Conventional wisdom has it that today’s low investment yields tend to harm low-income retirees, who receive little or nothing from the bank accounts and bonds they had counted on for spending money. That’s certainly the case, but a recent study from the Employee Benefit Research Institute (EBRI) found that low yields have even more impact on younger workers as well as on people with high incomes. Agreeing with those conclusions, Barton Close, vice president of investments, in the Chattanooga office of Raymond James & Associates, told On Wall Street, “Those low yields have turned around my strategies 180 degrees. Now I put more focus on current cash flow.”

The EBRI study compared a world with historic investment returns, including a 2.6% real (after inflation) return from bonds, with a world where sustained low yields dropped the real bond return to -1.4% a year, as was the case early in 2013. Counting all assets—investments, Social Security, pensions, home equity—the change in bond returns raised the probability of running short of money over a long retirement.

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