Tough Times For Savers | NBC Southern California

Tough Times For Savers

    processing...

    NEWSLETTERS

    Tuesday's decision to keep interest rates low was applauded by investors and borrowers. But savers think it's low rate. (Published Tuesday, Aug. 9, 2011)

    Carl VonWolfrat has the luxury of playing golf while some of his friends have to stay home.

    "So many of my friends have run out of money," laments VonWolfrat. "And they're the ones who've saved all those years and they got penalized and I feel sorry for them."

    Many people with money in the stock market, or a heavy debt burden, may have been pleased by Tuesday's decision by the Federal Reserve Board to keep interest rates low. But people who saved money for retirement, hoping to supplement Social Security and perhaps retirement checks with interest income are out of luck.

    "You learned from your parents years ago, when we went through the depression, to put a little money away," said Nancy Nign. "But these young kids, they don’t do that, they spend their money foolishly."

    Even Edward Wedbush, whose investment business might benefit from low interest rates, wonders if the Fed's move is good for America in the long term.

    "It sends a message to people who are saving money, particularly retirees, that your savings are not worth anything," said Wedbush.

    "What’s so disheartening to me is we teach people to save throughout their life and we disable the result of those savings by this Federal Reserve option. I’m extremely disappointed with it."

    In essence, Wedbush says, the spenders are being rewarded, or at least encouraged. But savers are being punished, or at least overlooked.