Without guessing at when it could happen, firms are already preparing advisors for how a rise in interest rates could shift retirees’ investment outlook.
In the past few years, retirement planning has had to contend with historically low interest rates, which put some clients in a difficult position, according to Wesley Long, head of Private Client Services at Wedbush. “A very conservative person traditionally has looked at buying something like a [Certificate of Deposit] that maybe yields four to five percent and they’ve set their retirement income up based on that percentage,” Long said. “Now with interest rates being at historical lows, that same four to five percent is now in the one-and-a-half percent range.”
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