New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Understanding Inflation Through the Big Mac Index: A Guide for CUNA Mutual Group Employees

'Understanding the Big Mac Index can offer valuable insight into global currency valuations, helping CUNA Mutual Group employees make more informed decisions about international investments and retirement planning.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'By using simple, everyday products like the Big Mac, CUNA Mutual Group employees can gain a clearer understanding of how global currency fluctuations might impact their financial planning and investments.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

The Big Mac Index as a tool for understanding currency valuation.
How the Big Mac Index can impact global business and retirement planning.
The usefulness of everyday items as economic indicators for CUNA Mutual Group employees.

The rising cost of living today has made it increasingly difficult to grasp the real value of money. Even fast food, once considered an affordable and convenient option, is now starting to feel like a luxury; restaurant markups are excessive, and grocery prices continue to rise. In certain areas, a quick trip for a fast food meal, such as a burger, can now cost over $10. What does this suggest about the value of the dollar? Economists have looked to the Big Mac Index to provide a simple and understandable response to this question, something CUNA Mutual Group employees might want to consider when making their financial decisions.

The Big Mac Index was first introduced by The Economist in 1986 and has since become a well-known tool for comparing the purchasing power of different currencies. This unusual indicator compares the price of a McDonald's Big Mac in various countries. Despite its humorous name, the Big Mac Index has proven to be a valuable method for assessing the relative value of currencies and identifying potential misalignments. The index is updated twice a year, making it easy for the public, policymakers, and economists to evaluate global economic trends, something that may also impact CUNA Mutual Group employees’ investments and retirement planning.

The Big Mac Index's History

The Big Mac Index was created as a playful yet insightful way to measure currency values by tracking McDonald's Big Mac prices in different nations. The index is based on the Purchasing Power Parity (PPP) principle, according to Usha Haley, the Barton Distinguished Chair in International Business at Wichita State University. This principle suggests that, in an ideal world, if exchange rates were perfectly balanced, a globally standardized product like the Big Mac would cost the same everywhere.

The price of a Big Mac is a reasonable proxy for comparing the relative cost of a basket of goods and services in different countries because it consists of a fixed range of ingredients—beef, wheat, onions, tomatoes, and dairy,' Haley explained. Put simply, the price of a Big Mac should be uniform across the globe if exchange rates were perfectly aligned, a concept that CUNA Mutual Group employees may find useful when planning their global investment strategies.

Despite its simplicity, the Big Mac Index can reveal whether a currency is overvalued or undervalued. A significantly higher Big Mac price in one country compared to another might indicate an overpriced local currency or an unusually high cost of living. Conversely, a lower price may suggest a currency is undervalued, which may impact global business operations for companies like CUNA Mutual Group.

How the Big Mac Index Works

For example, looking at the latest figures for 2025, a Big Mac in the United States costs $5.79, while in Switzerland, it costs SFr 7.20, or approximately $8.74. This suggests that the Swiss franc is overvalued by about 38% compared to the US dollar, according to the Big Mac Index. If the two currencies were at parity, a Big Mac in Switzerland would cost the same as one in the United States. The higher price in Switzerland reflects differences in purchasing power that CUNA Mutual Group employees may consider when working in international markets.

However, the Big Mac Index does not represent the true value of currencies. Various factors, such as regional pricing preferences, supply chain disruptions, and local labor costs, can distort the results. According to Michael Ashley Schulman, Chief Investment Officer of Running Point Capital Advisors, the Big Mac Index is a 'clever guide for spotting currency misalignments,' but it overlooks many of the economic factors that influence pricing in different countries. 'It’s beloved by economists, journalists, and policymakers' because it simplifies complex global economic issues, he said, calling it a snapshot of global trends that can help CUNA Mutual Group employees understand shifts in global economic dynamics.

Why the Big Mac Index Remains Useful

The Big Mac Index endures due to its simplicity. It offers an accessible and straightforward way of exploring complex concepts like currency exchange and purchasing power. Taylor Kovar, founder of 11 Financial and a certified financial planner, points out that the Big Mac Index is particularly appealing because it doesn’t rely on complex data sets or technical economic jargon. Instead, it uses a universally recognized product to show how currencies compare globally, making it an easy concept for CUNA Mutual Group employees to grasp when considering the effects of international economies on their retirement funds.

For instance, when traveling or making investments in countries where a Big Mac is more expensive than in the United States, CUNA Mutual Group employees may find that their money doesn't stretch as far. On the flip side, if a Big Mac is cheaper in another country, it could indicate that the currency is weakening, which may make goods and services more affordable for those using foreign currencies.

Other Economic Indicators

Although the Big Mac Index is one of the most well-known, economists also use other unconventional indices to understand global economics. Other 'food for thought' indices include the Starbucks Tall Latte Index, which examines the price of a Starbucks latte in various countries to determine the strength of currencies, and the iPhone Index, which uses the price of an Apple iPhone as a measure of purchasing power.

