November 01, 2017
It has been thought for quite some time that interest rates in Australia will remain low and this is still the school of thought. There are many reasons why we need low rates and many benefits in them staying there. Policymakers don't seem to want to even entertain the idea of significant rises because of the potential damage that would do to the economy.nificant rises because of the potential damage that would do to the economy.
Over the past thirty or so years we have had unusually high interest rates compared to the longer history of the markets in its entirety. During this 30+ yrs it became the norm for retirees to depend on these unusually high rates to provide their income off the back of their retirement savings.
Over the past 7 years reality has set in for many and they have started looking for alternatives to bank interest for their income. However there are still many retirees stuck in the reality that interest rates are historically low and are left eating into their capital for their daily living requirements.