Retirees have been wallowing in crummy low interest rates for half a decade now. That is all poised to change as the Fed has indicated the next meeting in December will begin a slow increase in the Fed rate. Retirees generally need to keep money in safe harbors but rates on those types of account have been routinely under 1%. Inflation has spent the last 5 years chewing a hole in the pockets of our retired Americans.
The real estate market has been a huge beneficiary of these record low rates but now the stock market is on a tear and the real estate market seems content so it's time for Feddy to back off the throttle and let rates settle in to market levels.
For retirees it is a good time to consider buying or selling your home or refinancing it if need be while sub 4% rates are still attainable. Any assets in riskier classes should start migrating to safe havens like CDs, bonds and other income bearing investments. Of course any decisions being made in such matters should always be made under the council of a qualified loan officer and/or financial planner.
Buying power is strong right now for anyone thinking about buying a home. As the Fed moves into a less invasive position with rates, we will see a steady quarterly uptick in rates. Where the cost of money will rise, the benefit of saving will improve. Seniors need to be good savers since most are earning less in retirement than they did in the workplace.
Now is the time to consult your trusted professionals to make sure you are in the best position to weather the changes coming down the line.