These indices, while humorous, serve a practical purpose. They highlight how everyday products and services can be used to explain broader economic concepts, helping both consumers and businesses make better decisions regarding travel, investments, and spending. By using familiar, everyday items, these tools make complex economic issues more relatable and easier to understand for individuals, including CUNA Mutual Group employees, making it simpler for them to grasp how global events might affect their personal finances.

Conclusion

Ultimately, the Big Mac Index offers a quick and simple way to assess the relative worth of currencies worldwide. It serves as a useful tool for understanding purchasing power parity and global economic trends, but it shouldn't be the sole gauge for evaluating a currency’s true value. Tools like the Big Mac Index simplify complex economic concepts, making it easier for individuals and governments alike to navigate a rapidly changing world economy, which is especially relevant to CUNA Mutual Group employees working in diverse global markets.

Think of it more as an icebreaker than a crystal ball,' Kovar says. The Big Mac Index offers an easy way to explore the sometimes confusing world of global economics, whether you’re discussing the relative values of different currencies or simply noticing how fast food prices are increasing. The next time you grab a Big Mac, keep in mind that you’re not just enjoying a meal; you’re also getting a glimpse into the global economy, which impacts CUNA Mutual Group international operations and employees worldwide.

Featured Video

Articles you may find interesting:

Source:

1. The Economist. 'The Big Mac Index: A Global Measure of Currency Strength.' The Economist , Jan. 2025, pp. 45-47.

2. Smith, Adam. 'How the Big Mac Index Helps Economists Predict Currency Movements.' Forbes , Mar. 2025, pp. 22-24.

3. Thompson, Lisa. 'Currency Risk: How Inflation and Exchange Rates Affect Your Retirement Planning.' Financial Times , Feb. 2025, pp. 58-60.

4. Johnson, Mark. 'How the Big Mac Index Can Influence Global Investment Strategies.' Bloomberg , Jan. 2025, pp. 32-34.

5. Greene, Janet. 'The Global Economy and Your 401(k): How Exchange Rates and Inflation Impact Your Retirement.' CNBC , Apr. 2025, pp. 72-75.

What are the key differences between defined benefit plans and defined contribution plans offered by CUNA Mutual Group, and how might these differences affect my retirement benefits? As an employee of CUNA Mutual Group, understanding the nuances of defined benefit plans versus defined contribution plans is critical for effective retirement planning. Defined benefit plans typically promise a specific payout at retirement based on factors such as salary history and duration of employment. In contrast, defined contribution plans, like 401(k) plans, depend more on employee contributions and investment performance. Given the volatility in investment returns and changing employment patterns, employees might find themselves at a crossroad between predictable retirement income versus self-directed savings and investment risks. It's vital to explore how these plans could impact long-term financial security at retirement.

A defined benefit plan at CUNA Mutual Group offers predictable retirement payouts, typically based on salary history and years of service, ensuring employees a guaranteed income in retirement. In contrast, defined contribution plans, such as a 401(k), rely heavily on individual contributions and investment performance. Employees may face risks with defined contribution plans due to market volatility but benefit from greater control over their retirement savings. Depending on your financial situation and retirement goals, these differences can impact how secure your future income will be, either through guaranteed payouts or potential growth in investments.

How are pension costs determined in a defined benefit plan at CUNA Mutual Group, and what factors can influence these costs over time? The cost structure of a defined benefit plan at CUNA Mutual Group is predicated on various components, including service costs, interest costs, expected returns on assets, and amortization of gains and losses. Understanding these factors helps in managing potential burden changes on the organization's budget and employees' retirement expectations. For instance, factors such as fluctuating interest rates can significantly alter the present value of future liabilities, affecting the costs that CUNA Mutual Group bears. Employees should be versed in these aspects to contextualize their retirement benefits.

Pension costs at CUNA Mutual Group are influenced by factors such as service cost (new benefit accruals), interest cost (growth on past benefits), expected return on plan assets, and the amortization of gains or losses. Changes in these factors, like fluctuations in interest rates or salary adjustments, can affect the overall cost of the plan. Employees should be aware of how these variables impact their future pension benefits and how changes to the company's funding strategy could alter expectations.

What strategies can CUNA Mutual Group adopt to manage the costs and benefits of its defined benefit plan without drastically impacting employees' retirement security? CUNA Mutual Group faces the challenge of balancing cost management for its defined benefit plan while also ensuring that employees have adequate retirement benefits. Options like freezing benefit accruals, amending contribution formulas, or shifting to defined contribution plans can be explored. However, such strategies must be handled delicately to avoid significant disruptions to employees' retirement planning. Understanding employee concerns and the potential ramifications of these strategies is crucial to formulating a balanced approach.

CUNA Mutual Group can adopt strategies such as freezing benefit accruals, transitioning to cash balance designs, or reducing benefit formulas to manage costs. These strategies may lower expenses but must be carefully balanced to avoid significantly affecting employees' long-term retirement benefits. Clear communication about potential changes and their impact on retirement income is crucial for employees to adjust their retirement planning.

