First Person: Is the FOMC Sabotaging My Retirement Account?

Yahoo Contributor Network

This past week, the FOMC released its minutes to the most recent meeting, and shocked the world with its dovish rhetoric, sending the Dollar lower. Ben Bernanke will leave his post with interest rates at a steady low, and a weak Dollar. There will be no tapering of QE (quantitative easing) anytime soon, and interest rates will remain at all-time lows in the United States. So where does that surprise decision leave the average American consumer? It leaves us lacking confidence, savings, and safety.

Lack of Confidence

I have a great deal of confidence in the U.S. economy, but apparently the FOMC and Ben Bernanke do not. They lack confidence in the growing jobs market, despite good jobs numbers; and the Federal Reserve Board lacks the courage to raise interest rates and get the United States back in the game. That's truly disappointing. Such a tone can only discourage the average consumer, as well. It's like our baseball coach saying he's not going to buy new uniforms because our team has no chance of winning. Can we expect to play well after that?

Lack of Interest Earnings = Lack of Retirement

My savings account is growing at a snail's pace. Earning 1% interest is not earning, it's stagnation. I could take the money to Vegas and gamble to beat 1%. It's pathetic, and it's gone on far too long. Recently I shifted some of my money into riskier assets, but it wasn't by choice. I just don't think I can retire comfortably if my money earns 1% for the next 20 years. Most consumers are in the same boat, and that boat isn't moving anywhere. The FOMC has cut our oars to half-size.

What can we do?

One alternative is to shift your money to a foreign back account. In Australia, you can get 5%, but most people don't qualify for such an account. You have to live part of the year outside the U.S. to have a foreign bank account. The American government says you can't earn interest here, but you also can't go elsewhere to get it. I opened a Forex account in the U.S., where I can legally earn higher interest. Not everyone is so attuned to finance to manage such an account.

For most people, there's nothing you can do, unless you want to risk your retirement on unsafe investments. CD's and savings interest will continue to be meager for the next year, according to the FOMC's tone.

For now, I'm using foreign currency accounts (forex) and a few risky investments to try to get more earnings for my retirement savings. Meanwhile, I hope to see a new FOMC board next year, one that actually understands the dynamics of interest rates and it's country's retirement savings, and maybe even has some understanding of economics. Clearly the current FOMC does not.

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