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As saving for retirement has become more of an individual obligation, many workers and retirees wonder if they have enough money saved.
New research shows the biggest concern among those cohorts is outliving their assets.
While there is no one-size-fits-all solution to address those worries, there are ways to help extend how long your money may last.

Lucigerma | Istock | Getty Images

Retirement confidence may be dropping due to the economy.
But for retirement savers and retirees alike, there’s one worry that stands out above the rest — the possibility they may outlive their assets, according to new research from research and consulting firm Cerulli Associates.

That worry looms large for more than half — 58% — of those individuals, the research found, and is an even bigger concern for Generation X and baby boomer respondents who are closer to or already in retirement.
More than half of retirees — 54% — rely on Social Security as their primary source of income. Of those respondents, 20% have no other source of income, Cerulli’s first-quarter survey of 1,500 401(k) plan participants found.
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The worries felt by both workers and retirees reflect the fact that retirement savings has become an individual obligation, rather than an employer or state obligation, said David Kennedy, senior analyst at Cerulli.
For workers and retirees, there is no silver bullet answer to fix their retirement worries.

Financial concerns have pushed some workers — 46% — to retire later than expected to meet income or savings needs to pay for basic expenses, according to Cerulli’s research.
Yet many older workers ages 50 through 70 face difficult working conditions, recent research from the Economic Policy Institute found.

Aside from working longer, their menu of choices include limiting spending, maximizing retirement contributions, delaying Social Security, buying annuities, purchasing long-term care insurance, increasing exposure to stocks or relocating to a place where costs are lower, Cerulli’s report notes.
“There’s not a one-size-fits-all solution for every retiree,” said Elizabeth Chiffer, associate analyst at Cerulli.
Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, said she typically brings up retirement before her clients have a chance to.
But many people fail to adequately plan for their retirement needs, said McClanahan, who is a member of CNBC’s Financial Advisor Council.

There’s not a one-size-fits-all solution for every retiree.

Elizabeth Chiffer
associate analyst at Cerulli

“A lot of people fly blindly,” McClanahan said. “They don’t really know.”
To shore up their confidence — and ultimately their retirement security — taking several steps may help.

1. Assess your current situation

It is difficult to know where you need to be financially until you know where you currently stand.
“Everybody should at least do a basic financial plan,” McClanahan said, to look at their current spending and savings levels, and whether that will support them in retirement.
Another helpful first step is to educate yourself, said Kennedy. Assess the options you have, the choices you may have to make in the future, and your current and future risks.

2. Look for ways to trim your spending

When retirement planning with clients, McClanahan said, she typically sees three types of situations: those who can definitely afford retirement, those who can probably afford retirement but need to watch their spending, and those who cannot afford it.
Especially for those in the latter camp, it helps to reassess spending and where they can trim back.

Cutting useless spending can help improve the retirement projections, McClanahan said.
It is important to reassess that analysis every year to make sure the spending is still in check, she said.

3. Consider an annuity

For retirees who anticipate living longer, McClanahan said she often recommends they use a portion of their nest egg to purchase a plain immediate fixed annuity, which can provide a steady stream of income.
“The way we position it when we think somebody needs to put money towards an annuity is that, ‘This is creating your own pension, just like the companies used to,'” McClanahan said.
For some clients, McClanahan likes to ladder more than one policy as they age, which can provide different payouts based on interest rates and their ages.
To be sure, there are some disadvantages to annuities. You have to be comfortable parting with a lump sum. And while an annuity will create a reliable income stream for the rest of your life, it typically does not allow you to pass those funds on to your heirs, McClanahan noted. More

Americans’ views about what it takes to be wealthy have changed since pre-pandemic times.
In a new Charles Schwab survey, Americans say having lots of money isn’t the same as being wealthy.
More people define wealth as their well-being than their money.

Many Americans feel wealthy — but don’t necessarily measure it in dollars and cents. Well-being, not money, has become the leading measure of wealth for most adults today, according to the new Charles Schwab “Modern Wealth” survey.
It takes an average net worth of $2.2 million to be considered “wealthy,” the survey found — but that’s the estimate respondents gave for other people.

