Weekly Market Notes – November 23, 2020

For the Week of November 23, 2020

The Markets

Stocks closed lower Friday amid rising coronavirus cases, increased state-level shutdowns, and fiscal stimulus developments. On Thursday, U.S. Treasury Secretary Steven Mnuchin said he would allow pandemic-relief lending programs to expire at the end of the year. For the week, the Dow fell 0.65 percent to close at 29,263.48. The S&P lost 0.73 percent to finish at 3,557.54, and the NASDAQ climbed 0.25 percent to end the week at 11,854.97.

Returns Through 11/20/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-0.654.697.6810.2313.12
NASDAQ Composite (TR)0.2533.2140.3121.6419.64
S&P 500 (TR)-0.7311.9516.6013.4513.49
Barclays US Agg Bond (TR)0.597.317.265.414.37
MSCI EAFE (TR)1.872.065.713.505.83
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

More Bonds Than Stocks — As of June 30, the U.S. stock market was $33 trillion in size. As of that same date, the U.S. bond market was $50 trillion in size (source: Wilshire, SIFMA, BTN Research). 

Bulls — 56 percent of investors surveyed as of Nov. 11 are bullish on U.S. stocks for the upcoming six months, the highest percentage recorded in this weekly survey since Jan. 3, 2018 (source: Amer. Assoc. of Individual Investors, BTN Research).

Taxes — To take deductions on Form 1040, a taxpayer can use the standard deduction or the taxpayer can itemize deductions if the latter is greater than the former. The standard deduction will be $25,100 for married couples filing jointly and $12,550 for individuals in 2021. Please consult a tax expert for details (source: IRS, BTN Research).

WEEKLY FOCUS – Safe Holiday Shopping in 2020

In a year unlike any other, holiday shopping is sure to look different as well. According to Deloitte’s 35th annual holiday shopping survey, the average household expects to spend $1,400 this season, 7 percent lower than last year. Participants cited economic worries for reigning in their overall spending and safety concerns for reducing travel and socializing outside the home. Not surprisingly, over half plan to do more online shopping.

Unfortunately, increased online shopping leads to increased online scams. Here are a few tips to follow if you’re considering a purchase off the beaten path.

While online shopping may offer fewer impulse-buying temptations than in-store experiences, it’s still important to create a disciplined budget for gift giving. From holiday spending to college funding and retirement planning, our office can be a resource for your financial needs. Call us for assistance when you need to create or update a plan for achieving your financial goals.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3342705.1

Weekly Market Notes – November 16, 2020

For the Week of November 16, 2020

The Markets

Stocks rose Friday amid upbeat earnings reports and a surge in virus cases. Positive vaccine news helped the Dow and the S&P achieve strong weekly gains. On Monday, Pfizer reported its vaccine proved over 90 percent effective in its trial. For the week, the Dow rose 4.19 percent to close at 29,479.81. The S&P gained 2.21 percent to finish at 3,585.15, and the NASDAQ dropped 0.53 percent to end the week at 11,829.29.

Returns Through 10/13/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)4.195.378.6210.4914.04
NASDAQ Composite (TR)-0.5332.8840.7821.7720.44
S&P 500 (TR)2.2112.7718.0913.7214.40
Barclays US Agg Bond (TR)-0.146.687.295.274.28
MSCI EAFE (TR)3.890.183.652.925.96
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Bad but Not That Bad — The March 27 CARES Act included $139 billion of relief for the 50 U.S. states. From Feb. 29 to Aug. 31, the tax revenue collected by all U.S. states was down $30 billion over the same six-month period from a year earlier. When the CARES Act was being debated in Congress, U.S. governors requested financial support of $500 billion from lawmakers (source: National Governors Association, BTN Research).

Many Can’t Wait — An American worker may begin receiving a monthly Social Security retirement benefit as early as age 62, albeit at a reduced level from what is available at one’s full retirement age. Just under 50 percent of American blue-collar workers take their retirement benefits at age 62, while only 38 percent of white-collar workers begin their retirement benefits early (source: Center for Financial Security, December 2019, BTN Research).

Down, But Getting Better — From a February peak of 158.8 million jobs nationwide, the United States was down 9 million jobs to 149.8 million workers as of the end of October (source: Department of Labor, BTN Research).

WEEKLY FOCUS – Maximizing Your Employee Benefits

If you’re among the 49 percent of Americans who receive employer-sponsored health care coverage, you may have already received information on your company’s open enrollment. In previous years, you might not have taken much time to review your company’s options. But the current pandemic underscores the importance of securing the best possible coverage and value.

