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When it comes to managing your retirement, a small mistake can cause a major loss of capital. That is why it's important to speak with a financial advisor who is familiar with your Company's benefits. Schedule a call today..  
 
 
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ExxonMobil Q4 Lump-Sum Payments Likely to Fall, Based on Rising Rates

Jun 23, 2022 11:50:45 AM
written by The Retirement Group

Interest rates are trending upward, and if this trend continues ExxonMobil lump-sum payments will drop again in the fourth quarter of this year. The IRS has recently released the Segment rates for the month of May, recorded at: 3.23% / 4.59% / 4.69%. May's segment rates saw an increase of about 0.3% (in the second segment), which is a substantial jump for a single month.  This ongoing trend upward looks to be an early indicator of bad news for ExxonMobil employees opting for a lump-sum in the future.


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posted in Financial Planning, Lump Sum, Pension, Retirement Planning, ExxonMobil, Inflation

Q4 ConocoPhillips Lump Sum Payments Likely to Fall, With Interest Rates Continuing to Rise

Jun 23, 2022 11:46:12 AM
written by The Retirement Group

ConocoPhillips employees considering the lump sum option on their pension payment may have an opportunity to take advantage of lower interest rates in Q3 2022. With Q4 projecting to have higher rates, retiring during Q3 may be the last opportunity to avoid a reduced lump-sum. May's segment rates were just released and they are 3.23%/4.59%/4.69%. These rates increased by about 0.3% (in the second segment) since April, which is a very large increase for a single month. 

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posted in Pension, Interest rates, ConocoPhillips, Inflation

KP Lump Sum Payments Falling, With Interest Rates Continuing to Rise

Jun 23, 2022 10:55:42 AM
written by The Retirement Group

Many KP employees who are waiting to commence their pension lump-sums, are now seeing a significant decrease in their value. New segment rates have been released and there was a 0.3% increase in the second segment over the previous month. The second segment is the most impactful so if you have a pension of $1,000,000 you could see a reduction of about $30,000 simply by commencing your benefit in July as opposed to June. This is because when KP employees elect the month they would like to begin their pension, KP looks back two months to calculate the rates for the pension disbursement. When these interest rates move up or down, your lump sum amount will move in an inverse direction, so if interest rates increase, your lump sum amount will decrease and vice versa. Through the pandemic, interest rates dropped dramatically which greatly increased many lump sum payments. This trend culminated in record lows for individuals who commenced their benefits in December of 2020. However, since then this trend has shifted, as interest rates have been increasing rapidly, causing a large reduction in pension lump-sum values.


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posted in Pension, Interest rates, Inflation, KP

Chevron Lump Sums Experiencing Serious Drops, as Interest Rates Continue to Soar

Jun 22, 2022 2:04:36 PM
written by The Retirement Group

Many Chevron employees who are waiting to commence their pension lump-sums, will now see a significant decrease in their value. With short, medium, and long-term rates rising significantly over the last month, the higher average rates will result in lower lump-sums for those retiring in August of 2022. This is because when Chevron employees elect the month they would like to begin their pension, Chevron looks back at the third, fourth, and fifth months' rates to calculate the pension disbursement. When these interest rates move up or down, your lump sum amount will move in an inverse direction, so if interest rates increase, your lump sum amount will decrease and vice versa.

Through the pandemic, interest rates dropped dramatically which greatly increased many lump sum payments. This trend culminated in record lows for individuals who commenced their benefits in December of 2020. However, since then this trend has shifted, as interest rates have been increasing quickly, there has been a large reduction in pension lump-sum values.


