How the Fed Hike Affects Your Retirement

Here in 2022, we’ve seen the Fed raise rates several times now. And so I want to talk to you specifically about what that rate hike, how it impacts your retirement. So we’ve been continuously seeing this interest rate hike in the goal of combating inflation. But this has posed many problems within the stock market and especially here in the bond market as well for this year. Meanwhile, inflation as I’m sure as you’re feeling just as much as it’s impacted you when you go to the grocery store or the gas pump and a whole lot of other areas that people are really feeling the pain with the inflation. So what is it that ultimately you should do? So first thing, maybe check your spending habits. When you go through and we talk about a budget and a lot of times people aren’t really comfortable with having a budget and following it. But it’s one that can be very vital. But maybe it’s going back through and looking at where you’re spending money. Are there certain unnecessary expenses? A good exercise might be going through your most recent two, three, four, five different past credit card monthly bills and seeing where you’re spending that money and see if there’s certain areas when you look at that, that definitely stand out to you as well, maybe we didn’t necessarily need that “x, y, z,” whatever that might be. So the second area, maybe revisit your investments and savings. Do you necessarily have an income plan where you’re regularly taking income from your investments? Look at that. Is it something that you have a plan for and it’s consistent? What about your risk tolerance? Have you experienced greater volatility within your stocks and bonds then you feel comfortable with? Well that might be a time for you to revisit that or talk to your Financial Advisor to talk about are there different accounts available that you feel more comfortable with. Number three might be looking at paying off debts during a time like this. As interest rates are rising, you might be experiencing if you have a variable rate on your credit cards or on your mortgage, then you’re going to see those rates increase. So how can you either look at paying those bills off or potentially refinancing those to get into a better position. The good news with the rising interest rates though, is savings accounts should be earning more. So you may want to be shopping around to try and get a little better interest on your savings. Number four, are there other income options? Should you begin a pension or potentially an annuity income stream? Maybe it’s working part-time. This other income may allow you to generate that additional income and not have to touch some of those investments that maybe you haven’t seen as good of results as you’d like to during this time. So if you’re ultimately, we feel like if you’re failing to plan, it’s planning to fail. So let us help you plan to retire well.