https://www.bloomberg.com/news/articles/2019-08-22/nervous-retirees-with-money-to-spare-are-sitting-on-their-wealthDespite ultralow interest rates, advisers say it can be difficult to persuade retirees to tap savings rather than just live on their tiny bond coupons and dividend checks. “Wealth is really a source of identity for people,” Fellowes says. “By spending their wealth, they're losing some of their identity.
Nervous Retirees Are Too Scared to Spend
Even rich Americans worry about living the good life and running short of cash.
By Ben Steverman
August 22, 2019, 2:00 AM PDT
relates to Nervous Retirees Are Too Scared to Spend
Illustration: Joe Melhuish for Bloomberg Businessweek
The U.S. economic recovery, the longest in recorded history, has increased Americans’ wealth by $52 trillion, according to the Federal Reserve. Wall Street is bursting with new money. U.S. stocks trade near record highs. Private equity firms search high and low for places to deploy more than $1 trillion of investor cash. Banks, enjoying a glut of deposits, pay savers interest rates that are minuscule from an historic perspective.
All these riches should generate lots of economic activity. The well-off could be buying themselves little luxuries or doing something more productive, like starting new businesses or expanding old ones. Or they could donate more to charity. At the very least, the extra financial cushion should make Americans feel more secure.
BOTTOM LINE - Wealthy retirees’ reluctance to draw down their savings is trapping millions of dollars that could be stimulating the economy.
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