Economic factors for fiscally conservative retirees — those seeking less risk and more predictable outcomes — have never been more favorable. The current financial climate is turning the retirement industry upside down. However, many retirees have not changed their strategy to match the change in rates and remain unaware of the unique opportunities this economic bubble presents. Our clients often share stories about their first mortgage, with tales of paying 12%, 14% or even 16% interest. However, few were able to take advantage of the high fixed income rates of those times, because we were young and broke! We were borrowing money, rather than earning interest through CDs, fixed annuities or other fixed-income financial instruments. But today, successful retirees have paid off their mortgages, or refinanced at a low rate, and have considerable assets that should be working for you! And while you’ve had to endure near-zero rates for over a decade, the landscape has changed dramatically. Short-term interest rates surged from nearly zero to over 5% this year, giving retirees with assets a sunny-side-up scenario. The rapid increase in rates resulted from a perfect storm of political unrest, a global pandemic, and a government printing press working overtime for over three years. The national debt has doubled in the past five years, reaching nearly $35 trillion. But if you’ve saved diligently over the decades, this environment can work in your favor. Today, retirees with saved assets can enjoy substantial fixed income performance, guaranteed. This is a rare opportunity, and while diversification remains wise, having a portion of your retirement funds in fixed income instruments can be a wise move. The current favorable rates may not last, and the Federal Reserve could cut rates, slowing down this beneficial period. But if you take advantage of fixed income, you can lock in these high rates for your lifetime. Modern retirement planning, including using fixed rates like CDs and modern annuities, work exceptionally well for today’s retirees. There are many options to enhance financial security and optimize IRA assets, with low-risk vehicles. With modern annuities — not your parents’ antique, inflexible products — and thoughtful planning, retirees can achieve greater income and financial security than we have seen in recent decades. Though the financial world may seem upside down, these times are particularly good for retirees. The current climate may be harder for the younger generations, but retirees have an exceptional chance to secure their financial future. The era of almost 0% interest rates since the Great Recession of 2008 has ended, and we are now seeing incredible rates on savings and impressive guaranteed income payouts for life. Taking a prudent portion of your retirement savings and investing in fixed income can significantly improve your retirement. Using a more substantial allocation combined with your growth portfolio may even lead to an excess of income, potentially resulting in more funds to enjoy your retirement now while you’re feeling great and ready to live your life. Embrace the sunny side of this economic anomaly and leverage these favorable conditions to enhance your retirement security. This period offers a unique opportunity to secure a financially stable and stress-free retirement. If you haven’t changed up your strategy since these rates have changed, it’s time to act!
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Materials offered by Stratton & Company, including articles, booklets, and seminars are designed to provide general information on the subjects covered. They are not intended to provide specific financial, legal or tax advice. Stratton & Company provides insurance and annuities and its representatives do not give investment, legal or tax advice. You are encouraged to consult your tax advisor or attorney or investment advisor. By contacting us, downloading booklets, or attending events, you may be offered a meeting to discuss how our insurance services can meet your retirement needs. Investment advisory services offered by duly registered individuals through CreativeOne Wealth, LLC a Registered Investment Adviser. CreativeOne Wealth, LLC and Stratton & Company are unaffiliated entities.