Even before COVID hit, workers’ average single deductible rose to $1,644 in 2020 – almost double from 10 years ago. And typical annual family premiums under employer-sponsored plans rose 4 percent from 2019 to $21,342. During the pandemic, many of us have postponed tests, routine care, and procedures. If much of that deferred care is scheduled in 2021, PwC’s Health Research Institute projects medical costs could rise as much as 10 percent above pre-coronavirus levels.1

Two ways to fund some of these rising costs are a pretax Health Savings Account (HSA) or a Flexible Spending Account (FSA).

To set up an HSA, individuals must have a qualifying high-deductible health plan (HDHP). They control their HSA and may roll contributions over from year to year. To qualify in 2021, an HDHP must have a minimum deductible of $1,400 for individuals or $2,800 for families. The maximum limits for out-of-pocket costs are $7,000 for an individual or $14,000 for a family.

In 2021, workers with an HDHP can contribute $3,600 for themselves (plus $1,000 if they’re 55 or older) or $7,200 for their family. Once enrolled in Medicare Part A or B, individuals can no longer contribute pretax dollars to an HSA.

FSAs are owned by the employer; this means you may forfeit unused contributions if you leave your job. At year’s end, unused funds do not automatically carry over. Depending on the policy, an employee forfeits them, has a few-month grace period to use them, or is allowed to carry up to $550 (for 2021) into the next year. The maximum amount an employee can contribute in 2021 is $2,750.  Medicare recipientsmay contribute to their employers’ FSA.

Need help choosing the best health care options for your family? I’m happy to review these crucial elements of your financial plan with you.

1 https://www.cnbc.com/2020/11/02/5-things-to-watch-out-for-during-open-enrollment-amid-coronavirus.html

*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 3332238.1

Weekly Market Notes – November 9, 2020

For the Week of November 9, 2020

The Markets

Amid uncertainty surrounding the presidential election, U.S. stocks closed mostly flat Friday. But Wall Street saw its best weekly gains since April. For the week, the Dow rose 6.89 percent to close at 28,323.40. The S&P gained 7.36 percent to finish at 3,509.44, and the NASDAQ climbed 9.05 percent to end the week at 11,895.23.

Returns Through 11/06/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)6.891.135.508.8712.27
NASDAQ Composite (TR)9.0533.5942.8021.8319.54
S&P 500 (TR)7.3610.3316.2612.8313.08
Barclays US Agg Bond (TR)0.496.837.245.144.35
MSCI EAFE (TR)8.11-3.57-0.531.284.79
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Best Ever — The U.S. economy, expressed as an annualized result, rose a record 33.1 percent in the third quarter of 2020. The economy, as of Sept. 30, is actually only 7.41 percent larger than the size of the economy as of June 30 after removing the impact of inflation. A 7.41 percent gain occurring for four consecutive quarters, equals a 33.1 percent annualized advance (source: Department of Commerce, BTN Research).

The Most Paid — The maximum Social Security benefit paid to a worker retiring at full retirement age in 2021 is $3,148 per month, more than double the $1,536 per month maximum benefit paid in 2001 (source: Social Security BTN Research).

Not All Income — The maximum taxable wage base subject to the Social Security payroll tax will be $142,800 in calendar year 2021. An estimated 82.5 percent of earnings of all U.S. workers will be subject to the Social Security payroll tax next year, a levy that is 6.2 percent for employees and 6.2 percent for employers (source: 2020 Trustees Report, BTN Research).

WEEKLY FOCUS – Long Term Care Awareness

Since 2001, November has been designated Long Term Care Awareness Month, a time to educate Americans on the growing need for long term care (LTC) and potential ways to pay for it. The American Association for Long Term Care Insurance (AALTCI) estimates 14 million citizens currently require long term care support services and predicts that number will grow to 27 million by 2050.1

It’s no secret long term care can be very expensive. According to Genworth’s 2019 Cost of Care survey, the average monthly costs are $7,513 for a semi-private nursing home room, $4,051 for a one-bedroom assisted living apartment, and $4,385 for a homemaker/health aide (at 44 hours a week).Individuals pay for these expenses in a variety of ways.

Long term care insurance is usually most cost effective if purchased before turning 60. According to AALTCI, the average annual premium in 2020 for a healthy couple, both 55-years-old, is $3,050.3 Often more affordable, short-term insurance typically pays $100 to $200 a day for healthcare coverage for a year or less. The AALTCI reports an average monthly premium at age 65 is $105.4 These policies may be easier to obtain and have a short or no elimination period.

