Low interest rates have been the bane of retirees and other fixed-income investors for several years now. Experts have been predicting that rates will go up, but rates stay stubbornly low, or decline even further. Many retirees face interest rate sticker shock when they go to the bank and find they get virtually zero interest on their savings accounts or CDs, as I did last week, when I got 0.15 percent on a $5,000 CD.

Low interest rates are a gift to 20-somethings who want to buy a house — if only 20-somethings wanted to buy a house — but they make life poorer for those of us who are retired. Low interest rates don’t just affect people who want to keep their retirement savings in a safe, secure and federally insured bank account. They mean less income for retirees who buy an annuity, sign up for a reverse mortgage or invest in bonds or bond mutual funds.

But if you think it’s bad here in the United States, where the 10-year Treasury bond is yielding around 2.4 percent, it’s even worse in Europe. The yield on the German bond recently fell below 1 percent, and even economically challenged Spain pays a scant 2.1 percent interest on its 10-year bonds.

Low interest rates can be frustrating for those of us who need retirement income. But here are four things to keep in mind before you do something you might regret:

1. There is real risk in the bond market. Bond prices move in the opposite direction of interest rates. This has been good for bond investors in recent years, but is likely to go the other way at some point in the future. Some bond experts even suggest that the current bubble in bonds is reminiscent of the real estate bubble of the mid-2000s — a market that was overvalued for several years before it finally burst.

2. Do not design your investment plan looking in the rearview mirror. Many investors stick with a 40 to 60 percent allocation to government or investment grade corporate bonds, just because that is what worked in the past. Today, you might want to diversify the bond portion of your portfolio by using other assets that have an equal or higher yield and also have the potential to appreciate. Some examples are real estate investment trusts (average yield 3.25 percent), oil and gas pipelines (average yield 6 percent) and covered call strategies (average yield 6 percent). These assets can be purchased through exchange-traded funds, which trade just like stocks. However, some of these investments might present complicated tax issues and different risk profiles, so it’s best to consult a financial advisor before jumping into these more sophisticated issues.

You can also think globally with your bonds, not to Germany or Spain, but to emerging markets which offer average yields of over 4 percent. Are these markets more risky? Perhaps. But many of these countries run budget surpluses, rather than deficits like the U.S., which suggests that they will gain economic strength as time goes on.

3. You may not be able to live off the interest from your investments. Many people aim to pay for retirement with the yield from their investments, and some fortunate people may manage to live off the interest without touching the principle. But this strategy is becoming increasingly difficult to implement in this low interest rate environment. Plus, recent research published in the “Journal of Financial Planning” suggests that a retiree’s income portfolio should instead be designed with a total return objective, even if you need to dip into principle in some years. This means you will need to sell some investments and rebalance periodically. There will be years when your portfolio will decline in value and you will need to spend down your principle. However, there will also be years when your returns are higher, and you will add to your principle. Sometimes this strategy may make you feel uncomfortable, but it’s more tax efficient than living off the interest and gives you a higher probability of not outliving your money.

4. Your short-term emergency fund money still belongs in the bank . Regardless of any other decisions about your investments, and despite the current ultra-low interest rates, you still need to keep an emergency fund in the bank. You don’t want to incur any risk with the money you need to live on over the next few years. But long-term money should find a better place.

Tom Sightings blogs at Sightings at 60 .

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4 Strategies for Coping with Low Interest Rates originally appeared on usnews.com