Then the tide finally rolled back in.

Over the last few years, interest rates have climbed to levels we haven’t seen in more than 15 years — and with that shift has come a brand-new retirement landscape.

Some things have gotten better, some more challenging, and some strategies have become surprisingly attractive again.

Let’s walk through what has changed in this higher-rate world — and just as importantly, what still works.

1. Bonds aren’t the ‘safe haven’ they used to be — but their future looks brighter

For decades, bonds were the dependable friend in a retirement portfolio — steady, predictable and not easily rattled. But when interest rates rose quickly, bond prices fell sharply, leaving many retirees asking, “Wait… I thought these were the safe things?”

Here’s the simple explanation:

• When interest rates go up, existing bond prices go down
• The longer the bond maturity, the bigger the swing

That’s why many conservative portfolios got hit hard in 2022 and 2023.

But here’s the upside: Today’s new bonds (and bond funds) are yielding more than they have in years. That means the income side of retirement planning is finally breathing again. For retirees who rely on predictable income, that’s a welcome shift.

Still, the volatility reminded many people of an uncomfortable truth: Bonds are “safer,” but they’re not risk-free. And in retirement, you don’t get a do-over if the market hits you early.

2. Cash finally pays something — but it’s not a long-term strategy

For the first time in a long time, retirees can earn 4%-5% on high-yield savings accounts, CDs, money-market funds and even Treasury bills.

That’s good news.

But it has also created a trap.

When cash is paying more than the market feels like it is, it lures people into thinking they can sit on the sidelines indefinitely. The problem? High cash yields rarely last. They rise quickly and fall just as quickly when the Federal Reserve shifts policy.

Think back: Retirees who parked money in CDs in 2007 felt brilliant — until rates collapsed to near zero shortly after.

Cash plays a role in retirement:

• Emergency funds
• Short-term spending
• Buffer assets for down years

But it isn’t a long-term plan by itself. Inflation still wins over time.

3. Annuities have quietly become more attractive (yes, really)

Here’s something many retirees don’t realize: Annuity payouts are directly influenced by interest rates.

For years, when rates were low, annuity companies struggled to offer strong benefits. Income payouts were modest. Fixed rates were tiny. FIAs had far less upside potential.

That has changed dramatically.

Today:

• Fixed annuities are offering rates we haven’t seen in over a decade.
• FIAs are crediting more interest with stronger participation rates.
• Lifetime income benefits have become meaningfully more competitive.

In plain English:

Higher interest rates give annuity companies more power to deliver meaningful guarantees.

That’s one reason retirees have poured record amounts into annuities the last two years. They’re rediscovering something Wall Street often forgets: Predictability becomes priceless the closer you get to retirement.

The combination of protected growth and guaranteed income is looking better than it has in a very long time.

4. Spending strategies look different in a higher-rate world

When interest rates were near zero, retirees were forced to draw down more investments to meet their income needs. Now, with better yields in multiple places, income planning can be more balanced.

Here’s what has shifted:

The 4% rule looks less reliable

In a volatile bond market with big swings, withdrawing a fixed 4% every year — whether the market cooperates or not — has become riskier.

Today’s world calls for more flexible approaches, such as:

• Guardrails strategies
• Bucket strategies
• Income flooring using annuities

These allow retirees to adapt rather than forcing a rigid system onto unpredictable markets.

Guaranteed income matters more

Higher rates have made guaranteed lifetime income more attractive relative to market withdrawals. Many retirees like knowing their essential bills are covered regardless of whether the market is up, down or sideways.

Sequence-of-returns risk still exists

Even with higher rates, the order of your market returns — especially early in retirement — matters enormously. A few bad years at the start can permanently damage your plan.

That’s one reason tools like FIAs have surged: They help buffer the downside during the years you can least afford it.

5. Tax planning still drives everything

Even in a higher-rate world, one truth hasn’t changed: Taxes will determine how much of your retirement income you actually keep.

Roth conversions, timing distributions, managing RMDs and avoiding IRMAA surprises are still essential. In fact, the higher yields you earn today may push more of your income into higher tax brackets tomorrow.

A great retirement plan isn’t just about growth.

It’s about tax-efficient growth.

6. What still works — no matter the interest-rate environment

Here’s the encouraging part: Even with all these changes, the core principles of solid retirement planning haven’t changed.

• Diversification still works. Not just stocks and bonds — but also annuities, cash reserves and tax-diversified buckets.

• Risk should decrease as retirement approaches. Because losing money at 65 feels very different than losing money at 45.

• Guaranteed income still creates confidence. Studies continue to show that retirees with predictable monthly income are more confident and spend more freely.

• Protecting against market downturns is still essential. Especially in the first 5-10 years of retirement.

• A customized plan always beats a cookie-cutter rule-of-thumb. Every retiree has different goals, income needs, health factors and risk tolerance. Retirement planning hasn’t — and never will — be one-size-fits-all.

The bottom line

A higher-interest-rate world has changed the math of retirement — sometimes in surprising ways:

• Bonds may finally pay again, but they come with more volatility.
• Cash feels great now, but it’s still temporary.
• Income strategies need more flexibility.
• And annuities — often overlooked — have become far more compelling due to stronger interest-rate environments.

But what hasn’t changed is the need for a plan that blends growth, protection, tax-efficiency and guaranteed income in a way that fits your life.

For many retirees, this new environment isn’t something to fear — it’s something to take advantage of. You simply need the right guide and the right framework.

And that’s where a conversation can make all the difference.

Lyle Boss, The REAL BOSS Financial, endorsed by Glenn Beck as the premier retirement advisor for Utah and the Mountain West States. Boss Financial, 955 Chambers St. Suite 250, Ogden, UT 84403. Telephone: 801-475-9400. https://www.safemoneylyleboss.com/