People who dislike the idea of paying premiums for something they may never use sometimes turn to an annuity with a long term care rider, a deferred fixed annuity (which doesn’t pay distributions until a certain age is reached), or a life insurance policy with an LTC rider or accelerated death benefit riders, which can be used for long term care.

Still other individuals prefer self-funding potential LTC needs. Considering the average nursing home stay is over two years, this option requires discipline and good fortune. Maximizing yearly contributions to HSA and IRA accounts can help.

While all of us hope we never need long term care, it’s best to plan for the unplanned. I would be happy to meet with you to review your plan for long term care funding and discuss changes you might consider to prepare for this possibility.  

1 https://www.aaltci.org/about/long-term-care-awareness-month-2020.php

2 https://www.genworth.com/aging-and-you/finances/cost-of-care.html

3 https://www.aaltci.org/news/long-term-care-insurance-association-news/2020-long-term-care-insurance-price-index-released-for-age-55

4 https://www.aaltci.org/short-term-care-insurance/

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3321975.1

Weekly Market Notes – November 2, 2020

For the Week of November 2, 2020

The Markets

Stocks fell sharply Friday, led by major tech shares. The S&P and the Dow saw their biggest weekly losses since the March sell-off. Rising coronavirus cases, stalled stimulus talks, and a looming presidential election troubled investors. For the week, the Dow fell 6.47 percent to close at 26,501.60. The S&P lost 5.62 percent to finish at 3,269.96, and the NASDAQ dropped 5.50 percent to end at 10,911.59.

Returns Through 10/30/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-6.47-5.380.346.7411.12
NASDAQ Composite (TR)-5.5022.5032.8418.7217.93
S&P 500 (TR)-5.622.779.7110.4211.71
Barclays US Agg Bond (TR)-0.046.326.195.064.08
MSCI EAFE (TR)-5.51-10.80-6.86-1.242.85
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Double in 30 Years — It took $1,961 in September 2020 to have the same purchasing power as $1,000 in September 1990 (source: CPI Inflation Calculator, Bureau of Labor Statistics, BTN Research).

No Boss — 20 percent of American workers between the ages of 18-49 are self-employed. 46 percent of American workers between the ages of 65-69 are self-employed (source: National Bureau of Economic Research, September 2019, BTN Research).


Little Short of Cash — 17.1 million U.S. households were behind on their monthly rental payment or their monthly mortgage payment as of Sept. 28. That’s 13.5 percent of the 126.8 million households in the country (source: Census Bureau, BTN Research).

WEEKLY FOCUS – Recognizing Family Caregivers

November has been named National Family Caregivers Month to honor parents, adult children, and spouses who selflessly care for loved ones afflicted with illnesses, disabilities, traumatic injuries, or the effects of aging. According to a study by the National Alliance for Caregiving and AARP, the number of family caregivers grew by 9.5 million from 2015 to 2020. As a result, one in five Americans are now serving as a family caregiver.1

As medical advances prolong lives and turn once-deadly conditions into disabilities, chances of becoming a caregiver for an older family member dramatically increase. Elder caregiving is often a rewarding act of service as well as a demanding sacrifice. In contrast to caring for children, care requirements for older adults can go from zero to 100 percent overnight. Unfortunately, few programs support those caring for the elderly who often juggle multiple responsibilities for which they may feel ill-equipped.

In addition to the mental and physical challenges, the caregiver’s finances may be impacted dramatically – particularly if the role requires them to reduce work hours or stop working entirely. They may lose employer-provided health care coverage, and their lost wages could in turn reduce their retirement savings and Social Security benefits. Middle-aged women who leave jobs to care for an aging parent may find it difficult to re-enter the workforce. Recent research suggests the average female caregiver loses more than $324,044 in wages and Social Security benefits when caregiving during her prime working years.2

Depending on the type and degree of the condition producing the need for care, a variety of solutions may lessen the burden on family members. An older individual might be able to live independently with the help of a visiting nurse, home health aide, or homemaker. A caregiver may be able to continue working if their relative is able to participate in an adult day care. But at some point, assisted living or long-term care may become unavoidable. 

Financial issues related to caring for a loved one can be complicated and difficult to predict. A financial professional can suggest things you can do now in order to be financially prepared should a loved one require care.

