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Jason Noble explains how to use our current high interest rate environment to help fund your retirement savings goals in this segment with host Tom Crawford of ABC Lowcountry Live.

Interest rates have risen:

Between March 2020 and January 2022, the average annual inflation rate was 6.34% according to the Bureau of Labor Statistics, which resulted in an 11% increase in prices as measured by the Consumer Price Index (CPI). The CPI rose to 9.1% in June 2022 alone, and food and energy prices soared — Russia’s invasion of Ukraine only exacerbated the problem. The Fed needed to take drastic measures to get the economy back on track…. In just 2 years, [they] hiked interest rates from 11.2% to an astounding 20%, effectively putting a temporary stranglehold on the economy.” TheStreet, Jan 31, 2024

How you can take advantage of high interest rates:

Despite the hikes and the current high interest rates we have in America, things are not all bad—there is an upside to high interest rates. Jason Noble explained to Tom Crawford that if you are saving for retirement, you can choose to invest in more income-producing investments and potentially still have a little more security within your strategy.

This particularly relates to those getting ready to retire in the next few years as well as those already in retirement who need a certain rate of return, and also need investments with less risk. Now you can get bigger yields using short-term instruments. With interest rates higher than they’ve been since 2009, investors don’t have to wait as long as they did in order to get the kind of returns they need with guaranteed investments like CDs or Treasury bonds or other options. And when it comes to bonds, that’s another strategy you can potentially use, because when interest rates get cut again—as they are projected to do—bond yields will go up.

Understanding market risk:

Regarding market risk, you need to understand how much risk is actually in your portfolio, and how much risk you are willing to take on—regardless of your age. (Get your free risk score here.) That’s where working with a qualified financial advisor is really recommended.

If you would like to discuss interest rates, review your portfolio or develop a specific retirement plan, Jason Noble, CFP®, RICP® would welcome the chance to meet with you. Please call our office at 843.743.2926 or schedule a time here.

This article is provided for general information only and is not to be construed as financial or tax advice. It is recommended that you work with your financial advisor, tax professional and/or attorneys when considering investments.

Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd. Suite #150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”).

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