Money market funds are generating little if any return. Certificates of deposit aren't doing too much better.
Even 10-year Treasury bonds are only yielding around 1.75%. A slow recovery, ongoing debt problems in Europe and uncertainty about future economic growth have sent many investors rushing to the safety of Treasury bonds, driving down yields.
And the problem isn't going to get better anytime soon. In mid-September, the U.S. Federal Reserve Bank announced its latest round of "quantitative easing" or QE3. Designed to stimulate the economy, the move is expected to keep interest rates low through at least the middle of 2015.
This is a dangerous environment for those searching for sources of retirement income.
Low Rates Kill Retirement IncomeLow interest rates are a problem for virtually all investors, but are particularly troublesome for retirees, who need their assets to generate income to supplement Social Security and private pensions to help pay for day-to-day living expenses.
This is just another obstacle facing Americans, who have already not saved enough, in assuring themselves a secure retirement.
According to the Employee Benefit Research Institute 2012 Retirement Confidence Survey, only 14% of workers say they are "very confident" that they have saved enough money to live comfortably in their retirement years.
While part of the problem is due to simply not setting aside enough money, the difficulties are compounded by the changing retirement landscape. A generation ago, our parents and grandparents depended on Social Security, a private pension and a small nest egg to pay for retirement.
Not so today.
According to an ING retirement survey, Retirement Across the Ages, only about 47% of those over age 65 are receiving payments from a traditional pension plan. For younger workers, that number drops significantly. And the promise of receiving a significant amount of money from Social Security weakens with each passing year.
That means that people who are retired today, or those who plan to retire soon, need the money they have accumulated in 401(k) plans, IRAs and private savings to work even harder for them. Otherwise, they risk not having enough assets to fund a retirement that could last for 20 to 30 years or more.