1 https://www.caregiving.org/caregiving-in-the-us-2020/2 https://www.marketwatch.com/story/the-heartbreaking-stories-of-some-of-americas-435-million-unpaid-adult-caregivers-2018-07-20

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3311989.1

Weekly Market Notes – October 26, 2020

For the Week of October 26, 2020

The Markets

Stocks ended a downbeat week mixed as investors followed officials’ comments on the status of another stimulus bill. Although unemployment benefits provided by the CARES Act ended July 31, the White House and lawmakers have not been able to agree on a new package. For the week, the Dow lost 0.90 percent to close at 28,335.57. The S&P dropped 0.51 percent to finish at 3,465.39, and the NASDAQ fell 1.06 percent to end the week at 11,548.28.

Returns Through 10/23/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-0.901.178.149.3112.64
NASDAQ Composite (TR)-1.0629.6443.5921.8419.38
S&P 500 (TR)-0.518.8817.5412.7313.06
Barclays US Agg Bond (TR)-0.426.366.725.114.02
MSCI EAFE (TR)0.11-5.60-0.230.753.96
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

It’s About Time — Americans have reduced their outstanding balances on their revolving debt, e.g., credit card debt and home equity loans, from March through and including August (source: Federal Reserve, BTN Research).

More Than Twice as Large — The U.S. government had a record $3.13 trillion deficit during fiscal year 2020, smashing the previous record deficit of $1.41 trillion set 11 years ago during fiscal year 2009. The deficit was the difference between $3.42 trillion of tax receipts and $6.55 trillion of outlays (source: Treasury Department, BTN Research).

Cashing In — The median sales price of an existing home sold in the United States in August ($310,600) is the highest ever recorded and is up 11 percent in the last 12 months (source: National Association of Realtors, BTN Research).

WEEKLY FOCUS – Future Retirees Face New Challenges

Preparing for retirement is more complex than it used to be for obvious and not-so-obvious reasons. The most obvious is longer lifespans. Thanks to improved medical care, a person retiring today in their mid-60s may need their savings to last 30 years. The list of less-obvious challenges includes:

Less support from employers. More companies have replaced their pension plans with defined contribution plans – putting added responsibility on the employee. The rise of gig workers and entrepreneurs leaves many without access to an employer-sponsored plan.

Shrinking Social Security. Social Security’s annual cost of living adjustment (COLA) averaged 7.7 percent from 1975 to 1984 – a rate that was higher than inflation. In contrast, COLAs for the last nine years ranged from 0.0 percent to 2.8 percent.1 COLAs are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which many note doesn’t adequately reflect the growth of some of the more costly expenses seniors encounter, such as health care, property taxes, home repairs, and homeowners insurance.

For example, the Social Security COLA for 2020 was 1.6 percent even though health insurance premiums were expected to go up by 5.6 percent in 2020.2 And Medicare premiums often increase faster than Social Security. As a result, part or all of a year’s COLA may be consumed paying for a retiree’s premium increase.  

Rising health care costs. It’s no secret health care costs have risen drastically in recent years. And the later years in life often account for the highest expenditures. According to the Fidelity Retiree Health Care Cost Estimate, an average retired, 65-year-old couple in 2020 may need $295,000 (after tax) to cover health care expenses in retirement.

Low inflation. While low inflation rates sound positive for individuals on fixed incomes, they also provide low earnings on money in savings and conservative investments like bonds and CDs. Purchasing a fixed annuity or bond (except for a Treasury Inflation Protected Security) while inflation is low may result in losing value if inflation rises. Retirees may need to take on some risk to increase earnings.

Planning for and managing retirement is complicated in every economic environment. Whether your retirement is imminent or in the distant future, give us a call. We’d be happy to help you create a personalized plan designed to meet your needs.

1https://www.ssa.gov/oact/cola/colaseries.html

2https://federalnewsnetwork.com/mike-causey-federal-report/2020/01/retiree-colas-vs-workers-pay-raise-why-the-difference/

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright October 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 3301216.1

Weekly Market Notes – October 19, 2020

For the Week of October 19, 2020

The Markets

Stocks were mixed on the final day of a volatile week. Encouraging reports on retail sales and consumer confidence lifted the major indices. The NASDAQ posted its fourth weekly gain. The S&P and Dow snapped three-day losing streaks to achieve their third positive weeks. For the week, the Dow rose 0.07 percent to close at 28,606.31. The S&P gained 0.21 percent to finish at 3,483.81, and the NASDAQ climbed 0.79 percent to end the week at 11,671.56.