What about you? Are you rich? How much money does it take for you to consider yourself wealthy? 
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Of the 1,000 adults surveyed, about 48% say they already feel wealthy. Yet their average net worth is $560,000 — about a quarter of what they think others need to be rich.
Millennials are overwhelmingly more likely to say they feel wealthy — with 57% of those ages 26 to 41 saying they feel this way, compared to only about 40% of Gen Z, Gen X and baby boomers. For millennials who say they feel wealthy, their average net worth is about $530,000. 

Wealth is a ‘very personal’ definition

“The definition of wealth is very personal, and it should be unique to one’s experience,” said certified financial planner Preston D. Cherry, founder and president of Concurrent Financial Planning in Green Bay, Wisconsin. He stresses the importance of having a financial plan based on your own wants and needs.

“If you do nothing, then nothing will happen,” said Cherry, who is a member of CNBC’s Financial Advisor Council.

One of the risks we run is thinking a certain amount of money is going to bring us happiness …

Brad Klontz
managing principal of Your Mental Wealth Advisors

How wealth and well-being intersect

When asked to characterize what being wealthy means to them, respondents overall mentioned their well-being (40%) more often than money (32%) and assets (26%). In 2017, the top response to what wealth means was money (27%). 
“Whether they know it or not, well-being is much more important,” said CFP and financial psychologist Brad Klontz, a managing principal of Your Mental Wealth Advisors in Boulder, Colorado.
“One of the risks we run is thinking a certain amount of money is going to bring us happiness, bring us peace, improve our lives, improve our relationships,” said Klontz, who is also a member of CNBC’s Financial Advisor Council.

“Unfortunately some people will sacrifice what matters most to them ultimately, in their goal to achieve an arbitrary wealth number.”
Yet, nearly two-thirds, 62%, of adults in the Schwab survey say enjoying healthy relationships with their loved ones better describes what wealth means than having a lot of money (38%). And, 7 in 10 adults say wealth is about not having to stress over money, not having more of it. 
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During the pause of more than three years on student loan bills, several of the companies that managed the debt for the government stopped doing so.
As a result, millions of borrowers will have to adjust to a new servicer in the fall.

Berk Ucak | Istock | Getty Images

How do I know if I have a different servicer?

Borrowers who are being transferred to a different servicer should receive alerts via email, said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.

These notices will explain any steps you’ll need to take, he said, and include information on your new servicer.
Kantrowitz has been tracking the servicing changes.

Borrowers previously with FedLoan should be transferred to MOHELA, or the Missouri Higher Education Loan Authority, he said.
Those who were serviced by Granite State will now be with EdFinancial Services. Accounts with Great Lakes Higher Education, Kantrowitz said, should be managed by Nelnet going forward.
And Navient’s borrowers will be moved to Maximus Federal Services/Aidvantage.
Borrowers can check who their new servicer is by logging in to StudentAid.gov., Kantrowitz said.

Do I need to do anything during the changes?

Borrowers shouldn’t have to do much during the servicer swap, Buchanan said.
Some will need to create an updated online account with their new company. “But the communications they received would have told them if they needed to take that step,” he added.
If you were enrolled in automatic payments with your servicer, which usually leads to a small discount on your interest rate, you may need to reenroll, Kantrowitz said.

You’ll also want to make sure your new servicer has your latest contact information, he said, as these details might have changed during the Covid pandemic.
Also, Kantrowitz said, “whenever there is a change of loan servicer, there can be problems transferring borrower data. Borrowers should be prepared for the possibility of glitches.”

When will my first payment be due?

