Weekly Market Notes – October 14, 2019

Weekly_Market_Notes

For the Week of October 14, 2019

The Markets

Stocks ended higher Friday but lower than their session highs. On Thursday, President Trump announced a partial trade deal between China and the U.S. The positive news helped the S&P break a three-week losing streak. For the week, the Dow rose 2.37 percent to close at 26,816.59. The S&P gained 2.10 percent to finish at 2,970.27, and the NASDAQ climbed 2.35 percent to end the week at 8,057.04.

Returns Through 10/11/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 2.37 17.14 9.65 16.69 12.87
NASDAQ Composite (PR) 2.35 21.43 9.93 15.38 13.51
S&P 500 (TR) 2.10 20.38 11.12 13.88 11.55
Barclays US Agg Bond (TR) -0.91 8.23 10.50 3.04 3.12
MSCI EAFE (TR) 2.75 13.30 5.59 7.14 4.48

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 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. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

Health Insurance — The average annual cost for health insurance coverage for a family plan in 2019 is $20,576, with the employer paying 71 percent of the total ($14,561) and the employee paying 29 percent ($6,015). Ten years ago, the average cost was $13,375, and the employer/ employee split was 74/26 (source: Kaiser FF, BTN Research).

Counting All Stocks — Through the close of trading on Sept. 30, the market capitalization of all U.S. stocks was $32.3 trillion. At the start of the current bull market for stocks (an advance that began on March 10, 2009), the market capitalization of all U.S. stocks was $7.6 trillion (source: Wilshire, BTN Research).

Final Quarter of the Year — Over the last 25 years, the S&P 500 stock index has gained an average of 4.3 percent (total return) over the final three months of the year. Nineteen of the last 25 fourth quarters (76 percent) have produced a positive total return gain (Source: BTN Research).

 

WEEKLY FOCUS – Things to Know About Medicare Open Enrollment

If you’re 65 or older and eligible for Medicare, now is the time to do your homework. Open Enrollment, Oct. 15 through Dec. 7, is the time to enroll, correct mistakes made previously on Medicare elections or upgrade your 2020 coverage. The following tips can help.

Medicare doesn’t cover everything. It also has sizeable deductibles and copayments and doesn’t cover services you expect from many insurance plans. You can supplement your coverage with a Medicare Supplement Plan (also known as a Medigap Plan) that pays for deductibles and copayments on the original Medicare plan. You could also choose to upgrade to Medicare Advantage, which provides managed, integrated healthcare. Both have advantages and disadvantages, so it pays to research which is the best option for you.

If you were diagnosed in 2019 with a serious illness and prescribed new, expensive drugs, you might want to compare your Medicare Part D Prescription Drug Plan to some alternatives. You should also compare Medicare Prescription Drug Plans if you already take more than one prescription drug and watch for medications your plan may have dropped.

If you’re already in or are considering a Medicare Advantage Plan, take new health conditions into consideration. Make sure your plan’s network includes the type of specialists you need. Also, if you’ve been accepted into an assisted living facility, there are Medicare Advantage plans specifically designed for residents of these facilities.

If you were enrolled in either a Medicare Advantage Plan or Supplement plan in 2019 and the plan makes changes to the 2020 coverage, they must let you know about them in writing. Read any mail your provider sends carefully to see if copayments have increased or coverage has been reduced. Plans can also drop doctors, so make sure your current physicians are still covered.

It pays to do your homework before enrolling in a Medicare Plan. It’s also a good idea to review your financial situation. Call our office today. We can help you evaluate and make any changes to your financial plans and Medicare options to ensure the future you deserve.

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* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2773493.1

Weekly Market Notes – October 7, 2019

Weekly_Market_Notes

For the Week of October 7, 2019

The Markets

Stocks rose Friday following a September jobs report that hit the sweet spot. The Bureau of Labor reported 136,000 jobs were added – enough to dampen recession fears but not enough to diminish expectations of a rate cut when the Federal Reserve meets later this month. The Dow and S&P still fell for their third straight week. For the week, the Dow fell 0.88 percent to close at 26,573.72. The S&P lost 0.30 percent to finish at 2,952.01, and the NASDAQ climbed 0.54 percent to end the week at 7,982.47.

