Today has to be one of those days when retirees have to be reminded about how much they have been screwed over by Ben Bernanke. They are one of the largest victims of Bernanke's "easy money" policies.
For example: let's say you've hit retirement with $1M combined through savings and 401K, and your house is paid off. You're just ready to enjoy retirement, no high-rolling lifestyles in your dreams. Get a 5% annual return through a combination of long-term CD's and some some fixed income mutual funds, and you've mentally penciled in 50K a year with some social security on top of that. So maybe $70K year total. No need to save anymore, so all of travel plans you've put off are now a reality.
But then because of Bernanke and the Fed, instead of that 5% a year, you're looking at a 2.5%. Just like that, you're yearly cash flow is down $25K a year. 4 cruises in 1 year, just went down to 2 cruises.
And of course, that's a lot of potential discretionary spend that has been taken out of the economy.
