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Savings accounts only ever paid like, 2% above inflation, right? I wouldn't advise keeping so much money in a savings account you thought you could live off the

Savings accounts only ever paid like, 2% above inflation, right? I wouldn't advise keeping so much money in a savings account you thought you could live off the interest -- you'd be way above the FDIC insurance limit. The transfer from the young to the old in the form of federal support of stock and real estate prices, and various subsidies to health care, is probably larger than the 2% interest and 1% CPI the old have lost.

mikewarot 5y ago
Savings accounts used to pay anywhere from 5 to 8 percent back when inflation was 1 to 2 percent. You didn't expect to live off the interest, but you did expect the drain rate to be far less than with effectively zero interest.
- kamaal 5y ago
  In India it used to be common for elderly to live of interests from fixed deposits, or other instruments of this kind. From a few years Mutual funds have been quite famous, but inflation is so high, nothing really works. Here in India only safe source of income is rent income.
- bart_spoon 5y ago
  They haven’t paid that much for well over a decade. If you’ve failed to take a hint by now and are still keeping all your savings in a bank account, you have no one to blame but yourself.
- gruez 5y ago
  >Savings accounts used to pay anywhere from 5 to 8 percent back when inflation was 1 to 2 percent. source? using the data from FRED https://i.imgur.com/O6EdHco.png https://i.imgur.com/O6EdHco.png, the periods where that was true (ie. interest rates being 4-6 percentage points above inflation is few and far between.
listenallyall 5y ago
For most retirees, inflation doesn't hit nearly as hard. No transportation to work every day, no kids to feed or clothe, home often paid off, generally lower expenses all around. Earning 5-7% off of a savings account, or maybe municipal bonds, was once a huge, reliable supplement to Social Security. As far as the second part of your comment, you should get your head out of the clouds and look around at working-class America. Perhaps 20% of retirees own a significant amount of stock, or own a house worth enough to cash out of. The US median home price didn't even cross $250k until 2018. https://dqydj.com/historical-home-prices/ https://dqydj.com/historical-home-prices/
- pessimizer 5y ago
  > As far as the second part of your comment, you should get your head out of the clouds and look around at working-class America. Perhaps 20% of retirees own a significant amount of stock, or own a house worth enough to cash out of. The US median home price didn't even cross $250k until 2018. https://dqydj.com/historical-home-prices/ https://dqydj.com/historical-home-prices/ Those "retirees" also do not have enough money to retire. To retire and live off the interest of a theoretical 5% interest savings account for 30 years requires you to already be wealthy. If you're a working-class baby boomer, you may have gotten that from your house when you sold it and moved into a bad neighborhood or an apartment. But that's just about the only way other than Social Security and old pensions that you're going to keep eating.

mikewarot 5y ago

Savings accounts used to pay anywhere from 5 to 8 percent back when inflation was 1 to 2 percent. You didn't expect to live off the interest, but you did expect the drain rate to be far less than with effectively zero interest.

kamaal 5y ago
In India it used to be common for elderly to live of interests from fixed deposits, or other instruments of this kind. From a few years Mutual funds have been quite famous, but inflation is so high, nothing really works. Here in India only safe source of income is rent income.
bart_spoon 5y ago
They haven’t paid that much for well over a decade. If you’ve failed to take a hint by now and are still keeping all your savings in a bank account, you have no one to blame but yourself.
gruez 5y ago
>Savings accounts used to pay anywhere from 5 to 8 percent back when inflation was 1 to 2 percent. source? using the data from FRED https://i.imgur.com/O6EdHco.png https://i.imgur.com/O6EdHco.png, the periods where that was true (ie. interest rates being 4-6 percentage points above inflation is few and far between.

listenallyall 5y ago

For most retirees, inflation doesn't hit nearly as hard. No transportation to work every day, no kids to feed or clothe, home often paid off, generally lower expenses all around. Earning 5-7% off of a savings account, or maybe municipal bonds, was once a huge, reliable supplement to Social Security. As far as the second part of your comment, you should get your head out of the clouds and look around at working-class America. Perhaps 20% of retirees own a significant amount of stock, or own a house worth enough to cash out of. The US median home price didn't even cross $250k until 2018. https://dqydj.com/historical-home-prices/ https://dqydj.com/historical-home-prices/

pessimizer 5y ago
> As far as the second part of your comment, you should get your head out of the clouds and look around at working-class America. Perhaps 20% of retirees own a significant amount of stock, or own a house worth enough to cash out of. The US median home price didn't even cross $250k until 2018. https://dqydj.com/historical-home-prices/ https://dqydj.com/historical-home-prices/ Those "retirees" also do not have enough money to retire. To retire and live off the interest of a theoretical 5% interest savings account for 30 years requires you to already be wealthy. If you're a working-class baby boomer, you may have gotten that from your house when you sold it and moved into a bad neighborhood or an apartment. But that's just about the only way other than Social Security and old pensions that you're going to keep eating.