How might rising interest rates impact long-term investing decisions? Discuss the impact of a rate hike on long-term savings: fixed income, long-term care.
If you are in or nearing retirement, you may be watching rising interest rates with a mixture of optimism and fear.
The optimism comes from hopes of finally getting more out of your certificates of deposit and other short-term savings. The fear is that investments in the bond market might continue to sag, making yields on current fixed income holdings look rather disappointing compared with what new investments might offer. And if you have money in bond funds, you may already be feeling a bit lighter in the pockets.
For investors facing complicated choices with long-term savings as interest rates rise, financial experts offer these six tips to help you pursue your retirement goals.
Also worth pondering: Rising rates could benefit anyone thinking about buying long-term care insurance. Higher interest rates could help insurance providers earn more money on the reserves they set aside for future claims, meaning they may be able to avoid increasing premium rates on new offerings, according to the American Association for Long-Term Care Insurance.
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