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Farmers Insurance Group Employees: Navigating Retirement Amid Rising Mortgage Rates

For Farmers Insurance Group employees approaching Retirement, rising Treasury yields and broader economic conditions drive mortgage rates - something to consider when making Retirement savings and housing decisions - says Michael Corgiat, a representative of the Retirement Group, a division of Wealth Enhancement Group.

As Farmers Insurance Group employees approach Retirement, understanding how inflation, Treasury yields and mortgage rates affect long-term Retirement planning is critical, says Brent Wolf, of the Retirement Group, a division of Wealth Enhancement Group.

In this article we will discuss:

1. The effect of rising mortgage rates despite Federal Reserve actions.

2. What Treasury yields affect mortgage rates and borrowing costs.

3. Inflation and economic policies affect retirement planning for Farmers Insurance Group employees.

But even as the Federal Reserve eased monetary conditions by cutting its benchmark rate by a quarter-point after a substantial half-point decrease in September, mortgage rates have shifted in the opposite direction in recent months. The 30-year fixed mortgage average jumped more than half a point to 6.79%, Freddie Mac reported. This upward trend is likely to continue, helped by rising 10-year Treasury yields - which affects financial planning for Farmers Insurance Group employees.

That situation demonstrates an important economic principle: mortgage interest rates aren't directly controlled by Federal Reserve decisions but driven heavily by Treasury yield movements. All these fluctuations are related to broad economic indicators which are pointing to solid growth now. That means Treasury yields and mortgage rates remain high—a divergence from the Fed's goal of lowering borrowing costs in housing and automotive - an area Farmers Insurance Group employees may want to monitor closely.

And the election of President Donald Trump has complicated market expectations. Anticipated Trump tax cuts that would increase the federal deficit also have pushed up borrowing interest rates. The interaction of monetary policy and economic outlook demonstrates the complex dynamics that shape borrowing costs that are relevant to retirement planning in the Farmers Insurance Group workforce.

For those at Farmers Insurance Group planning to retire, knowing how inflation affects fixed investments like Treasury bonds is critical. As inflation expectations rise, Treasury yields rise, which can raise mortgage rates. This affects retirees considering refinancing or home expansions. One 2023 Federal Reserve report said retirees are especially vulnerable to these economic shifts because fixed incomes may reduce purchasing power during inflationary periods.

Imagine the economy as a big ship on open water whose captain is the Federal Reserve who adjusts interest rates to manage conditions. But the course is shaped more by the captain's actions - it's determined by winds and currents, as measured here by Treasury yields and economic expectations. Though the captain slows to make the journey smoother, strong winds such as higher Treasury yields driven by growth forecasts and fiscal policies can whipsaw mortgage rates. This creates additional turbulence for passengers nearing their destination - like Farmers Insurance Group employees nearing retirement.

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Sources:

1. Giovanetti, Erika. 'The Fed Cut Rates. Why Are Mortgage Rates Higher?' U.S. News & World Report , 18 Dec. 2024, https://money.usnews.com/loans/mortgages/articles/the-fed-has-been-cutting-rates-why-are-mortgage-rates-higher .

2. Karl, Sabrina. 'Here's What Markets Now Predict for 2025 Fed Rate Cuts—And What It Could Mean for Mortgage Rates.' Investopedia , 26 Feb. 2025, https://www.investopedia.com/heres-what-markets-now-predict-for-2025-fed-rate-cuts-and-what-it-could-mean-for-mortgage-rates-11686953 .

3. Rosen, Andrew. 'How Will Mortgage Rates Impact The Real Estate Market And Your Retirement Accounts?' Forbes , 5 May 2022, https://www.forbes.com/sites/andrewrosen/2022/05/05/how-will-mortgage-rates-impact-the-real-estate-market-and-your-retirement-accounts .

4. Struthers, Mark. 'Navigating Mortgage Rates in Retirement Planning. Why Did Rates Go Up After The Fed Lowered Rates?' Sona Wealth Advisors , 7 Nov. 2024, https://www.sonawealthadvisors.com/the-economic-and-political-influence-on-mortgage-rates .

5. Michaud, Michael. 'Retiree Do's and Don'ts in a Rising-Rate Environment.' Morningstar , 15 May 2018, https://www.morningstar.com/retirement/retiree-dos-donts-rising-rate-environment .

What is the 401(k) plan offered by Farmers Insurance Group?

The 401(k) plan at Farmers Insurance Group is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.

How does Farmers Insurance Group match employee contributions to the 401(k) plan?

Farmers Insurance Group offers a matching contribution to the 401(k) plan, which typically matches a percentage of the employee's contributions, up to a certain limit.

What are the eligibility requirements for the 401(k) plan at Farmers Insurance Group?

Employees of Farmers Insurance Group are generally eligible to participate in the 401(k) plan after completing a certain period of employment, usually within the first year.

Can employees of Farmers Insurance Group make changes to their 401(k) contributions?

Yes, employees of Farmers Insurance Group can change their contribution amounts at any time, subject to certain plan rules.

What investment options are available in the Farmers Insurance Group 401(k) plan?

The Farmers Insurance Group 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to tailor their investment strategy.

Is there a vesting schedule for the employer match in the Farmers Insurance Group 401(k) plan?

Yes, the Farmers Insurance Group 401(k) plan has a vesting schedule that determines how much of the employer match employees can keep if they leave the company.

How can employees at Farmers Insurance Group access their 401(k) account information?

Employees can access their 401(k) account information through the Farmers Insurance Group employee portal or by contacting the plan administrator.

What happens to the 401(k) savings if an employee leaves Farmers Insurance Group?

If an employee leaves Farmers Insurance Group, they can roll over their 401(k) savings into another retirement account, withdraw the funds, or leave the savings in the Farmers Insurance Group plan if allowed.

Can employees of Farmers Insurance Group take loans against their 401(k) savings?

Yes, the Farmers Insurance Group 401(k) plan may allow employees to take loans against their savings, subject to specific terms and conditions.

Are there penalties for withdrawing funds from the Farmers Insurance Group 401(k) plan before retirement age?

Yes, early withdrawals from the Farmers Insurance Group 401(k) plan may incur penalties and taxes unless certain exceptions apply.

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For more information you can reach the plan administrator for Farmers Insurance Group at p.o. box 4363 Woodland Hills, CA 91365-4363; or by calling them at 800-451-0797.