Retirees feel pain from interest-rate cuts

0 Comments | Philadelphia Inquirer, The, March, 2008 | by Harold Brubaker Inquirer Staff Writer

While Wall Street was cheering yesterday's interest-rate cut by the Federal Reserve, an 84-year-old Bucks County retiree was grumbling on behalf of people on the losing end of the reduction. "I don't think it's quite fair," said Bob Delp, who fears losing $4,000 in income when he rolls over two 15-month certificates of deposit that are yielding 5 percent.

Since September, when the Fed started cutting the federal funds target rate, the average yield on a one-year CD has fallen from 3.76 percent to 2.33 percent, according to Bankrate.com. Losing $4,000 in annual income will make a big difference to Delp and his wife, who live on about $35,000 a year from Social Security, a small pension, and savings. Delp said the couple pay about $4,000 a year out-of-pocket for medicines....