If you’ve been watching the headlines or your account statements lately, you’ve probably noticed that interest rates are higher than they’ve been in years. And if you’re retired or approaching retirement, that’s a big deal. But the real question is: Are you taking full advantage of it?

Let’s dive into how today’s rate environment can work in your favor, and why acting now might be smarter than waiting.

The Opportunity in Today’s Rates

Right now, long-term interest rates — like those on 10-year government bonds — are hovering around 4.25% to 4.5%. That’s significantly higher than we’ve seen in recent years, and it creates an opportunity for income-focused investors to lock in yields that may not stick around forever.

Why the caution? Because the financial landscape is shifting. There are increasing signs that the Federal Reserve may start cutting short-term rates in response to a potential economic slowdown or recession. When that happens, CD rates and other short-term options could start falling — and fast.

CD Rates: Not Always the Best Option

If you’re thinking about CDs (certificates of deposit), it’s important to understand what you’re really getting. Most CDs are based on short-term interest rates. So while they may look attractive now, there’s a good chance they could renew at lower rates in the future. That’s especially risky if you’re counting on that income in retirement.

Even worse? CDs are short-term assets. If you’re using them to fund a long-term retirement — which could last 20 or 30 years — you’re mismatching your assets and liabilities. And that can lead to serious income shortfalls down the road.

Income First, Growth Second

In retirement, your financial focus should shift. Instead of chasing the highest returns or timing the market perfectly, your goal should be generating consistent, reliable income.

That’s where an income-first strategy comes in. By prioritizing investments that generate interest and dividends — like bonds, bond-like instruments, or dividend-paying stocks — you create a more stable financial foundation. And unlike CDs, many of these investments can provide income for the long haul, with less reinvestment risk.

What’s more, quality dividend-paying stocks often maintain or even grow their payouts, helping you keep up with inflation over time.

Consider Disintermediation: Cut Out the Middleman

Here’s a concept that could change the way you think about your investments: disintermediation.

It’s a fancy term that simply means removing the middleman.

When you invest in a bank CD, for example, the bank uses your money to make loans — often at much higher interest rates than what they pay you. But when you invest directly in corporate bonds or other fixed-income instruments, you become the lender, and you collect the interest — not the bank.

Not only does this potentially give you a better return, but it also gives you more control over how your money is working.

Don’t Wait for the Perfect Rate

Many investors fall into the trap of waiting for rates to go just a little higher before locking in. But here’s the reality: trying to time interest rates is like trying to time the stock market—it’s nearly impossible.

If today’s rates meet your needs and help you reach your retirement goals, waiting for a slightly better yield could actually cost you in the long run. This is especially true if rates begin to drop — and there are plenty of signs that could happen.

The Bottom Line

If you’re retired or within 10 years of retirement, now is the time to re-evaluate your strategy. Locking in today’s higher yields with long-term, income-generating investments can give you peace of mind, stability, and the income you need — no matter what happens next in the markets.

Don’t wait for interest rates to peak. You don’t have to be perfect — you just have to be prepared.