The most significant driver of the financial markets over the past 13 years has been the relentless effort of the Federal Reserve and other global central banks to push down interest rates. These near-zero short-term rates have had profound ramifications. Prices of other assets (such as stocks) have risen as investors have moved out of traditional safe havens into riskier investments searching for better returns.

Retirees have arguably been the group hardest hit by this extended near-zero interest-rate policy. Traditional savings products (such as money-market funds and bank CDs) yield very little, eliminating one traditional safe haven. Bonds performed well as interest rates declined (bond prices rise as yields fall), but with rates now at rock-bottom levels (and potentially poised to rise), future bond prospects are very much in question.

In their search for alternative sources of current income, some retirees have turned to dividend-paying stocks. For the most part, this has worked out well. Stocks have risen dramatically since 2009, interrupted occasionally by brief corrections along the way.

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