I wanted to bring to your attention an important shift happening in the financial markets—one that has historically been a precursor to a recession and could have significant implications for your retirement planning.

The U.S. Treasury yield curve, specifically the relationship between the 2-year and 10-year Treasury rates, has been inverted since July 2022. Typically, when short-term interest rates (like the 2-year Treasury) exceed long-term rates (like the 10-year Treasury), it’s seen as a sign of uncertainty about future economic growth.

However, when this curve starts to “uninvert”—that is, when long-term rates rise above short-term rates again—it is the most predictable signal that a recession may be approaching. Historically, this reversion marks a point when market expectations shift, and economic downturns tend to follow within the next 6 to 18 months.

The chart below shows that we have just come out of inversion territory within the last week.

What This Means for Your Retirement

As we move closer to this economic shift, there are important steps to consider to protect and optimize your retirement portfolio. Market volatility can have a profound effect on your investments, especially in times of economic downturn. Reviewing your asset allocation, ensuring you have a solid income strategy, and considering alternatives like indexing contracts can provide stability and security for your retirement income.

I’m here to help you navigate these changes and ensure your retirement plan is well-prepared for whatever may come.

Feel free to reach out to schedule a time to discuss any concerns or adjustments to your portfolio. Now is the time to plan ahead and make informed decisions for your financial future.