Bernice Rudick says she feels lucky she picked up a part-time job six years ago. If she weren’t working now, the 83-year-old widow might be hurting even more after a bear market cracked into her retirement nest egg.

“Everything’s gone down,” said Rudick, who answers the phones a few days a week at Plymouth (Mich.) Township Hall. She’s particularly upset with lower dividend payouts and isn’t interested any more in low-rate certificates of deposit.

As it is, she’s cutting back on spending here and there. One budget-trimming trick: She’s stopped subscribing to some magazines, including Martha Stewart Living, Country Weekly and Southern Living. She enjoys cooking magazines but can’t afford too many, now that low rates are paid on her savings.

“You start watching things a little bit closer,” Rudick said.

For all the buzz about how cheap money can get consumers to buy homes and cars and boost economic growth, there is a flip side.

Rates have downside

Retirees and other savers who live on stock dividends and interest income from their savings have lost out big time in recent years. Companies such as Ford Motor Co. slashed their dividend checks.

And interest rates have fallen since the Federal Reserve began cutting short-term interest rates in January 2001. Lower rates left retirees and others who put most of their money in the bank with less extra cash.

“I’ve talked with a lot of retirees who are pretty angry about it,” said Diane Swonk, chief economist for Bank One in Chicago. “They aren’t too happy with Alan Greenspan right now.”

Even Greenspan, chairman of the Federal Reserve, reportedly is losing out.

Greenspan keeps almost all his own money in money market funds and Treasury bills to avoid what could be seen as a conflict of interest. So lower rates did a number on his conservative portfolio, too.

Based on a disclosure in July, Greenspan generated between $55,000 and $139,000 in income on his holdings last year. He does not report exact figures for his assets and income, just ranges.

That’s less than half the reported interest income for 2001 and down about two-thirds from his reported 2000 earnings from Treasury bills and savings.

Skimpy savings rates are hitting nearly everybody with CDs and savings accounts. And the hit is sizable for retirees with a lifetime of savings.

Consider this: Just three years ago, it wasn’t hard to get a 6 percent annual return if you locked up money in a five-year CD. It was a good time for CD rates. So on $100,000 in savings, one could be making $6,000 in interest each year with a higher-rate CD issued a few years ago.

Now, savers can see less than half that rate.

If you put $100,000 into an average five-year CD bought in early July, the annual income from interest would drop to about $2,450 a year. The average annual yield on a five-year CD was 2.45 percent by early July, according to Bankrate.com, which tracks interest rates and banking trends.

The most pitiful payback has been for those who aimed for easy access to their money. Money sitting in a money market account is paying next to nothing now.

A money market saver was getting 0.52 percent on average by Aug. 13, according to Bankrate.com. That compares to an average yield of 2.12 percent on a money market account at banks three years ago.

On $100,000 in savings, a retiree might see about $520 a year in income from a money market account. That’s down from about $2,120 just three years ago.

Financial planners and economists say that, if savers can, they need to ride it out and wait some time for higher rates. Low rates, they tell us, won’t last forever. And this summer, stock prices have been picking up.

We’ve already seen some uptick in rates.

Since early June, yields on 10-year Treasury bonds have risen significantly. They moved from 3.07 percent in mid-June to 4.41 percent by Aug. 6.

So far, that’s meant a nudge up for five-year CD rates and a nasty hit for bond fund investors. The average yield on a five-year CD moved to 2.76 percent, based on the Aug. 13 survey by Bankrate.com. That’s up from 2.45 percent in early July.

By contrast, investors in bond funds saw painful losses.

Long-term government bond funds lost an average 12.71 percent between June 13 and Aug. 13. Intermediate term bond funds lost an average of 4.45 percent, according to Morningstar Inc., a Chicago-based financial services and tracking company.

Experts say the trend in rates is likely to continue to be higher.

“Just because we’ve had this big spike in rates doesn’t mean the rate trend is over,” said Steve Norwitz, a spokesman for T. Rowe Price, a mutual fund company based in Baltimore.

Tips to weather economy

So savers and bond investors must continue to be defensive in their fixed-income strategy.

“You want to have a diversified income-producing portfolio,” said David Sowerby, portfolio manager for Loomis Sayles & Co. in Bloomfield Hills.

Sowerby’s suggestions: Include corporate bonds, real estate investment trusts and high-yield, dividend-paying stocks in the mix.

Diversify your CDs, too. Make sure some CDs mature at different times.

Another option: Put some money into high-yield money market accounts through major corporations. Look at products like GMAC DemandNotes. The minimum initial investment is $1,000. The yield was 2.75 percent for GMAC notes as of Aug. 18. You do not have to be a GM employee to save with this plan. See www.demandnotes.com. Or call (800) 548-7923.