Quote:
Originally Posted by GregWeld
People get mad at me when I say I'm hoping for raging inflation... and that I'd love to see 10% CD rates. Actually if truth be known - anyone that is living off their money would love to see a return to these kinds of rates. In retirement you're most likely (key statement - MOST LIKELY) not buying as much "stuff"... Your mortgage is most likely locked in or non-existent. Even if you have one - like Mike pointed out - paying 4% and making double that - is a good thing.
While nobody really actually wants inflation, it's good for retirees. It's just a no brainer for folks to be able to put money into super safe bonds or CD's or Treasuries and make acceptable returns. High return rates actually RAISE the buying power for these folks... but, of course, at the expense of those that are still working and trying to raise families and buy homes and cars etc. That's why inflation and high rates are "bad". But the historic low rates on these same investments have been really bad for the retiree for several years now. This is particularly true for those with the lowest amounts to retire on. The difference between making 7% on 300K and making 3 or 4% on that same amount is just huge to that family.
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Right now we are seeing a lot inflation, but rates are being held way too low. So the while the cost of living is going way up, the SS checks are not reflecting that and rates are way too low for investments to keep up for the average retiree.
I was listening to this guy on the radio and to me, he knew exactly what game was being played and how to win it..
http://www.amazon.com/The-Boomers-Gu.../dp/1599322935