Returns Through 10/16/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)0.072.098.4910.1613.42
NASDAQ Composite (TR)0.7931.0245.0522.0420.34
S&P 500 (TR)0.219.4518.7613.0413.65
Barclays US Agg Bond (TR)0.246.817.205.184.09
MSCI EAFE (TR)-1.45-5.700.510.584.11
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Big Numbers — The NASDAQ Composite was up 25.3 percent YTD (total return) through the close of trading on Sept. 30. The NASDAQ Composite has gained at least 20 percent in four of the last 11 years, i.e., 2009-2019. (source: NASDAQ, BTN Research).

Can’t Spend What We Don’t Have — Personal income (all pretax income created from employment and investments), declined 2.7 percent on a month-over-month basis from July to August, its fourth down month in the last six months. Personal income had declined on a month-over-month basis only five times in the previous decade (source: Department of Commerce, BTN Research).

Health Insurance — For workers who access their health insurance through an employer, the average annual cost for health insurance coverage for a family plan in 2020 is $20,514, with the employer paying 67 percent of the total ($13,717) and the employee paying 33 percent ($6,797) (source: U.S. Bureau of Labor Statistics, BTN Research).

WEEKLY FOCUS – National Estate Planning Awareness Week

October 19-25 has been named National Estate Planning Awareness Week, an observance that reminds the public how important estate planning is to financial wellness. Unfortunately, common myths convince many people they don’t need to create or update an estate plan, such as:

Only wealthy people need a plan. Without a will, state succession laws and the probate process decide who serves as the estate representative and where assets go. The probate process is publicand can take anywhere from a few months to a year or multiple years.

Proper estate planning considers tax liabilities. Yes, the federal estate tax exemption in 2020 is $11.58 million, thanks to the Tax Cuts and Jobs Act. However, the exemption is set to expire at the end of 2025.And despite this generous federal exemption, around a dozen states levy their own estate taxes (with a lower exemption than the federal), and six states collect an inheritance tax. The highest top rate among state estate taxes is 20 percent; the highest top rate among state inheritance taxes is 18 percent.

I already have a will. Estate plans are not meant to be “one-and-done” documents. They should be reviewed biennially, if not annually, and updated following a major life event (e.g., a birth, death, marriage, divorce, or move to another state). Beneficiary designations trump wills and should be revisited regularly. A complete plan should include a current list of all digital accounts with usernames, passwords, and security questions.

A will is enough. A thorough estate plan includes components designed to protect your income if you become disabled during your working years and protect your assets if you require costly long-term care as you age.It should also provide direction in the event you become unable to make decisions regarding your health and finances. Minimum documents include a Health Care Proxy (designates an individual to make decisions regarding medical treatments), an Advanced Care Directive (provides treatment instructions regarding prolonging life), and a Power of Attorney (names the person you wish to make financial decisions).

Estate planning can be complex. With so much at stake, it’s crucial to get it right. We are happy to work with you, your attorney, and tax professional to secure and make the most of your legacy. Securities America and its representatives do not provide legal or tax advice; consult with an attorney or accountant regarding your specific situation. 

*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright October 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3290367.1

Weekly Market Notes – October 12, 2020

For the Week of October 12, 2020

The Markets

U.S. stocks rose Friday amid renewed optimism over another stimulus package because of talks between House Democrats and the Trump administration. The S&P and NASDAQ had their best week since early July; the Dow had its best weekly gain since August. For the week, the Dow rose 3.31 percent to close at 28,586.90. The S&P gained 3.89 percent to finish at 3,477.14, and the NASDAQ climbed 4.57 percent to end the week at 11,579.94.

Returns Through 10/09/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)3.312.0211.1210.4513.58
NASDAQ Composite (TR)4.5729.9947.9221.9920.43
S&P 500 (TR)3.899.2221.3913.1613.81
Barclays US Agg Bond (TR)-0.176.556.315.224.12
MSCI EAFE (TR)2.98-4.315.501.564.47
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Being Careful — Since the beginning of 2020, the size of the money market fund industry in the U.S. (both taxable and tax-free) has grown from $3.63 trillion as of Jan. 1 to $4.40 trillion as of Sept. 30, a YTD increase of $770 billion or $20 billion a week (source: Investment Company Institute, BTN Research).

Maybe Never — 31 percent of 1,018 American workers surveyed in January anticipate they will retire at age 70 or later (source: Employee Benefit Research Institute – 2020 Retirement Confidence Survey, BTN Research).

