ABC-7 at 4: Smart Money- Higher Interest Rates

EL PASO, TEXAS (KVIA-TV)-Today's higher interest rates won't last forever. So, what money moves have you made to capitalize on them? Investment Advisor Brian Mirau has some ideas to help you manage your retirement savings while interest rates are still elevated.
He explains that Interest rates will continue to stay high throughout 2024. The Federal Reserve held interest rates at a 23-year high and will likely reduce the rate cuts it will make for the rest of this year. Rates should remain above the inflation rate for at least the following year.

Here are a few strategies to consider: Pay down high-interest debt and prioritize paying off your high-interest debts, such as credit card balances and personal loans, to reduce your overall cost of borrowing.

From an investor standpoint, take advantage of higher interest rates by placing funds in high-yield savings accounts or short-term certificates of deposit (CDs). At this time, we are seeing these in the 5 percent range. Fixed annuities are also another good option.

With these, you can lock in a higher interest rate for a longer period of time. We are seeing these close to the 6 percent range. Postpone large purchases requiring financing, such as homes or cars, until interest rates become more favorable. Entering the year's second half, especially with an upcoming election, can bring uncertainty to financial markets and personal finances. You want to diversify your investments. To mitigate risk, ensure your portfolio is well-diversified across different asset classes (stocks, bonds, real estate, annuities, and commodities).

Continue to focus on your long-term goals. Stick to your long-term financial plan rather than reacting to political events or market volatility. Constantly evaluate your emergency fund. Make sure you have 3 to 6 months' worth of living expenses saved in an easily accessible account to cover unexpected costs when you have that rainy day. From 1928 to 2016, the S&P 500 averaged over 10 percent. Making sure to be as tax-efficient as possible is a big one.
Maximize Tax-Advantaged accounts. Contribute the maximum allowed to your 401(k), IRA, or other retirement accounts. Consider contributing to a Roth IRA or Roth 401(k). Although contributions are made with after-tax dollars, withdrawals in retirement are tax-free, which can be huge if you expect higher tax rates. Also, look at Roth conversion strategies, which could significantly impact your tax situation in your retirement years.

Many other tax strategies are out there; you. It would help if you visited with your financial advisor or tax professional to explore ways to be tax efficient and have forward-thinking tax planning. It would help to have a game plan for your finances and investments.

Whether you are saving for a future retirement, retiring soon, or have been retired for years, it is always good to run an analysis and ensure your finances are on track. In the retirement analysis, we answer the question, do I have enough? Do you have enough to retire or continue in the retirement of your dreams?

For more information: "Smart Money for the Backside of Life," for anyone who wants to set up a visit.

Text "Retire": (915) 233-2904 for your free Retirement Analysis. You can also set a visit to receive a copy of Brian's book, Smart Money for the Backside of Life. Again, that number is (915) 233-2904; text "Retire." You can also visit their website at www.miraucapital.com/tv.