Historically, 5% has been a good yield to get on a CD or Treasury bond. I've decided to lock in that return for 20 years with some of my fixed income funds. When I started working my goal was to save a million dollars and earn 5% interest to yield $50,000 per year. That would have been about 2-1/2 times my starting salary.
Of course, critics will note that I wasn't accounting for inflation and increased lifestyle amenities back then. However, in my experience, 5% has been on the higher end, but not the highest, of interest rates. So, I've decided to lock in 5% for 20 years for a portion of our investments in fixed income. If interest rates go up, I can invest some more at higher rates. If interest rates go down, I already will get 5% for up to 20 years. Since it is uncertain which way rates will go, getting 5% long term seems like a win-win for me.
This is not financial, saving, nor interest rate advice. Please consult a professional advisor.
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