The pause on federal student loan payments is slated to finally conclude within months. The Biden administration is preparing borrowers for their payments to resume by September.
Your due date will be at least 21 days after you’re sent a loan statement, Kantrowitz said.
“This may mean the earliest due date is Sept. 21,” he said. More

Older adults in the LGBTQ+ community are twice as likely to be single and four times less likely to have children as their non-LGBTQ+ peers, according to SAGE, a national advocacy organization for LGBTQ+ elders.
They may be estranged from biological family members who don’t accept their sexual orientation and/or gender identity.
Having an aging plan can help LGBTQ+ Americans make good decisions about care as they grow older and may need support.

Margaret Roesch, 67, and her wife, Pat McAulay, 68, wanted to have a supportive community around them as they grew older. So they helped to create a cohousing development for LGBTQ+ seniors and allies, making it easier to offer support to one another. 
“We said we don’t want to have to go back in the closet when we get older,” Roesch said from the front porch of her home in Durham, North Carolina. 

Opened in 2020, the Village Hearth is a neighborhood of 28 one-story accessible homes for residents ages 55 and up — and one of the few housing developments in the country specifically designed with LGBTQ+ people and allies in mind.  
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“We decided that we were going to be better in community, after having spent eight lonely years in Florida,” McAulay said. “It’s so rewarding to know there’s 30-some people here who have our backs.” 
“I find it very refreshing,” Roesch added.
“We’re all … going to die. People will get sick,” she said. “These things are going to happen, but we also find that we are really good at taking care of each other.”

How to avoid ‘the closet’ while ensuring good care

Older adults in the LGBTQ+ community are twice as likely to be single and four times less likely to have children as their non-LGBTQ+ peers, according to SAGE, a national advocacy organization for LGBTQ+ elders. They may also be estranged from members of their family who don’t accept their sexual orientation and/or gender identity.
“A lot of people in their 70s and 80s who have been closeted, they don’t feel safe and they remain closeted while going through care — that’s a stress,” said certified financial planner Stephanie Lee, founder of East Rock Financial in San Francisco. “You’re trying to get a caregiver, and you’re hiding who you are or hiding your relationship.”

The Village Hearth is a 55-plus cohousing community for LGBTQ+ adults, friends and allies located in Durham, North Carolina.

Experts say that makes it especially important to have an aging plan early. 
“As with any stage of life, planning is unique and personal to the individual,” said CFP Kyle Young, a senior vice president at Morgan Stanley Wealth Management in New York. “The key is to start a conversation, educate yourself and finalize plans to assure your wishes are made clear.”

Get legal documents to ensure wishes are followed

At Village Hearth, residents have taken steps to prepare their finances, arrange for care and consider end-of-life planning. They have held workshops on choosing financial and health-care powers of attorney, having an advance directive for medical decisions and finding an attorney to help draft those key legal documents. 
When you’re in the hospital or a care facility, “if you’re heterosexual, the spouse automatically gets visiting rights,” Lee said. That’s not always the case for same-sex couples, even if they’re legally married. 
“It’s really critical to get the legal papers to get those visiting rights,” she said, “so you can make those decisions.” 

Develop a caregiving plan early

The earlier you start planning, the easier it is to take steps to follow your plan and meet your goals.
“Having the benefit of time on your side will allow you and your loved ones to make sound, clearheaded decisions while considering cost, tax and broader estate implications of your plans,” said Young, who works with many LGBTQ+ clients.

Having the benefit of time on your side will allow you and your loved ones to make sound, clearheaded decisions.

Kyle Young
senior vice president at Morgan Stanley Wealth Management

Use the time between retirement and needing services to identify your support network, consider your financial situation, and educate yourself about care options that are available, recommends Allison O’Shea, founder of Openly Aging, an advisory firm in Durham.
“A lot of people don’t think about that in-between time,” said O’Shea, who works with clients as a so-called aging advisor after running senior living centers for many years. “There’s a really big piece missing when it comes to what you could be doing to prepare.” 

Create a network of support

Build a support group — neighbors, family, friends, loved ones and professionals whom you know you can lean on. 
If you’re single or not sure if you have people around you who are willing and able to step in, O’Shea recommends hiring a geriatric care manager. These professionals, who may also be social workers, nurses, psychologists or gerontologists, deal with elder-care issues regularly. They can be your advocate, make sure you’re able to access resources, and organize the support you’ll need. 

