Student loan woes & tariff blows...SMH
In this issue, we’ll address how tariffs will impact retirement plans and concerns regarding the DOE & student loans.
The Wealth Minute
Tariffs Giving Retirement An Uppercut
I was chatting with a new client a few days ago and she mentioned that her money market account interest rate took a massive nose dive.
She wanted to know why.
The answer...Tariffs.
When the stock market is volatile, almost all account types can be impacted.
I say "almost all" because there are accounts that are sheltered from the full blow of a market correction.
My clients that have a significant portion of their retirement savings in these accounts are in a much better position than those who are heavily invested in stock market accounts.
The key is balance, however. There are tradeoffs to every type of account and having a balance portfolio is the absolute best way to ensure optimum protection.
Whatever you do, don't panic.
It's called a market correction for a reason. It was never meant to go high and stay high. Newton's law applies here also.
"What goes up must come down."
Wealth Move
Consider rebalancing your accounts to maximize on the correction.
If you're not planning for the impact of market volatility, you may want to consider it. Click here to schedule some time to discuss your next wealth moves.
If you're planning to retire in the next 3-5 years, it would be highly beneficial to review your current numbers to make sure your assumptions will hold in the current climate.
The Freedom Path
Student Loans On The Chopping Block
With the Department of Education firmly in the sight of the Trump Administration, many are concerned about the future of their student loan repayment plans...and rightfully so.
This is not a surprise to me, nor should it be a surprise for you.
President Trump has made no secret of his distaste for the handling of student loans.
So what does it all mean for you.
It really is business as usual until the speculated changes are actually executed.
Continued Disbursement: Federal student loans and financial aid programs, such as Pell Grants, will continue to be disbursed as long as they are authorized and funded by Congress.
Potential Disruptions: Experts warn that core functions of the department could experience outages, making it difficult for students to obtain or renew financial aid, and for borrowers to access benefits provided by current law.
Management of Existing Loans: While the government is expected to continue collecting on student loans, changes in administration might introduce uncertainties in loan servicing, potentially leading to delays in repayments and alterations to forgiveness programs.
Here's a detailed article on other key considerations you will want to keep an eye on in the days and weeks to come.
Wealth Move
In the meantime, below are a list of next steps for you as more guidance develops:
Stay Updated on Policy Changes. The absolute best source of all information is the official student loan website.
Check Your Repayment Plan. This is key. With all of the changes that are taking place, you will want to be sure you know what plan you're on.
Since you cannot currently recertify your income if you're on an Income Driven Repayment (IDR) plan, stay in contact with your loan service provider for the latest information.
Book of The Month
The March 2025 book of the month is "The Richest Man In Babylon by George S. Clason.
I read this book every year. It was originally written in 1926 and is STILL RELEVANT.
The edition I'm giving is the updated version to making it easier to understand.
Take notes and implement what you learn.
Coffee Chat Question
If we were to meet for coffee, what would you want to know?
Feel free to email me questions that will anonymously be added to this section during each edition.
“My money market account interest rate dropped significantly. Should I move my money?”
As mentioned above, this drop is directly related to stock market volatility.
So while you can move your money, it's not going to earn a ton in any other money market account or CD.
The better question is "why so much money in taxable accounts?"
Moving money from one money market account to another or to a CD or mutual fund isn't really changing your financial picture.
It's all still being taxed.
Now would be the time to consider transitioning as much money as possible into tax-free accounts.
This way, you're done with taxes and whatever growth you earn is yours to keep.
When that is the case, a slight drop in the interest rate doesn't hurt so much because you're still poised to earn and you won't pay taxes on any gain.
Click here is you want to go deeper with this.
I hope that helps.
Did You or Someone You Know Take The Federal Employee Deferred Resignation?
These are challenging times for many federal workers.
Hasty decision making can make them all the more challenging.
Click here to schedule a FREE 30 minute review of your financial options as you prepare to transition.
