30 • RUBY, WILDING & SWANSBURG My friends and I saved with the mistaken belief our retirement would be the same. We assumed, once we hit sixty-five, we would put our funds into safer instruments and be done with it. Sure, they wouldn’t grow as much in CDs as they did i n stocks, but we could still get meaningful growth on our funds while keeping the m protected. We we re v ery , v ery wr ong. The Past and the Present Think back t o t he 1970s a nd ‘80s. Perhaps you were like me. When I was in my thirties , I opened a checking accou nt at the loc al bank. It was a basic checki ng acco unt, a place to deposi t my checks (remember when you had to drive to the bank to deposit a check?) and pay my bills (remember when you had to wr ite a c hec k to pay a bi ll?). Fro m this account, I was very careful about w hen I pa id my bills. I always waited until the last day possible to write a check and put it in the mail. This odd beha vior wasn’t beca use I wa s brok e; I ha d enough money to cover my bills. Can you gu ess w hy I did this? In 1980, my checking acco unt was earni ng an interes t rat e of aroun d 18 percent. Eighteen percent! I wanted to keep my money in the bank and e arni ng that i nteres t as long as I co uld. It’s hard to remember back when money could achieve meaningful growth in conservative vehicles . It’s just not a reality anymore. Interest rates have been steadily falling since t he earl y 1980s. In response to the 2008 mortgage crisis, the Federal Reserve pushed rates even lower to stimulate the economy.
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