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Be Wise With Money
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4 Saving Strategies in a Low Interest Rate Market
July 1, 2016
Today's historically low interest rates are the epitome of the good news/bad news adage. The good news is you can get low mortgage and other loan rates. The bad news is you earn only pennies on your savings. May as well keep your money under the mattress, right? Not so fast!
By being overly conservative, you could be doing more harm than good over the long haul. The simple reason is inflation. Inflation can erode any savings value if your money is just sitting in the bank.
These low savings rates are simply not keeping up with the 3% inflation rate. It’s like buying a candy bar today for $1.25 and finding that it costs $1.30 next month due to inflation.
The marketplace is not going to change any time soon, so it is important to continue to save. To help you manage the current low rates and still have growth, consider putting your savings into four buckets based on your goals. The caveat is you have to be willing to take on some risk. It's the ol' risk versus reward conundrum.
The four savings buckets are:
With savings growth, there is no such thing as a “FREE” lunch since you have associated risk with each option. Talk to your financial representative to find out the best savings options for your risk tolerance level and goals.
Keep on saving – it’s guaranteed the market will change!
What you can do:
- Figure out your risk tolerance level.
- Review your savings buckets to make sure they support your goals.
- Understand how your savings can potentially grow to meet your needs.
- Meet with your financial representative to get any questions answered and make adjustments as needed.
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Securities and investment advisory services are offered through Thrivent Investment Management Inc., 625 Fourth Ave. S., Minneapolis, MN 55415, a FINRA and SIPC member and a wholly owned subsidiary of Thrivent Financial. Thrivent Financial representatives are registered representatives of Thrivent Investment Management Inc. They are also licensed insurance agents/producers of Thrivent.
For additional information, visit Thrivent.com/disclosures.