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Ultra-low interest rates delay retirement plans

One-third of investors say they may have to put off retirement because low rates are preventing them from earning enough in retirement accounts

June 08, 2012 11:36 IST | India Infoline News Service

Ultra-low interest rates on retirement accounts may force many US citizens to delay their golden years,according to a new survey released on 6th June.

The Investor and Retirement Optimism Index Survey was conducted by Wells Fargo and Gallup. The survey randomly chose 1,018 investors and was carried out between 4th to 12thMay.

The study defined an investor as a head of household or a spouse in any household with total savings and investments of $10,000 or more. The sample was made up of 75% non-retired investors and 25% retirees. The survey has a margin of sampling error of plus or minus 3 percentage points.

The survey said, one-third of investors say they may have to put off retirement because low rates are preventing them from earning enough in retirement accounts. Americans wanting to retire are compensating by working longer or scaling back their retirement dreams.

Some people are taking more investment risks. Slightly more than one-quarter of pre-retirees and 19% of current retirees, say they are making investments they otherwise “might have avoided,” the survey said.

The survey demonstrates the significant effects that low interest rates on bank accounts and many types of bond mutual funds are having on the retirement expectations of US people.

“Some people may feel like they are pushing mud up hill,” said Karen Wimbish, director of retail retirement at Wells Fargo.

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