After August’s major drop in interest rates, September’s interest rates stabilized and remained at those levels so far in October; this was anticipated and consistent with our forecast from last month. If rates are able to maintain their current levels, those of you who are Heritage should be fairly happy with the impact. Those of you who are non-Heritage will not see the same impact due to the different nature of your plan’s calculation method but, it shouldn’t negatively affect you to any significant degree. If you need assistance or direction, you can simply reply to this email if you would like to learn more about how each of the pensions are calculated.

In our last email, we discussed the possibility of a “perfect storm” brewing as it related to your pension balances. For those of you looking at retirement in the next few months or early next year, it appears we are seeing a good opportunity on the horizon should these rates hold through December – a reasonable possibility. This is good news and we would encourage those of you looking to retire soon to hang in there for a couple more months if possible so you can get the ACB for next year.

The greatest risks affecting interest rates right now remains with geopolitical conflicts, both political and militarily. This is followed by the Federal Reserve’s movement – or potential non-movement – on interest rates. Currently Wall St. is factoring a 91.4% probability the Federal Reserve will lower interest rates at its next meeting. Our expectation is also that the Fed will lower rates at this next meeting but, then pause through the end of the year to assess the impact of the rate cuts that have already taken place.

If you look at this news from your pension standpoint it’s actually great news especially if you are a Heritage employee and looking to retire later this year or early next year as you should expect to see a large increase to your pension lump sum value resulting from this sharp drop in interest rates.

Juggling the asset allocation of your 401(k) and timing when to take your pension can be a tricky task when markets are choppy. In times like this it is very important that you have someone in your corner who has the experience and knowledge to assist you in dealing with these situations.

If you are considering retiring within the next one to two years, we would highly encourage you to talk with one of our retirement planning specialists who can help you understand what your potential retirement timeline looks like and how to strategically plan your exit. Please feel free to contact me directly at 877-739-6007 or at tyler@capstonewealthadvisors.com. As always, we will assist you free of charge and with no obligation.

Tyler E Ryan

Capstone Wealth Advisors


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