Retiring Soon? Now is the time to prepare!
If you are retiring now or sometime in the next ten years, today is the time to start planning. The Golden Age of Income and interest is coming to a close soon, and now is the time to lock in great rates for the future. The Fed rate reductions are just part of the reasoning. I hate to say it, but failing to prepare now will most likely cause you to postpone your retirement, accept less income in retirement, and/or make your retirement income plan cost more.
Get into the Retirement Driver’s Seat
Many pre-retirees who come into my office are surprised to find out that they have all the assets they need to retire, they just are not positioned properly. I have been helping people in primarily three ways:
- I help them retire now into the retirement lifestyle they are looking for.
- I put them in a position so they could retire now, but they also chose to continue on with their career.
- We find out when they can retire and what to expect at that time.
We are still in the Golden Age of Income and Interest
This is the Golden Age of income and interest. I’ve been in the financial services business for over 35 years, and I have not seen income rates, interest rates, and personal pension payout rates as high as they are right now. Income and interest contractual guarantees are crazy high. But change is coming in the form of lower interest rates and lower payout rates, as interest rates drop.
What is Changing?
Thanks to COVID and inflation, the Federal Reserve rate and the 10-year Treasury rate have reached all-time highs. At the end of 2024, 10-year Treasury rates were at 4.57%. During 2023, the 10-year rate reached 4.99%. Rates have trickled down since then to around 4% here in the fourth quarter of 2025. We do not know when the party is over, but when it is, interest rates will most likely return to their low normal, probably between 2 and 3 percent.
What does this mean?
If you have retirement savings in an IRA, Roth IRA, 401(k), 403(b), 457, some other retirement plan, or just cash in the bank, if you take action now, you may be able to:
- Retire sooner.
- Retire for less.
- Make your retirement savings work harder using today’s high rates.
So now is the time to look at refinancing those low-interest, low-income rates you are currently enjoying into something more robust that pays better income or interest. It is also the time to lock in your income and interest rates for the long term from:
- Retirement Plans.
- Personal Pension.
- Short-term bank CDs.
- Income and Accumulation Annuities.
- Life Insurance.
- Any other Guaranteed Interest Contract.
The Interest Rate Time Machine
Do you remember a few years ago when banks were paying about a half-percent interest rate? While many people enjoyed low interest on bank CDs and other short-term products, others were earning 5% returns on their ten-year guaranteed interest contracts from insurance companies. There were also people receiving a protected income value from their money, far above that half percent the bank was offering.
Today
Income payout rates for income riders, personal pensions, and income annuities are very generous today. If you want to have income that will last your lifetime, these are the financial instruments you should be looking at. I have been able to help customers increase their income retirement payouts by up to 40% simply by repositioning their assets. And I thought that some of these income plans sold a few years ago were untouchable, and already had the highest possible rates. Not always true.
But it is not for everyone
Repositioning income does not work for everybody. But for some people, it means being able to retire early, or, if retired, having more in retirement. It can be well worth your time to get a second opinion on what you have.
The Bottom Line
If you are retiring now or in the next ten years, now is the time to lock in your retirement lifestyle with some of the best rates available. If nothing else, at least take a look. It might only take a repositioning of your assets to put you in a position to retire today, should you choose.
I have heard it said that failure is not to consider something and say no. Failure is not even considering it. Today is the time to consider whether you can improve on what you already have.
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About Author Steven Drahozal
Steven has been in the financial services profession since 1986. He is a small business owner of the Wealth & Income Management Group, LLC, and runs a life insurance agency. Steve has been a part of the Mature American Planning Company, a Michigan Corporation and insurance agency, since its founding in 1998.
Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a registered investment advisor. BCM, the Wealth & Income Management Group, LLC, and the Mature American Planning Company are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents.
Any comments regarding safe income and secure products, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the issuing company’s claims-paying ability and are not offered by Brookstone.
Index or fixed annuities are not designed for short-term investments and may be subject to caps, restrictions, fees, and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims-paying ability of the issuer. Please refer to the BCM firm brochure, the ADV 2A, Item 4, for additional information.