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How the Fed hurts retirees

The Federal Reserve has kept interest rates near zero since 2008, but the economic boost comes at the expense of these savers.

Canceling vacation plans
Canceling vacation plans
Henry Baker III, 75
Jacksonville, Fla.

Just a few years ago, I was earning 4.7% interest on my $80,000 in savings. The income paid for a week-long vacation for me and my wife, plus more.

In 2011, that rate dropped down to 0.15%. It's ridiculous!

I took everything out of CDs at the beginning of this year when my bank closed (another unfortunate sign of the times), and I went to a bank that offered a special checking account with a 0.5% interest rate.

Within six weeks of opening that account, it dropped to 0.35%. That said, it's still better than any other investments I can find, including bonds.

About a quarter of my net worth is in that checking account. The rest of my funds are invested in mutual funds and a few individual stocks.

When a retiree today loses investment value, they have to pull from somewhere to meet their expenses. As you trim interest rates, it starts hitting us in the pocket.

I don't even know if we're going to make a trip this summer.

As told to Annalyn Censky @CNNMoney - Last updated March 23 2012: 1:49 PM ET
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