Real interest rates - and Retirement in a Yield-Free World


David S Meyers CFP

Saw this very nice article and thought it was worth bringing out for

In particular, the chart of real interest rates is, well, frightening,
and the implications for both fixed income and equity valuations (and
therefore long-term expected returns) are important to note.

One suggestion the author makes at the end is to "boost" yield in
retirement is to annuitize and thereby take advantage of "mortality
credit". Of course, the older one is when one does this, the higher
the expected payout rate. And similarly, current payout rates factor
in both life expectancies as well as the insurance company's ability to
get low-risk yield from their own investments - which means that
current payout rates are very low, too. Finally, unfortunately, he
doesn't mention the huge potential downside to the annuities should
inflation rear its ugly head.

Nevertheless, I believe it's an important article which should be read
by anyone who uses the Trinity Study's results as a rule of thumb.


PS: I've posted the link, the chart, and a note about the article here, too:

David S. Meyers, CFP®
disclaimer: discussions in are for
educational purposes only and should not be construed as financial
advice. For personal financial advice, please consult directly with a


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