Simpler — As a result of the expansion in the size of the standard deduction that was part of the 2017 Tax Cuts and Jobs Act, only 10 percent of tax filers itemized in 2018, down from 30 percent in 2017 (source: Tax Foundation, BTN Research).

WEEKLY FOCUS – Medicare Open Enrollment

Medicare’s annual open enrollment period begins October 15 and ends December 7. During this time, Medicare beneficiaries can change their drug plan or Advantage plan for the next calendar year. Supplemental Medigap plans, which have federally standardized benefits that don’t change from year to year, are not included in the fall enrollment.

Medicare Advantage Plans: Medicare Advantage Plans replace Original Medicare with HMO- or PPO-like plans. Because these plans are allowed to refile with Medicare each year, benefits and premiums can change from year to year.

Shortly before open enrollment begins, Advantage policy holders should receive an Annual Notice of Change (ANOC) from their provider. They should review the document carefully for changes to coverage, costs, or service area. Policy holders should also check to see if their preferred doctors, hospitals, pharmacies, or other providers are still in their plan. During Open Enrollment, beneficiaries may: change from Original Medicare (Parts A and B) to a Medicare Advantage plan or vice versa,* or switch to a different Medicare Advantage plan.  

Part D Plans: The company that provides a beneficiary’s current drug coverage will also send an ANOC, so beneficiaries can ensure all their medications are still covered by the plan. During Open Enrollment, beneficiaries may switch to a different Part D plan or enroll in Part D if they didn’t sign up during their general open enrollment period (a late enrollment fee may apply).

Also before Open Enrollment begins, insurers will provide an Evidence of Coverage (EOC), a comprehensive document explaining how the plan works and describing benefits, cost-sharing expenses, and what the plan pays. In addition to reviewing the ANOC or EOC, it is wise to compare other plans each year to see if another plan has become a better fit. The Medicare Plan Finder at medicare.gov/plan-compare/ is a convenient tool to use.     

Health care decisions can be complicated. If you need help evaluating your options or determining how health care costs may impact your retirement, please call our office.

*NOTE: A beneficiary who drops an Advantage plan to return to Original Medicare may be subject to underwriting if  they want to add a Medigap plan once they are past their original enrollment window or have been enrolled in Medicare Advantage for more than a year.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright October 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3279700.1

Weekly Market Notes – October 5, 2020

For the Week of October 5, 2020

The Markets

On Friday, the markets reacted negatively to the news that President Trump tested positive for the coronavirus, adding more uncertainty to the upcoming election. The major indices recovered some of the day’s losses after House Speaker Nancy Pelosi’s encouraging remarks about a potential agreement for another stimulus bill. For the week, the Dow rose 1.88 percent to close at 27,682.81. The S&P gained 1.54 percent to finish at 3,348.42, and the NASDAQ climbed 1.50 percent to end at 11,075.02.

Returns Through 10/02/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)1.88-1.258.729.6013.67
NASDAQ Composite (TR)1.5024.3143.6420.5919.97
S&P 500 (TR)1.545.1318.2011.9813.68
Barclays US Agg Bond (TR)-0.096.746.595.234.10
MSCI EAFE (TR)1.53-7.082.690.664.95
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Debt Limit — Legislation signed by President Trump in July 2019 suspended our country’s debt ceiling limit until July 31, 2021, so there is no statutory limit on our nation’s borrowing for the next 10 months. The debt ceiling has been raised, temporarily extended, or suspended 87 times since 1960 (source: Treasury Department, BTN Research).

Lots of People — 22 percent of Americans (74 million people) are on Medicaid, the nation’s health care program for low-income Americans that is jointly funded by the federal government and all 50 states (source: Medicaid, BTN Research).

Should We Get a Bite to Eat? — 12 percent of the sit-down restaurant chains (not fast food), that were in business before the COVID-19 pandemic hit the United States in February, are now out of business and have closed for good (source: Black Box Intelligence, BTN Research).

WEEKLY FOCUS – It’s Cybersecurity Awareness Month

The pandemic has made many of us especially grateful for the internet, which makes it possible to work from home, shop online, attend religious services virtually, and stay connected with family and friends. Unfortunately, enjoying all those conveniences is not without risks. Realizing Americans are distracted by the pandemic, the upcoming election, and social unrest, cyber criminals are upping their game. Here are a few ways we can protect ourselves from hacks, scams, and malware.

