US. Will Rising Rates Rattle Retirement Plan Returns?
Yields on the U.S. 10-year Treasury briefly eclipsed 3.0% last week. This is notable as we have not crossed that threshold since 2014, it represents over a double in 10-year Treasury yields from their lows in July 2016 and some say it could mark the end of a multi-decade long bull market in bonds. The common adage of when bond yields increase, bond prices decrease could add some headwinds to employees trying to save for their retirement. However, things are seldom that simple. Based on the current interest rate environment, should employers stay the course with their retirement plan investment line-ups, or is now the time to consider changes? During my conversation on the 401(k) Fridays Podcast with Brett Wander, Senior Vice President and Chief Investment Officer for Fixed Income at Charles Schwab, he stressed the importance of “understanding the distinction between short-term rates and long-term rates” as you consider your options. Let’s delve into that while hitting on a few areas employers should discuss today to create a balanced forward-looking investment menu in a rising rate environment.
Read More: Forbes
