usa retirees live on 2% odd interest

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    ............& that is connsidered a 'bonus'. Surely that feeble rise in rates will not take funds from the US stock mkt.

    This from CBS news


    The increases are especially beneficial to older Americans living on fixed-income investments who've gotten a pittance for their cash deposits in recent years, including for certificates of deposit and bank savings accounts.

    In fact, money-market investors have been losing money over the past three years since account and fund yields fell well below the 2.2 percent annualized rise in the Consumer Price Index over that period.

    "They haven't been able to keep up with inflation," said Harold Evensky, a financial adviser in Coral Gables, Fla. "But aside from the yields, money market funds provide you with liquid cash."

    Money-market accounts and funds generally hold government or corporate debt with maturities of less than 90 days and are thus highly sensitive to swings in short-term interest rates.

    Unlike bank money-market accounts, which carry $100,000 in Federal Deposit Insurance Corp (FDIC), money-market funds carry no such insurance and charge 0.56 percent in average annual expenses, which accounts in part for their lower yields. As of June 30, there was $1.5 trillion invested in money market funds, according to Lipper.

    Some experts suggest yields are approaching a level that will draw more money into these investment vehicles. For those with a minimum $25,000 to invest, for instance, the average money market account yield is 1.93 percent -- nearly half a percentage point higher than low-minimum accounts.

    "It's a better time to look at money-market funds if investors are looking for yields," said Joel Friedman, director of Standard & Poor's Financial Services.

    Added Morningstar analyst Scott Berry: "Investors who have ignored these funds over the past year or two should at least start giving them more consideration."

    The Securities and Exchange Commission may look at the fees charged by these funds, which could mean higher yields down the road, he added
 
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