Look twice before you click. Crooks and spammers will try to get you to act quickly and automatically. Instead, pause to consider before opening any unexpected email attachment. And most importantly, NEVER click on a link in an email asking you to enter your password or change your password. Always go directly to the site you use to enter your password or call the company directly if there appears to be an actual problem.

Use strong passwords. Strong passwords are fairly long and use a combination of upper- and lower-case letters, numbers, and special characters. Using the first letters of an original phrase can make a password difficult for thieves to guess. Don’t keep a list of passwords anywhere near your device. If you keep a list, don’t spell out your phrase or word. Instead, record a hint, followed by the numbers and symbols in the password, ideally unique to each site. Another option is to consider purchasing a password managing system.

Add a second step. For sensitive sites, such as financial accounts, add two-factor identification. After signing in, the institution will either text, call, or email a one-time code.

Stay current. Google your name and delete old, unused accounts that come up. Clear your browser history periodically. Delete apps you no longer use. Use the latest security software, web browser, and operating systems. Regularly check for updates, or better yet, sign up for automatic updates when you can. Back up your data to the cloud.

Stay independent. When signing up for a new service or app, pass up the offer to sign in using Facebook or your Google account, which exposes the data in your accounts.

It is important to stay vigilant about securing your financial and personal information. We can help you develop a strategy to keep this information as secure as possible. Call us to discuss this or any other financial concerns you have.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright October 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3269073.1

Weekly Market Notes – September 28, 2020

For the Week of September 28, 2020

The Markets

It was a choppy week on Wall Street as investors weighed rising coronavirus cases, the upcoming presidential election, and uncertainty over another stimulus bill. Although stocks closed on a high note on Friday, the Dow and the S&P posted four-week losing streaks. But tech shares recovered some of their September declines, giving the NASDAQ its first weekly gain in four weeks. For the week, the Dow fell 1.75 percent to close at 27,173.96. The S&P lost 0.61 percent to finish at 3,298.46, and the NASDAQ gained 1.13 percent to end the week at 10,913.56.

Returns Through 9/25/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-1.75-3.073.189.3513.47
NASDAQ Composite (TR)1.1322.4836.4320.9119.73
S&P 500 (TR)-0.613.5312.6411.9013.58
Barclays US Agg Bond (TR)-0.096.837.435.144.26
MSCI EAFE (TR)-4.21-8.48-0.820.234.77
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

The Day the World Changed — The World Health Organization declared the COVID-19 outbreak a pandemic on March 11. In the six months from March 11 through Friday, Sept. 11, the S&P 500 had gained 23 percent (total return) (source: BTN Research).

Plan for Price Increases — As of Aug. 31, the consumer price index was up 19 percent over the last 10 years, up 50 percent over the last 20 years, and up 98 percent over the last 30 years. The consumer price index is a measure of inflation compiled by the U.S. Bureau of Labor Studies (source: Department of Labor, BTN Research).

Just Five Years — 55 of the last 60 fiscal years in our country have resulted in outlays exceeding receipts. The five surplus years were 1969, 1998, 1999, 2000, and 2001 (source: Office of Management and Budget, BTN Research).

WEEKLY FOCUS – Women’s Retirement Challenges

Although the pandemic has made financial disparities between men and women more pronounced, women have long faced greater challenges in retirement than men, for multiple reasons.

Longevity: On average, American women live five years longer than men. According to recent CDC data, males typically live to be 76, while women reach the age of 81. So while wives are frequently caregivers for their husbands, they may have no one to provide help when they need it. It’s no wonder women account for more than 70 percent of nursing home residents.1 In addition to potentially greater long-term care expenses, longer lives result in increased general healthcare costs.

Pay gap: According to the most recent Census data from 2018, women still earn 82 cents for every $1 their male counterparts earn. Multiple reasons account for the disparities; one significant factor is the types of careers many women traditionally pursue.

Savings gap: Clearly, it’s harder to save when you earn less. But women are typically primary caregivers for children and aging parents as well – creating employment gaps in their careers. This not only impacts their personal savings and career advancement, it also affects their Social Security benefits, which are based on a worker’s top 35 years of indexed earnings.

Dependency: According to Boston College’s Center for Retirement Research, 46 percent of married women in their 50s living in a two-income household are at risk of not being able to maintain their standard of living during retirement. Possible explanations are many two-income households spend more, and frequently, only one spouse is covered by a company retirement plan. Furthermore, a recent UBS survey reports 58 percent of high-net-worth married, divorced, or widowed women defer long-term financial decisions to their spouses or ex-spouses.2

COVID: Recent school and daycare closures impacted women harder than men. And social distancing particularly hits women, who often work in service industries, own small retail businesses, or work part-time (with fewer safety nets).