Consider the range of care options available

It is critical to understand what options you can afford and where to find assistance. “Don’t let your finances scare you,” O’Shea said. “You can create a plan that fits around your finances.”
Getting a handle on your monthly income and assets in retirement can help you determine where and how you’ll receive care later on — whether aging in place in your home or downsizing, or moving into some type of senior living arrangement. 
Local senior centers can be a valuable resource for older adults to find community and information, and many are working to serve a more diverse population. FiftyForward, which has seven community centers in central Tennessee to support older Americans, is working to build more inclusive community, conducting research and hosting cultural competency training. 

“Our country is unprepared for the burgeoning older adult group,” said Gretchen Funk, FiftyForward’s chief program officer. Issues of service access and isolation affect seniors overall, but discrimination can exacerbate those challenges for the LGBTQ+ community. 
“As a society, we need to look at this for all of us, because we will all be facing that,” said Funk. “And there should be power in advocating together.”
Some care services may be free based on your income but have long waiting lists. Knowing where to apply and when could help you mitigate costs. 
“If you have a plan or if you’re educated in what the options are, you’re not stressed over these big life decisions when you’re in a … crisis,” O’Shea said. “You have a step-by-step plan already laid out which will only save you time and money.” More

The “quiet luxury” trend has quickly caught on, even though, these days, most Americans are more likely to live paycheck to paycheck.
Marked by expensive materials in muted tones, quiet luxury is also known as stealth wealth.
As Americans’ economic circumstances get increasingly divided, consumers could benefit from the shift to low-key basics over loud logos, one financial expert says.

Actress Gwyneth Paltrow enters the courtroom for her trial in Park City, Utah, March 24, 2023.
Rick Bowmer | Getty Images

What is quiet luxury?

Marked by expensive materials in muted tones, quiet luxury, also known as stealth wealth, is “the complete lack of logos and anything too conspicuous,” said Thomaï Serdari, professor of marketing and director of the fashion and luxury program at NYU’s Stern School of Business. 
“Luxury brands rely on the quality of the materials, and they have techniques that are very particular to them,” she said, such as the cut, stitching or other small details only recognizable to those who are very familiar with a particular item. “That becomes a differentiator for those in the know,” Serdari said.
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In her daily courtroom appearances, Paltrow wore high-end brands such as Celine and The Row along with $1,450 black Prada boots and carried a $325 notebook by Smythson in the company’s signature blue.

“We have access to these semi-private moments, and we want to replicate their style,” Serdari said.  

Actress Gwyneth Paltrow exits a courtroom in which she is accused in a lawsuit of crashing into Terry Sanderson during a 2016 family ski vacation, Park City, Utah, March 21, 2023.
Rick Bowmer | Afp | Getty Images

Of course, understated luxury is not new.
On the heels of the financial crisis, “people who had money wanted to be a little bit more subdued,” Serdari said. In the decade and a half since, fashion became bigger and bolder, she added.
Now, the stealth-wealth style has been reborn once again as Americans’ economic circumstances get increasingly divided after the so-called K-shaped recovery left the wealthiest Americans even better off than before.
This time, however, there’s an even more understated undertone, notwithstanding the heftier price tag.
One of the central characters on “Succession” even scoffs at a tartan Burberry tote bag that retails for $2,890, calling the luxury bag “ludicrously capacious.”

How to get the stealth-wealth look for less

Can the typical American afford a $600 Loro Piana cashmere baseball hat, like the one worn on “Succession”? “I really doubt it,” Serdari said.
Fortunately, the quiet luxury trend is less about buying the exact item, but rather replicating the look with clothes that fit well, in neutral tones or monochrome, she said.  

Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, suggests purchasing a few signature staples, such as a coat or handbag, on sale or from a local consignment store, and pairing them with less-expensive jeans and T-shirts from Target or Walmart — just as Roman Roy did in the final season of “Succession.”
This type of quiet luxury, without the name brands and logos, is “overdue,” added McClanahan, who also is a member of CNBC’s Advisor Council. 
As the economy slows and persistent inflation makes many Americans feel stretched too thin, it’s time to shift away from a “keeping up with the Joneses” mentality.
“Find quality things that last a lot longer — that’s better than throwaway pieces,” McClanahan said.
Subscribe to CNBC on YouTube. More

The Consumer Financial Protection Bureau warns that 1 in 5 student loan borrowers have risk factors that could cause them to struggle when their bills resume.
During the three-year-long pause on payments, many of those with education debt have increased their debt obligations and fallen behind on other payments.

Yuliya Taba | E+ | Getty Images

More borrowers are behind on other payments

More than 1 in 13 holders of federal student loans are currently behind on their other payment obligations, the CFPB found.
As of March, around 2.5 million people with student debt were delinquent on another one of their loans or payments. That’s 200,000 more borrowers with a delinquency, compared with last September.
“These borrowers might be unable to make payments on their student loans if they are already missing payments on their credit cards or auto loans, which research suggests people often prioritize over their student loans,” said Kentia Elbaum, a spokesperson for the CFPB.
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Recent economic conditions are likely at least somewhat responsible for the uptick in delinquencies, said higher education expert Mark Kantrowitz.
“They might be behind on other debt because they got overextended due to higher inflation and higher interest rates,” he said.

Student loan borrowers are deeper in debt

Meanwhile, more than half of student loan borrowers expected to resume their payments have higher monthly debt-related expenses than they did before the pause on bills began (excluding their student debt or mortgage payment), the CFPB writes.
Many of these higher balances likely come from those aforementioned credit card and auto loan bills.
While federal student loan payments were suspended, many borrowers probably used their freed-up cash to take on more debt, Kantrowitz said.
“Unfortunately, the increased cash flow was always going to be temporary and debt is more long-term,” he said.

Because there’s no lending precedent for borrowers getting such a long reprieve from their bills, there is little evidence to hint at what could happen when the payments resume.
However, the CFPB’s findings show millions of student loan borrowers will resume their payments in a more precarious financial situation.
Consumer advocates say the risks will only rise if the Supreme Court strikes down Biden’s plan to cancel up to $20,000 in student debt for tens of millions of Americans. The justices are currently debating the validity of the president’s relief program and are expected to issue a ruling within weeks.
“Resuming student loan payments without cancellation will lead to unprecedented delinquencies and defaults for the most financially vulnerable borrowers,” said Persis Yu, deputy executive director at the Student Borrower Protection Center.

Even before the Covid-19-related public health crisis, when the U.S. economy was enjoying one of its healthiest periods in history, there were still problems plaguing the federal student loan system.
Only about half of borrowers were in repayment in 2019, according to an estimate by Kantrowitz. Around 25% — or more than 10 million people — were in delinquency or default, and the rest had applied for temporary relief measures for struggling borrowers, including deferments or forbearances.
These grim figures led to comparisons to the 2008 mortgage crisis. More

The Covid-19 pandemic raised awareness that the average American worker lacks a “cash cushion” for emergencies.
Here’s how some employers are working with BlackRock’s Emergency Savings Initiative to help change that.

Levi’s has run a worker savings program since 2015 but in recent years has participated in BlackRock’s initiative. Pictured, a Levi’s display at a Kohl’s in San Rafael, California.
Justin Sullivan | Getty Images

When new employees get hired at the Levi’s store in Lone Tree, Colorado, there’s one job perk for them that really stands out, says store manager Debbra Ward — a company emergency-savings program that includes a match.
If store workers save $40 per month, Levi’s will match that with another $40 per month; in addition, they get a $20 sign-on bonus.