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posted in Pension, Interest rates, Chevron, Inflation

3 Reasons Why Interest Rates Are On The Rise

Jun 3, 2022 2:45:00 PM
written by The Retirement Group

Interest rates are a key driver of most financial assets. While most often referenced in relation to the bond market, rates are also a key input in traditional equity valuation models, which incorporate market interest rates to determine the appropriate rate to discount future cash flows. Interest rates are an essential element in bond pricing and the yield that investors require to own a particular fixed income security. Since hitting an all-time low in 2020, interest rates increased in 2021 and have continued that climb higher thus far in 2022. This has put pressure on fixed income and certain areas of the equity market, which has led to stress in certain areas of the stock market, such as growth stocks, which can be sensitive to interest rate shocks. With that in mind, let’s examine why rates have been moving up, and whether this should be a cause for concern.


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posted in Interest rates, Inflation, Economy

Don't Panic: A Bull Case for Equities

Jun 3, 2022 8:46:00 AM
written by The Retirement Group

DON’T PANIC

Both stocks and bonds are off to one of their worst starts to the year in history. The S&P 500 Index declined -12.92% through the end of April 2022, and other broad market indices were similarly down double digits.1

What’s worse, investors, like those living in Texas or New York, are losing nearly as much on the fixed income side of their portfolios as they are on the equity side. The Bloomberg U.S. Aggregate bond index, a broad measure of domestic fixed income, suffered its largest quarterly loss (-5.93%) since 1980 to start the year2 and is down -9.50% through the end of April. The current environment has left investors feeling like there is nowhere to hide, and even prompted some to exit markets or go to cash.

Such a rash response could lead investors to miss out on an eventual rebound in since historical equity performance post-corrections, as well as strong underlying economic fundamentals, suggest a bounce back in stocks will occur sooner rather than later. If you are unsure about your specific situation, feel free to speak to one of our retirement-focused advisors today!


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posted in Stock Market, Market Volatility, Inflation, Economy

Eggs in One Basket

Jun 2, 2022 11:15:00 AM
written by The Retirement Group

“Don’t put all your eggs in one basket”.

You’ve likely been seeing headlines about the recent volatility in the market. While historically this is nothing new, it can be difficult to watch your account values fluctuate.

As investors, we find that maintaining a long-term perspective helps keep us grounded. We know that the market goes up more often than it goes down and that short-term fluctuations in price indicate a healthy market of buyers and sellers.


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posted in Risk, Inflation, Economy

A Note On Inflation

Jun 1, 2022 4:18:00 PM
written by The Retirement Group

As the economy continues to recover from the effects of the pandemic over the past year, you may have noticed the term ‘inflation’ coming up in the news. But don’t let it scare you! The fact is, some inflation is good because it means the economy is bouncing back.

“Bouncing back” is exactly what it sounds like; stock and bond prices may show some volatility in the short term, as the market and the economy adjust to find a new equilibrium. That’s why, like always, it’s best to stay focused on your long-term financial goals rather than worry over any short-term noise.


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posted in Interest rates, Inflation, Economy

A Note On The Yield Curve

May 31, 2022 12:43:00 PM
written by The Retirement Group

Recently, you may have seen some headlines talking about an "inverted yield curve" and what it may mean for the economy. An inverted yield curve is just one indicator of the economy's possible direction, so let's put these headlines into context.

First, what is the yield curve, and what does it show? The yield curve is a graphical representation of interest rates (yields) paid out by US Treasury bonds. A normal yield curve shows increasingly higher yields for longer-dated bonds, creating an upward swing. An inverted curve has a downward slope, indicating that shorter-dated bonds yield more than longer-dated bonds, which isn't typical.


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posted in Inflation, Economy, Yield Curve

Take Emotion Out of the Market

May 31, 2022 9:00:00 AM
written by The Retirement Group

The stock market isn’t known for its emotional stability. When the markets react emotionally, it’s imperative to think rationally. Although no one can predict the future, panicked selling during a downturn is often the worst thing you can do.

Prevention is the best medicine for our health – washing our hands, not touching our face in public, getting enough rest, eating healthy and avoiding contact with individuals who are ill or have been exposed to someone ill. Similarly, planning for potential volatility before you experience it is vital.


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posted in Emotions, Inflation, Economy

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