How do low interest rates affect retirement thinking?
Long-range planning (or short-range, for that matter) for retirement funding hinges quite a bit on interest rates, since returns tend to influence withdrawal rates which in turn can dictate the durability of your accumulated wealth. But exactly how do interest rates influence decisions? The National Bureau of Economic Research examines this issue in a recent-issued research paper, noting that “Persistent low returns can compel workers to save more and invest differently when allocating across stocks and bonds. Moreover, the low interest rate environment can also change retirement decisions, especially regarding how long to work and when to claim Social Security benefits.”