Provided workers stay in the program for six months, that adds up to $500 — more than the $400 that surveys say many Americans can’t afford to pay in cash for unexpected emergency expenses.
The program runs once a year. But even after it ends, Ward expects the workers who have enrolled will continue to participate after they have built a habit of savings.
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For retail workers, many of whom are in their late teens and early 20s, that can be a powerful lesson, she said.
“This teaches you to be your own safety net,” said Ward, who has seen workers use the money on everything from car repairs to school expenses.

When Ward, who has worked for Levi’s for 13 years, relocated with her family to Colorado from California, she used her own savings through the program to help with moving costs as they bought their first home.
Levi’s has been running a program to help workers boost their emergency savings since 2015. But in recent years, the company has decided to partner with the BlackRock Emergency Savings Initiative, which helped Levi’s present its savings incentives in more creative way, according to Jenny Calvert Rodriguez, executive director of Red Tab Foundation, Levi’s employee-assistance fund that focuses on improving the financial health of both employees and retirees.

“Ultimately, we’re trying to get people into a set-it-and-forget-it [mindset] to get people to set aside money every month,” Rodriguez said.
Since Levi’s relaunched its emergency-savings program with BlackRock about a year ago, the company has attracted about 1,250 participants, Rodriguez said. Altogether, the company’s emergency-savings initiatives have included more than 3,000 employees, with about $1.2 million in savings.
Today, the BlackRock Emergency Savings Initiative has reached a new milestone of more than $2 billion in net new savings for the program’s participants.
More than 10 million people were reached with new savings products through BlackRock’s initiative.
More companies may be poised to start offering these benefits after Congress approved new retirement legislation that paves the way for employers to provide emergency-savings benefits. Experts say the changes are needed to help individuals and families shore up their cash reserves amid high inflation and rising interest rates that make carrying debt more expensive.
Other initiatives like SecureSave, a fintech company working to help employers set up emergency-savings programs for workers, emerged during the pandemic. Millennium Trust, a privately owned trust company, announced the launch of its emergency-savings benefits program for employers in March 2020.
“Employers need to get involved in this, because most people won’t save money unless their employer somehow does it for them through a payroll deduction,” personal finance expert Suze Orman, a co-founder of SecureSave, said earlier this year.

There’s really been a sea change over the last four or five years around the issue of emergency savings.

Timothy Flacke
executive director at Commonwealth

BlackRock’s Emergency Savings Initiative was established in 2019 with a philanthropic commitment of $50 million. To date, it has deployed $30 million.
The firm is working with nonprofit organizations including Common Cents Lab, Commonwealth and the Financial Health Network.
Other employers offering emergency savings in collaboration with BlackRock include Best Buy, which has seen more than 1,300 employees open accounts, and AutoNation, which offers several savings options to employees to help fit their needs.
In addition, BlackRock is also working with record keepers, payroll providers and workplace banking providers to give employers more access to savings features. That includes companies like Automatic Data Processing, Truist Financial Corp., Varo Bank and Mastercard.

Employer prompts can push workers to save

vitapix | E+ | Getty Images

Since BlackRock’s emergency-savings initiative was founded four years ago, the awareness of the need for it has increased, according to experts involved with the initiative.
“There’s really been a sea change over the last four or five years around the issue of emergency savings,” said Timothy Flacke, co-founder and executive director at the nonprofit Commonwealth.
The Covid-19 pandemic helped bring public attention to how close many people are living to the financial edge, Flacke said.
That has prompted more employers to try to get involved in providing savings benefits, he said. Policymakers are also stepping up.
It would previously have been a “wild dream that Congress would have enshrined emergency savings,” as they did last year in Secure 2.0, he said.

Most people won’t save money unless their employer somehow does it for them through a payroll deduction.

Suze Orman
personal finance expert and co-founder of SecureSave

Having a buffer of cash can help prevent workers from withdrawing from their retirement accounts when they are financially pinched, said Claire Chamberlain, chief investment officer and managing director, BlackRock Corporate Sustainability and Social Impact.
BlackRock’s initiatives have shown “saving even a small dollar amount can be meaningful,” Chamberlain said.

