2015 Interest Rates Survey

2015 Interest Rates Survey

September 28, 2015 – If you’ve been sitting around waiting for interest rates to rise in a meaningful way sometime soon, a recent report from the Executive Office of the President of the United States might give you an unhappy pause.

Not that a reading of “Long-Term Interest Rates: A Survey,” published July, 2015, predicts anything catastrophic. It simply lays bare a few realities that many people have spent a lot of time trying hard not to accept.

Briefly summarized, the survey reveals:

Rates have been on a long, steady decline for more than a generation.

Nobody really saw this coming.

It’s happening everywhere, not just the United States.

This could be permanent (or close to it).

Experts were wrong before and they’re probably going to be wrong again.

Rates probably aren’t heading too far north anytime soon.

Since a projection of long term interest rates is an important component in developing any Administration’s Presidential budget, this sobering news underscores the importance of setting realistic expectations.

Speaking of Realistic Expectations

HistoricalLongTermInterestRatesIf you’ve been resisting making long term financial commitments with your money out of fear you’d end up with some kind of buyer’s remorse if rates improve dramatically, maybe this survey will reduce your anxiety.

True, it’s not an ultra-rosy projection; however, maybe by tempering your expectations, you can move forward with confidence that you’ll be locking into something that is as good as you can get in the near term.

Structured settlements, with the added benefit of paying cash flows that are income tax-free (physical injury) or tax-deferred (non-physical injury, including attorney fees), remain a preferred settlement alternative despite the persistent “low” interest rate cautions.

Same with retirement annuities. Once you accept that security backed instruments are likely to remain close to status quo for much of the next generation, your incentive to hoard cash lessens.

Nobody wants to buy a TV set the day before it goes on sale. Maybe knowing there won’t be any “sale” on interest rates in the foreseeable future will allow you to move forward more confidently to secure your own future.

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