Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Low interest rates are a double-edged sword: They are great for your mortgage payments but they are bad for your retirement savings. The truth is that when rates are low, the economy is not in good shape. The Federal Reserve lowers interest rates to increase spending and encourage short-term investments. These lower interest rates result in lean retirement for savers because their money doesn’t earn the interest they might have expected.
What retirement investors can expect
Jack VanDerhei, the research director for the Employee Benefit Research Institute (EBRI), warns that nearly 25 percent of baby boomers and generation X investors—who had anticipated having sufficient retirement savings when interest rates were average—will run out of retirement income if the low interest rates are permanent. With that in mind, it is important for investors to account for low interest rates when reviewing their retirement savings plans.
Five options for retirement investors
There are several options for investors who are facing leaner retirements. When interest rates are low, your primary goal should be to protect your income. Determine what you want from your money, including immediate, short-term, and lifetime requirements. Then, make a decision and start a plan.
1. Prioritize finances. Work on paying off accounts with high balances and high interest rates, focusing on accounts that have interest rates in the double digits. You don’t want to spend your retirement income on paying interest—put the money in your pocket instead.
2. Consider alternative investment strategies. Talk to your financial advisor about creating a comprehensive investment plan that spreads out your investments. Avoid long-term money market accounts and CDs—you don’t want your money to be locked up if the interest rates go back up.
Also, avoid risky, high-income investments that promise a large return. Consult with a financial advisor to help you completely understand the product.
3. Ladder annuities. Purchase one immediate annuity each year. Instead of tying up your money in one account with one interest rate, each immediate annuity will have its own interest rate. Fixed indexed annuities create a guaranteed income that you can’t outlive.
4. Choose strong companies. If you are interested in investing in stocks, make sure you are choosing quality companies with strong dividend payments. Don’t take on risky investment strategies without understanding your exposure and potential for loss. Meet with an advisor to create a unique investment plan that caters to you, and limit your volatility when choosing a plan.
5. Be prepared. Don’t rely on a one-size-fits-all approach to your retirement. You need to be ready to adjust your target income and asset allocation each and every year in order to keep up with the current condition of the market and to protect yourself from increases and decreases in rates.
When it comes to retirement, it’s important to be flexible and adapt to change. Otherwise, you might be stuck working a lot longer than you expected—or be forced to live with less.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.