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

What American Family Employees Should Know About the Latest Fed Rate Cut

Healthcare Provider Update: Healthcare Provider for American Family American Family Insurance offers health insurance primarily through its partnership with HealthPartners and other regional health systems, depending on specific plan availability and state regulations. They provide a range of health coverage options, including individual and family plans as part of their broader insurance portfolio. Brief on Potential Healthcare Cost Increases in 2026 As the healthcare landscape evolves, significant rises in Affordable Care Act (ACA) premiums are expected in 2026, with average increases projected at around 20%. This surge is attributed to various factors, including escalating medical costs, the potential expiration of enhanced federal premium subsidies, and aggressive rate hikes from major insurers like UnitedHealthcare, which is requesting increases as high as 66.4% in certain states. Consequently, if these subsidies are not extended, many consumers could experience a staggering 75% increase in their out-of-pocket premiums, pricing out a substantial segment of middle-income families from adequate coverage. As a result, 2025 becomes a crucial year for consumers to proactively strategize to mitigate the financial impacts of skyrocketing healthcare costs. Click here to learn more

'American Family employees should recognize that recent rate shifts underscore the importance of regularly reviewing retirement cash flow plans and adapting to evolving economic conditions, rather than waiting for perfect data to act.' — Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'With the Federal Reserve adjusting rates despite limited economic data, American Family employees should view this as a reminder to stay proactive and flexible in planning long-term retirement income strategies.' — Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How recent Federal Reserve decisions could impact retirement and investment planning.
The effects of interest rate cuts and balance sheet policy changes on borrowing, savings, and markets.
How The Retirement Group can assist with navigating these economic developments.

Important Takeaways

The Federal Reserve lowered the federal funds rate by 25 basis points at its most recent October meeting, even though the federal government shutdown caused delays in releasing key economic data. This development may be particularly relevant for American Family employees who monitor economic trends for retirement and investment planning.

The benchmark federal funds rate was reduced to its lowest level since September 2022, and now ranges between 3.75% and 4.00%. ¹

Along with the rate cut, the Federal Reserve announced it would end its quantitative tightening (QT), or balance sheet reduction process.

These policy shifts may affect savings rates, short-term borrowing costs, and overall market behaviour—factors that could influence retirement decisions for American Family employees.

The Fed’s Decision Despite Limited Data

The Federal Reserve typically relies on government-issued economic data to support policy decisions. However, during the government shutdown, many federal reports—including updates on employment and payroll growth—were paused. A delayed Consumer Price Index (CPI) report showed ~3% inflation in September. But no new unemployment or payroll data was available after early September. ²

Despite limited data, the Fed acted based on viewpoints shared at its September meeting, when many members of the Federal Open Market Committee (FOMC) signalled further rate cuts before year-end, supported by prior trends.

Before the shutdown began, interest rate levels were considered “restrictive”—meaning high enough to slow economic activity—and earlier reports signalled weakening labor market conditions that could be meaningful to American Family employees.

What the Rate Cut Means for Consumers and Investors

While the Federal Reserve controls short-term interest rates, it does not directly set rates for mortgages, bonds, or certificates of deposit (CDs).

Typical short-term effects of a rate cut can include:

- Changes to prime rate-linked borrowing costs, such as adjustable rate mortgages, certain credit cards, and home equity lines of credit.
- Lower returns on short-term fixed income vehicles, like money market funds, short-term Treasuries, and CDs.
- Potential support for financial markets—particularly equities—depending on broader economic conditions, which may be relevant to American Family retirement accounts or company stockholders.

Changes to the Federal Reserve’s Balance Sheet Strategy

During the COVID-19 pandemic, the Federal Reserve used quantitative easing (QE) to aid markets by purchasing large quantities of Treasury and mortgage-backed securities.

In 2022, the Fed shifted to quantitative tightening (QT), reducing its holdings primarily by not reinvesting maturing securities.

At its latest meeting, the Fed announced it would fully end QT rather than simply slow it.

Although these balance sheet adjustments may not be immediately obvious in day-to-day life, they can affect liquidity in the financial system and lending conditions, which may indirectly influence American Family employees.

How The Retirement Group Can Assist

Understanding how interest rate cuts, inflation trends, and Federal Reserve policy affect your retirement savings can be challenging. The Retirement Group can help you review how these economic shifts may relate to pension options, investment income planning, and retirement strategies tailored to your situation. For help, you can reach us at (800) 900-5867.

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Articles you may find interesting:

Sources:

1. nerdwallet. ' Fed Rate Drops for Second Time in 2025 ,' by Cara Smith. 21 Nov. 2025.

2. U.S. Bureau of Labor Statistics. ' Consumer Price Index ,' 24 Oct. 2025.

Other Resources:

1. Board of Governors of the Federal Reserve System. “Federal Reserve Issues FOMC Statement.” FederalReserve.gov, 29 Oct. 2025, https://www.federalreserve.gov/newsevents/pressreleases/monetary20251029a.htm .

2. Schneider, Howard. “Fed Lowers Rates, but Powell Suggests Move May Be the Last of 2025.” Reuters, 29 Oct. 2025, https://www.reuters.com/business/fed-in-fog-it-heads-toward-another-rate-cut-2025-10-29/ .

