The latest Conference Board's Consumer Confidence Index stood at just below 80 percent in February, compared to 144.7 at the height of the 2000 dot-com boom. That's even though the Standard & Poor's reached a record high last week, having soared about 180 percent from its March 2009 low.
That is largely because consumers still face plenty of obstacles, including falling household income — which has slid 6 percent since March 1998 to a median of $52,297, according to Sentier Research. At the same time, prices have gone up for important goods and services — including medical care, food and gasoline while interest rates on savings remain low.
It is that last factor that has those saving for retirement particularly concerned and not feeling too ebullient about the resurgent S&P?
Recommended For You
Since the Great Recession, the Fed's near-zero interest rate policy and bond-buying program have taken a toll on fixed-income investments.
"It's a terrible tax on senior citizens who are trying to have income for their retirement," former FDIC Chairman William Isaac said last week.
A little more than a decade ago, for instance, the interest rate on a five-year CD was well above 5 percent, while today it's at 0.8 percent, according to Bankrate.com.
It's a major change that has shaken the traditional model of retirement planning, said Greg McBride, senior financial analyst at Bankrate. "The sharp reversal in interest rates has dramatically cut the buying power of retirees and anyone else dependent on a fixed income," he explained.
If someone saving for retirement decided to stick with stocks over the past five years, they may be in better shape, other economic factors aside. If not, he said, "The train may be back at the top of the mounts, but you're not there unless you stayed on the train."
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
