ATTN BP Employees,
Updated interest rates that impact your BP Pension (BP RAP) have been released. For a clear understanding of these changing rates, please find our attached interest rate chart detailing the current interest rates influencing your BP RAP and our predictions for where they may head in the future. The top row contains the official interest rates used to calculate your pension for the months listed. The bottom row contains Capstone Wealth Advisors’ estimate of where we forecast rates going to for the various future dates listed.
What You Need to Know:
Interest Rates used to calculate your BP RAP pension were almost exactly in-line with our forecasted estimates last month. This impacts BP Retirees selecting October 1st as your Benefit Commencement Date. For July’s interest rate forecast, we anticipate rates will move slightly lower, with the 1st Corporate Segment rate falling the most – this means retirees 60-65 years old will see the greatest benefit.
What Does this Mean for You?
BP Employees looking to retire this year should pay close attention to how your pension lump-sum values are impacted by falling interest rates. The Federal Reserve is widely expected to begin lowering its benchmark interest rate on September 18th, 2024. This will mark the first time the Fed has lowered interest rates since 2018 and is expected to continue steadily lowering interest rates into the middle of 2025. Should this end up being the case, BP Retirees may want to consider whether postponing filing to collect your pension is the best option for you. It is important to note that waiting to file for your pension does not impact when you can retire from BP, you can file to collect your pension at any time post separation from BP (even years into the future). We strongly encourage you to speak with one of our experienced financial advisors to help you understand what impact rate decreases could have on your BP RAP and your overall retirement goals. We can help you understand the best option for your long-term retirement planning needs.
Why Are Interest Rates Expected to Fall?
The Federal Reserve has recently signaled that it might start cutting interest rates sooner than previously anticipated. Despite inflation still being a concern, economic growth has slowed down, prompting the Fed to consider rate cuts to stimulate the economy. Recent economic indicators, including slower job growth and weaker consumer spending, suggest that the economy might need additional support. As a result, the Fed is expected to take a more accommodative stance, potentially lowering rates as early as September 2024 and continuing through 2025. This proactive approach aims to counteract any potential economic downturn and support sustained growth.
What’s Next?
Looking ahead, the Federal Reserve is expected to adopt a gradual approach to adjusting interest rates. While the initial rate cuts are anticipated to begin in September 2024, the pace of these reductions will likely be cautious and data-driven. The Fed is closely monitoring economic indicators, including inflation and employment rates, to determine the appropriate timing and magnitude of future rate changes. However, if economic conditions warrant, the Fed may implement more aggressive rate reductions to support economic stability and growth. BP employees should stay informed about these developments as they could impact retirement planning and pension values.
Need Some Guidance?
Don’t worry if this all feels confusing, we’re here to help! Our team of financial advisors is well-versed in all things related to BP retirement plans. Whether it is the BP RAP, ESP, SVP, RRSP, or any other BP-related plans, we have you covered.
Want to learn more? Simply email us at info@capstonewealthadvisors.com or give us a call at (877)739-6007.
Best wishes,
Capstone Wealth Advisors
Bellingham, WA
877-739-6007
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Stock investing involves risk, including loss of principal. International & Emerging Markets investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in Emerging Markets.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
Confidentiality Notice: This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient(s) shall not be deemed to waive any privilege.
Capstone Wealth Advisors and its representatives are separate and apart from any other named entity.