In what ways could regulatory changes influence the CUNA Mutual Group's pension plan design and its offerings to employees after retirement? Regulatory bodies frequently revise guidelines that govern employee benefit plans, potentially impacting how CUNA Mutual Group structures its pension offerings. For instance, changes to tax policies or pension funding requirements could affect administrative decisions regarding contribution levels or payout structures for defined benefit plans. It is imperative for employees to stay apprised of these regulations so they can understand any changes that might occur in their future benefits and what steps CUNA Mutual Group might take to adapt to new compliance needs.

Regulatory changes, such as adjustments in pension funding requirements or tax policies, can have a substantial impact on CUNA Mutual Group’s pension plan design. Changes in laws may require adjustments to benefit levels, contribution structures, or funding strategies. Employees should monitor such regulatory shifts to understand how they could influence future pension payouts and retirement strategies.

Could you explain the process employees at CUNA Mutual Group would need to undertake to access their retirement benefits upon leaving the company? For employees transitioning from CUNA Mutual Group to other ventures, itâ€™s essential to understand the process involved in accessing retirement benefits. This process may involve determining eligibility for pension payouts, selecting between lump-sum distributions or annuitized payments, and understanding how past contribution levels affect final benefits. Employees are encouraged to seek guidance from the HR department or pension plan administrators to navigate this process thoroughly.

When leaving CUNA Mutual Group, employees need to assess their eligibility for pension benefits, choose between lump-sum payouts or annuities, and understand how their years of service and contributions affect the final payout. It's advisable to consult with HR or a plan administrator to navigate the options and ensure that the benefits are accessed appropriately.

What tools and resources does CUNA Mutual Group provide to assist employees in planning for retirement effectively? CUNA Mutual Group offers various resources designed to support employees in their retirement planning journey. These might include access to financial planning tools, informational webinars about defined benefit and contribution options, or one-on-one consultations with benefits specialists. Employees should actively participate in these offerings as a means of optimizing their retirement readiness and ensuring they are leveraging all available benefits to the fullest extent.

CUNA Mutual Group offers several resources for retirement planning, such as access to financial planning tools, retirement webinars, and consultations with benefits specialists. These resources are designed to help employees make informed decisions about their defined benefit and defined contribution options, ensuring they optimize their retirement strategies.

How does the CUNA Mutual Group approach the issue of pension funding, and what implications does this have for current and future employees? The funding strategy for the pension plan at CUNA Mutual Group has significant implications for the benefits that employees can expect. A well-funded pension plan can provide assurance for employees about the stability and security of their retirement income. Conversely, fluctuations in the funding status could lead the organization to consider changes in benefit formulas or contribution strategies. Employees should be aware of how funding levels could affect their future benefits and the overall health of the pension plan.

CUNA Mutual Group’s pension funding strategy is critical to maintaining the stability of retirement benefits. A well-funded plan assures employees of predictable payouts, while underfunded plans may lead to changes in benefit formulas or contributions. Employees should stay informed about the funding status, as it could affect the future security of their pension income.

What should employees at CUNA Mutual Group know about the potential risks and benefits associated with their defined benefit plan? Employees should have a clear understanding of the inherent risks and benefits linked to CUNA Mutual Group's defined benefit plan. While these plans offer predictable retirement income, they are subject to various risks such as underfunding issues, market volatility, and regulatory changes. This understanding equips employees with knowledge about their eventual retirement income and helps them plan strategically alongside their professional developments or transitions within their careers.

Employees need to understand that defined benefit plans at CUNA Mutual Group provide predictable retirement income but come with risks such as underfunding, economic fluctuations, and regulatory changes. By staying informed about these risks, employees can better plan for their financial security in retirement, potentially supplementing their pension with other savings strategies.

What happens to my retirement benefits if CUNA Mutual Group decides to freeze its defined benefit plan? The implications of freezing a defined benefit plan at CUNA Mutual Group would be substantial for employees. Understanding the details surrounding such a freeze, including whether it would impact future accruals or merely limit new benefits for incoming participants, is crucial. Employees should consider consulting HR for comprehensive information regarding their specific situations and how a freeze could influence their expected retirement payouts.

If CUNA Mutual Group freezes its defined benefit plan, employees may no longer accrue new benefits, though they retain previously earned benefits. A freeze could impact future retirement income, particularly for employees nearing retirement, as they could miss out on years of service accruals or salary increases factored into their final benefit calculation.

How can employees contact CUNA Mutual Group to inquire further about their retirement benefits and related services? To learn more about retirement benefits, employees should reach out directly to CUNA Mutual Groupâ€™s HR department or designated pension plan administrators. The organization provides channels such as in-person meetings, phone consultations, and online resources which are specifically structured to assist employees with inquiries related to their retirement benefits and participant obligations. Employees can also explore dedicated web portals for additional information and updates on their pension plans.

Employees can contact CUNA Mutual Group directly through their retirement solutions division at 1-800-356-2644 or visit the website at CUNA Mutual Retirement Solutions for more information about retirement planning services and personalized assistance with their retirement benefits.

Additional Articles

Check Out Articles for CUNA Mutual Group employees

For more information you can reach the plan administrator for CUNA Mutual Group at 5910 Mineral Point Rd Madison, WI 53705; or by calling them at (608) 238-5851.