But beyond that, there’s a psychological boost from demonstrating to yourself that “I can be a saver” that is enormous and hard to capture in numbers, she said.
Ward, the Levi’s store manager, said she has seen firsthand how workers’ outlook on their ability to save has changed by even just giving up their weekly lattes.
“Really just putting aside a little bit of each paycheck helps people to get into the habit of savings,” Ward said. More

The Federal Reserve is expected to pause its interest rate hiking campaign at the end of its two-day meeting next week.
Consumers will still feel the effects of higher rates and persistent inflation.
Here’s a breakdown of how the Fed impacts your monthly expenses and savings.

damircudic | E+ | Getty Images

The Federal Reserve is likely to temporarily pause its aggressive interest rate hikes when it meets next week, experts predict. But consumers may not see any relief.
The central bank has raised interest rates 10 times since last year — the fastest pace of tightening since the early 1980s — only to see inflation stay well above its 2% target.

“We are living in uncharted territory,” said Charlie Wise, senior vice president and head of global research and consulting at TransUnion. “The combination of rising interest rates and elevated inflation, while not uncommon from a historical perspective, is an unfamiliar experience for many consumers.”
“A pause is not going to make things better,” he added.
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Although the Fed’s rate-hiking cycle has started to cool inflation, higher prices have caused real wages to decline. That’s squeezed household budgets, pushing more people into debt just when borrowing rates reach record highs.
Even with a pause, “interest rates are the highest they’ve been in years, borrowing costs have gone up dramatically and that isn’t going to change,” said Greg McBride, chief financial analyst at Bankrate.com.

Here’s a breakdown of how the benchmark rate has already impacted the rates consumers pay:

Credit card rates top 20%

The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.
For starters, most credit cards come with a variable rate, which has a direct connection to the Fed’s benchmark rate.
After the previous rate hikes, the average credit card rate is now more than 20% — an all-time high, while balances are higher and nearly half of credit card holders carry the debt from month to month, according to a Bankrate report.

Mortgage rates are near 7%

Although 15-year and 30-year mortgage rates are fixed, and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.
The average rate for a 30-year, fixed-rate mortgage currently sits at 6.9%, according to Bankrate, up from 5.27% one year ago and only slightly below October’s high of 7.12%.

Adjustable-rate mortgages, or ARMs, and home equity lines of credit, or HELOCs, are pegged to the prime rate. As the federal funds rate rose, the prime rate did, as well, and these rates followed suit.
Now, the average rate for a HELOC is up to 8.3%, the highest in 22 years, according to Bankrate. “While typically thought of as a low-cost way to borrow, it no longer is,” McBride said.

Auto loan rates are close to 7%

Even though auto loans are fixed, payments are getting bigger because the price for all cars is rising along with the interest rates on new loans.
The average rate on a five-year new car loan is now 6.87%, the highest since 2010, according to Bankrate.
Keeping up with the higher cost has become a challenge, research shows, with more borrowers falling behind on their monthly loan payments.

Federal student loans are set to rise to 5.5%

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by the Fed’s moves. But as of July, undergraduate students who take out new direct federal student loans will see interest rates rise to 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.
For now, anyone with existing federal education debt will benefit from rates at 0% until the payment pause ends, which the U.S. Department of Education expects could happen in the fall.

Private student loans tend to have a variable rate tied to the Libor, prime or Treasury bill rates — and that means that those borrowers are already paying more in interest. How much more, however, varies with the benchmark.

Deposit rates at some banks are up to 5%

While the Fed has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate. The savings account rates at some of the largest retail banks, which were near rock bottom during most of the Covid pandemic, are currently up to 0.4%, on average.
Thanks, in part, to lower overhead expenses, top-yielding online savings account rates are now over 5%, the highest since 2008’s financial crisis, according to Bankrate.
However, if the Fed skips a rate hike at its June meeting, then those deposit rate increases are likely to slow, according to Ken Tumin, founder of DepositAccounts.com.
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