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 attached our 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 current 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:

  1. 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 July 1st as your Benefit Commencement Date. For April, we anticipate rates to significantly rise.
  2. What Does this Mean for You? With the current interest rates continuing to remain at elevated levels, BP Employees looking to retire in 2024 will likely want to wait to collect their pension until the second half of 2024, or later when rates are more likely to drop. Waiting to collect your pension does not impact when you are expecting to retire from BP. We strongly encourage you to speak with one of our experienced financial advisors to discuss the impact these rates 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.
  3. Why Are Rates Changing? Stubbornly high inflation levels, escalating geopolitical conflicts in Israel and Ukraine along with a stock market that is currently experiencing a downturn, have created a perfect environment for interest rates to rise in recent weeks.
    While interest rates are still widely expected to decrease once the Federal Reserve begins lowering its target interest rate level, the timeline of when this happens has been shifting.  The current market consensus is that the Fed will begin lowering rates in September and gradually continue to lower interest rates periodically throughout the remainder of 2024 and in to 2025.
  4. What’s Next? In recent public appearances, Federal Reserve Chair Jerome Powell, has said the Fed still anticipates cutting short-term rates later this year, but he has made a significant shift in his guidance on exactly when that could begin.  In his previous public statements, Powell has suggested that rate decreases could be coming sooner rather than later, however now that inflation has been increasing over the past three months, it appears he is rethinking his timeline, causing markets to react negatively.

 

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.

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