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I can't believe it has been almost 5 years

October 2nd, 2015 at 07:44 am

Almost 5 years ago, I had some c.d.'s coming due. I had been getting 5% interest. I searched and searched but the best I could find was Melrose credit union paying 2.9% for firve years.
I wondered if I was doing the right thing; tieing up a large sum of money for 5 years at such a low rate.
Now, the 5 years will be up in February and I cannot find anything paying as high as 2.9% interest.
I cannot believe these low rates have lasted for 5 years.
Back in 1977, i was working for a savings and loan place that paid 5 1/4 on savings (daily interest) and 6% on regular savings accounts. Our c.d.'s were paying 8% interest. (One time we even went up to 18% interest.)
My intention always was to save enough money to live off the interest, like all the retired people that could afford it, did back then.
My husband and I have never worked anywhere where we would get a pension, so I knew it was up to us to save as much as possible.

Soon, the 5 year c.d. will be up and I cannot find anything paying as much as 2.9% interest. Ofcourse, it is not nearly enough to live off of, but I am grateful for what we get. Luckily, my husband is still working, but because his job is so arduous and he has hurt both his arm and his foot this year, I don't know how much longer he can continue to work.

However, I will add the interest from my two Melrose c.d.'s to my $20 challenge and just keep on saving!!

$20 challenge balance $16,292.00
Melrose c.d. 2.9% 1657.00
Melrose c.d. 2.8% 393.00
new total $18,342.00

(This interest is for 3 months, the 3rd quarter of this year.)

2 Responses to “I can't believe it has been almost 5 years”

  1. snafu Says:

    Julie, I hope you're not telling us all [100%] of your retirement savings are invested in savings instruments. We who have pensions somewhere in our financial history, know that they invest in a mix of income, equity & international programs no matter how conservative. While you had collected 18% interest at sometime in the past, you've noticed that your savings payout has been decreasing at every 5 year reinvestment point. Some bond mutual funds pay more because they include some higher risk corporate bonds. In the past I've seen several research papers that tout dividing retirement savings into categories based on age. It becomes more conservative over time but even those in their 90's have a slice of funds in equity.

    As you point out, there is significant risk in holding all your eggs in one basket which has potential to grow dangerous when current interest rates loses out to inflation. It's much worse here since our dollar is now worth 70 cents. What international events could come together to cause USD to fall against pound, Euro, Yuan or some other currency?

    Whatever you are holdings in a tax free retirement fund will eventually run into the required distribution program. It has a formula that requires you cash out a taxable sum to deplete your retirement value; those details are best reviewed now.

  2. Ima saver Says:

    No, most of my savings are in mutual funds, most of which have done pretty nicely over the years. I know things are ok right now. Both my husband and I have IRA's in Vanguard Index 500 funds, plus we have other mutual funds also. Plus, I am holding a 25 year mortgage on a house we built, which brings in $1337 a month income. We are trying not to touch any of that money until we need to, but I did have to start taking money out of my IRA last year when I turned 70. Reguired minimum distribution.

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