The Federal Reserve raised their benchmark interest rate another 75 basis points at their most recent meeting on September 21st, 2022. This was the sixth-rate hike of the year and the third consecutive 75-point hike. The Fed’s current benchmark range of 3% to 3.25% is the highest that rates have been since the Great Recession in early 2008, and analysts expect that rates will go higher before the end of the year, potentially peaking at 4.25% in March of 2023. While the purpose of these rate hikes is aimed at reducing inflation, Federal Reserve Chairman Jerome Powell warned in August that the aggressive actions taken by the Fed would “bring some pain” for business and consumers. This sentiment was mirrored on Wall Street as recent losses on the stock market are indicating that investors could be in for a much larger economic downturn.
If you are currently retired or are planning to retire in the next few years, a protracted economic slowdown will have a major effect on your standard of living during your golden years — how much more can you afford to lose in this current market crash? At Crash Proof Retirement®, we educate Americans in or near retirement every day about the best ways to protect their investments from rising inflation, stock market volatility, and costly taxes and fees. Here is our team’s analysis of the latest news from the Federal Reserve and what it could mean for the economy and your retirement if your assets remain at risk on Wall Street.
How Do Higher Interest Rates Affect Your Retirement?
The federal benchmark interest rate has a direct effect on the cost of borrowing money for businesses, consumers, and the federal government. In the past, raising rates has led to a decrease in economic activity, predating several recessions. With fewer people able to make large purchases – like houses and automobiles – many of the foundational industries that make up our economy are put at a disadvantage. Businesses also face increased difficulty with borrowing money that they need to run their day-to-day operations when interest rates consistently rise, as they have this year. Reduced spending and borrowing leads to huge declines on the stock market. Americans who have put their retirement funds into securities-based investments like stocks, bonds, and mutual funds, are at risk of losing their hard-earned nest egg.
Protecting Your Retirement Future
If you are concerned that the Federal Reserve’s rate-hike frenzy will impact your hard-earned savings — leaving you with nothing in retirement— the best thing to do right now is to educate yourself about safe alternative investments, outside of the securities industry, that are guaranteed to prevent you from losing your principal during a stock market crash. The proprietary Crash Proof Retirement® System is a careful selection of financial vehicles that are based in the financial life insurance industry. These exclusive Crash Proof Retirement® vehicles not only protect investors from losing any of their principal, but they also credit interest at rates similar to securities-based investments, without any downside risk. If you would like to find out more about how these Crash Proof Vehicles can fit into your retirement plan, the team at Crash Proof Retirement® would be happy to educate you about these and other strategies that will protect your nest egg.
Interest rates are higher than they have been in over a decade, but you can take control of your nest egg from the dangers of market volatility and secure your retirement funds. Contact Crash Proof Retirement® today, and schedule an appointment to speak with a licensed retirement phase expert by calling 1-800-722-9728 or by filling out the online form on our contact page for advice about financial planning in Bucks County, PA or anywhere else nearby, at no cost or obligation to you.