On October 24, the Federal Reserve's Federal Open Market Committee (FOMC) declared that it would maintain its quantitative easing program and low-interest rate policies until mid-2015 at the earliest. While the largest U.S. banks and their management teams were more than likely pleased with this announcement, those whose retirement relies entirely on fixed income assets have no cause to celebrate at all.
Most investors probably remember in 2008 when the U.S. central bank lowered interest rates to the 0.0-to-0.25 percent range in a bid to lower borrowing costs for the nation's then-failing banks. While many praised the Fed for doing so at the time, the justification used to continue this method has slowly quieted and has become a de facto policy standard ever since. With each iteration of quantitative easing has come a promise of holding the near-zero borrowing cost for at least another year, most notably following the Fed's $600 billion purchase of U.S. Treasury bonds.
While the FOMC's "concern" about moderating growth is certainly justified within a particular viewpoint, the fact remains that those who rely on fixed-income accounts as their monthly stipend have been suffering since the zero-interest rate policy (ZIRP) was instituted. Even a report from the Fed itself during June 2012 said as much, when it stated that these incomes declined 17 percent, or from approximately $53,000 to $44,000, between 2007 and 2010.
Those in this position should not rely on the whims of the U.S. central bank and a finance system dependent on stimulus to pay for their retirement. In this case, they may want to consider working with GreatWealthStrategies.com, a firm that specializes in cash flow real estate. This form of retirement income has a long history of stability and can result in competetive profits in a short span of time. Retirees should visit our website today to receive a "Free Game Plan Report."