Retirees savaged by plunging interest rates

Rock-bottom interest rates and rising prices are leaving some retirees up to $50,000 a year worse off than they were a few years ago.

And broker Chris Timms of Craigs Investment Partners warns it could get worse before it gets better.

"Back in 2008 if you had $1 million in the bank on a six-month term deposit you were probably getting interest of around 8.48%, which gave you a gross income of just over $84,000.

"But today you're only getting 4.38%, which means you're getting $40,000 a year less. Factor in rising prices and the gap is more like $50,000." 

 

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