The good news is, an awareness of these challenges can drive women to gain knowledge, take control of their situation, and save and invest well. Whether you are a single or married woman, we’ll make sure you have the knowledge you need to address your unique challenges and plan for a more secure retirement. 

1https://www.investmentnews.com/long-term-care-womans-issue-192447

2https://www.forbes.com/sites/nextavenue/2019/07/10/the-women-facing-the-greatest-retirement-risk/#57443c5773fb

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright September 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3259197.1

Weekly Market Notes – September 21, 2020

For the Week of September 21, 2020

The Markets

The major stock indices fell Friday, contributing to their third straight weekly loss. Investors demonstrated concern over uncertainty about an additional round of stimulus legislation, new tensions with China, and steep declines of big tech stocks. For the week, the Dow fell 0.01 percent to close at 27,657.42. The S&P lost 0.60 percent to finish at 3,319.47, and the NASDAQ dropped 0.53 percent to end the week at 10,793.28.

Returns Through 9/18/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-0.01-1.354.349.9413.78
NASDAQ Composite (TR)-0.5321.1133.2819.9318.76
S&P 500 (TR)-0.604.1712.5312.0213.41
Barclays US Agg Bond (TR)-0.096.937.855.244.23
MSCI EAFE (TR)0.79-4.462.731.755.02
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Mostly Mortgage Debt — Total household debt in the United States was $14.27 trillion as of June 30, down slightly from the all-time record of $14.30 trillion set as of March 31. 69 percent of the $14.27 trillion household debt total ($9.78 trillion) is mortgage debt (source: Federal Reserve Bank of New York, BTN Research).

Some Relief — A maximum $2,500 of interest expense from student loans is deductible annually from taxable income. Consult a tax expert for details (source: Internal Revenue Service, BTN Research).

All Stocks — The total stock market capitalization of U.S. equities peaked at $36.1 trillion as of Feb. 19, fell to $23.4 trillion as of March 23, and has bounced back to $35.6 trillion as of Friday, Sept. 11 (source: Wilshire, BTN Research).

WEEKLY FOCUS – When You Inherit an IRA

When you lose a loved one, your first thoughts won’t be about what to do with their IRA. But if you’re a beneficiary, it is important to make wise decisions to avoid excess taxes and penalties. Due to changes to the beneficiary rules in the SECURE ACT, the following information applies to deaths on or after January 1 of this year.

Everyone: Any beneficiary can take all the account assets as a lump sum payment without incurring a 10 percent early withdrawal penalty. However, if it’s a traditional IRA, you’ll pay income taxes on the amount distributed, which might push you into a higher tax bracket. And if it’s a Roth IRA that is less than five years old, you’ll owe taxes on the earnings. If the benefactor was over the Required Minimum Distribution (RMD) age, you will need to determine whether the benefactor took their RMD for the year they died. If they didn’t, you must do so before the end of the calendar year or incur a 50 percent penalty on the RMD amount.

A surviving spouse: A surviving spouse has the most options.You can designate yourself as the owner of your spouse’s account, transfer the funds into your own IRA, or open an inherited (or stretch) IRA. With the latter, RMD amounts will be based on your age and be recalculated each year based on the factors in the IRS Single Life Expectancy Table.

Other eligible designated beneficiary: If you’re a minor, chronically ill, disabled, or less than 10 years younger than the deceased, you may open a stretch IRA described above. When minors reach the age of majority, the ten-year distribution rule applies.

Another relative or friend: If you don’t fall into the categories above and don’t choose to take a lump payment, you will need to create an inherited IRA account and transfer the funds. You won’t be allowed to make new contributions to the account. There are no annual required distributions, but you must withdraw all the money within 10 years.  

COVID exceptions: Because of COVID, all RMDs have been suspended for 2020. This waiver includes inherited accounts. Consult with your tax advisor regarding the impact of COVID-related legislation on the ten-year liquidation requirement.

This brief article doesn’t cover all the rules and options regarding inherited retirement accounts. But we would be happy to explain different possibilities and their ramifications, and work with your attorney and accountant to guide you through any decisions you may face. Consult your tax advisor regarding your own unique situation.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright September 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 3249384.1