3. U.S. Bureau of Labor Statistics. “September 2025 CPI Release Rescheduled.” BLS.gov, 10 Oct. 2025, https://www.bls.gov/bls/092025-cpi-reschedule-notice.htm .

4. Ackerman, Andrew. “Consumer Prices in September Rise to a Pace Not Seen Since January.” The Washington Post, 24 Oct. 2025, https://www.washingtonpost.com/business/2025/10/24/delayed-inflation-report-tariffs/ .

5. Foster, Sarah. “6 Ways the Fed’s Interest Rate Decisions Impact Your Money.” Bankrate, 2025, https://www.bankrate.com/banking/federal-reserve/how-federal-reserve-impacts-your-money/

What type of retirement savings plan does American Family offer to its employees?

American Family offers a 401(k) retirement savings plan to its employees.

Does American Family match employee contributions to the 401(k) plan?

Yes, American Family provides a matching contribution to employee contributions made to the 401(k) plan, subject to certain limits.

What is the eligibility requirement for American Family employees to participate in the 401(k) plan?

Employees of American Family are typically eligible to participate in the 401(k) plan after completing a specified period of service.

Can American Family employees choose how to invest their 401(k) contributions?

Yes, American Family employees can choose from a variety of investment options within the 401(k) plan to tailor their investment strategy.

What is the maximum contribution limit for American Family's 401(k) plan?

The maximum contribution limit for American Family's 401(k) plan is determined by IRS regulations, which may change annually.

Does American Family allow for catch-up contributions in the 401(k) plan?

Yes, American Family allows employees aged 50 and older to make catch-up contributions to their 401(k) plan.

How often can American Family employees change their contribution amounts to the 401(k) plan?

American Family employees can typically change their contribution amounts to the 401(k) plan on a quarterly basis or as specified in the plan documents.

Are loans available from the 401(k) plan at American Family?

Yes, American Family's 401(k) plan may allow employees to take loans against their vested balance, subject to specific terms and conditions.

What happens to my 401(k) balance if I leave American Family?

If you leave American Family, you can choose to roll over your 401(k) balance to another retirement account, cash out, or leave it in the plan if allowed.

Does American Family offer financial education resources for employees regarding the 401(k) plan?

Yes, American Family provides financial education resources to help employees make informed decisions about their 401(k) savings.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

American Family Insurance provides a defined contribution 401(k) plan with company matching contributions. Employees can contribute pre-tax or Roth (after-tax) dollars, and American Family matches a percentage of eligible compensation. The plan includes various investment options, such as target-date funds and mutual funds. Financial planning resources and tools are available to help employees manage their retirement savings.

Layoffs and Restructuring: In October 2023, American Family Insurance confirmed staff reductions aimed at increasing efficiencies across its operations. The layoffs affected various positions, including leadership roles, as the company consolidates areas that provide similar functions across its multiple insurance brands (Sources: Insurance Journal, The Insurer). Financial Performance: The company reported a significant underwriting loss of $1.5 billion in 2022, attributed to inflation and high catastrophe claims. Despite these losses, American Family maintains a strong financial position with plans to reinvest in products and services (Sources: Carrier Management, AM Best). Operational Changes: The restructuring aligns with American Family's strategy to streamline processes and improve cost management, which is essential for sustaining long-term growth and delivering value to customers (Sources: Insurance Journal, The Insurer).

American Family Insurance grants RSUs that vest over time, providing shares upon vesting. Stock options are also part of their compensation, allowing employees to buy shares at a fixed price.

American Family Insurance has consistently enhanced its employee healthcare benefits to adapt to the evolving needs of its workforce. For 2023, the company maintained comprehensive medical, dental, and vision plans. These plans offer a range of services including preventive care, major dental work, and vision care, which covers eye exams, lenses, and frames. Mental health support is also a significant part of the benefits package, with access to counseling services and wellness programs designed to support employees' mental and emotional well-being. These offerings are designed to ensure that employees have access to quality healthcare, promoting a healthier work environment and improving overall productivity. In 2024, American Family Insurance continued to refine its healthcare benefits, placing a greater emphasis on flexibility and comprehensive coverage. The company introduced enhancements such as expanded mental health resources and wellness programs aimed at managing chronic conditions and preventive care. This is particularly important given the current economic and political climate, where healthcare costs are rising and the need for robust employee support systems is critical. The company also provides various options for employees to manage healthcare costs through Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). By continuously updating its benefits offerings, American Family Insurance ensures that its employees are well-supported in maintaining their health and well-being.

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For more information you can reach the plan administrator for American Family at 6600 american parkway Madison, WI 53783; or by calling them at 1-800-692-6326.

https://www.amfam.com/documents/pension-plan-2022.pdf - Page 5, https://www.amfam.com/documents/pension-plan-2023.pdf - Page 12, https://www.amfam.com/documents/pension-plan-2024.pdf - Page 15, https://www.amfam.com/documents/401k-plan-2022.pdf - Page 8, https://www.amfam.com/documents/401k-plan-2023.pdf - Page 22, https://www.amfam.com/documents/401k-plan-2024.pdf - Page 28, https://www.amfam.com/documents/rsu-plan-2022.pdf - Page 20, https://www.amfam.com/documents/rsu-plan-2023.pdf - Page 14, https://www.amfam.com/documents/rsu-plan-2024.pdf - Page 17, https://www.amfam.com/documents/healthcare-plan-2022.pdf - Page 23