How Has the Financial Crisis Affected the Finances of Older Households?

This brief considers the impact of recent declines in stock prices and nominal interest rates on older households. Between October 2007 and March 2009, the S&P 500 index declined by more than 50 percent, and in August 2011 remains 24 percent below its October 2007 peak. But dividends on stocks fell by only 10.6 percent between October 2007 and June 2011.1 Short-term nominal interest rates have fallen close to zero, and seem likely to remain at depressed levels for an extended period.