Interest rates for January, affecting retirees collecting their BP RAP (Retirement Accumulation Plan) benefits on May 1st, 2023, moved almost exactly in line with our estimates. As predicted, we expected Corporate Segment Rates to continue their decline due to the Federal Reserve Bank reducing the size of rate increases. As we noted in last month’s email, this could be a welcome relief for your BP RAP, which has seen rapid interest rate increases over the past year. Next month’s rates, however, are forecasted to rise noticeably, please see our interest rate chart for more details.
January’s inflation report showed another decline in inflation however it did not drop as much as the market expected, implying the Fed may need to keep pushing interest rates higher and keep them elevated for longer versus what the market was previously expecting. This caused equity markets to react negatively and is largely the reason for the recent market pullback, which is currently still underway.
Financial markets are currently searching for signs of stability. However as long as jobs data and consumer spending keep coming in stronger than expected, the Fed will need to continue to push rates even higher, which historically has been negative for stock prices. In summary, market volatility both up and down should be expected to continue over the coming months.
If you are considering retiring this year or next, we cannot stress enough the importance of getting professional advice during this highly volatile time. Financial markets may continue their downward trend well into 2023. Choosing the wrong month to collect your retiree benefits could cost you tens of thousands of dollars. Our team at Capstone Wealth Advisors specializes in knowing the inner workings of your BP Retirement Plans and how to help you make the decision that best suits your individual situation.
If you would like to learn more about how your pension is affected by interest rates or if you are concerned at the overall situation of financial markets today and would like advice about how we believe you should navigate it, please do not hesitate to contact one of our experienced financial advisors who specialize in knowing the inner working of your BP RAP plan. This service is free of charge for all BP Employees and Retirees.
To schedule a complimentary consultation with our team email firstname.lastname@example.org or call us directly at (877)739-6007.
Capstone Wealth Advisors
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