Returns Through 10/04/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.88 16.06 2.23 16.25 12.04
NASDAQ Composite (PR) 0.54 20.30 1.31 14.70 12.27
S&P 500 (TR) -0.30 19.59 3.83 13.39 10.70
Barclays US Agg Bond (TR) 0.81 9.35 12.00 3.30 3.46
MSCI EAFE (TR) -2.16 10.74 -1.57 5.76 3.50

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 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. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

Planning Ahead — 77 percent of private sector workers had access to and participated in employer-provided retirement benefits in March 2019. 91 percent of public sector workers, i.e., government workers, had access to and participated in employer-provided retirement benefits in March 2019 (source: Department of Labor, BTN Research).

Did You Know? — The Social Security retirement benefit of the lower paid spouse in a couple where both spouses worked is equal to the greater of the retirement benefit based upon the lower paid spouse’s work history or 50 percent of the higher paid spouse’s retirement benefit (source: Social Security, BTN Research).

It’s Time to Review — Medicare covers 59.9 million Americans, equal to two out of every 11 Americans. Medicare’s annual open-enrollment period starts Oct. 15 and runs through Dec. 7, allowing participants to make changes to their Medicare coverage. Plan options are available online on the medicare.gov website beginning Oct. 1 (source: Medicare, BTN Research).

 

WEEKLY FOCUS – October Is National Cybersecurity Awareness Month

We take our internet-based devices with us wherever we go. This constant connection has transformed our lives, but it also creates opportunities for cybersecurity threats that can compromise our important personal information. Since October is designated National Cybersecurity Awareness Month, here are a few steps to protect your identity:

Use Wi-Fi wisely. Change your home Wi-Fi password occasionally. If you need to share your Wi-Fi with guests, provide guest network access instead of sharing your password. Before using public Wi-Fi, verify the network name and exact login procedures, and avoid sensitive activities that require passwords or credit cards.

Don’t trust strangers. In public spaces, beware of individuals listening to conversations or viewing your screens. Don’t share specific personal information on social media – like your full name, address, birthday, mother’s maiden name or vacation plans. Disable location services that let anyone see where you are. Only shop secure sites that begin with https://.

Trust your suspicions. If an email doesn’t feel right – even if it says it’s from someone you know or a business you deal with – don’t respond and don’t click any links or attachments. When in doubt, contact the sender directly and ask if they sent it. NEVER click on an email link to reset a password.

Stay current. Google your name and delete old, unused accounts that come up. Use the latest security software, web browser and operating systems – sign up for automatic updates when you can. Back up data to the cloud or an external hard drive in case your device is stolen or compromised.

Keep tabs on your apps. Only download apps from trusted sources. Set your mobile device permissions to “rule of least privilege.”

Beef up your logins. Consider using a password phrase including spaces that’s unique to you. You might use the same phrase on different sites but add different symbols and numbers at the end. Consider adding two-factor identification.

To discuss more ways to secure your financial and personal information, call our office. We can help you develop a strategy to keep your information, and your finances, as secure as possible.

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* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2763443.1

Weekly Market Notes – September 30, 2019

Weekly_Market_Notes

For the Week of September 30, 2019

The Markets

The three major indexes slipped at the end of a tumultuous week, closing out their second week of losses. Negative sentiment stemmed from continued concern over the trade dispute between the world’s two largest economies and a whistleblower complaint that has led to an impeachment investigation of President Trump. For the week, the Dow fell 0.43 percent to close at 26,820.25. The S&P lost 0.98 percent to finish at 2,961.79, and the NASDAQ dropped 2.19 percent to end the week at 7,939.63.

Returns Through 9/27/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.43 17.08 3.91 16.47 12.11
NASDAQ Composite (PR) -2.19 19.66 -1.27 14.38 11.97
S&P 500 (TR) -0.98 19.94 3.73 13.36 10.61
Barclays US Agg Bond (TR) 0.37 8.47 10.27 2.84 3.38
MSCI EAFE (TR) -0.66 13.18 -1.62 6.70 3.23

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 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. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

Plan for Price Increases — As of Aug. 31, the consumer price index (CPI) was up 19 percent over the last 10 years, up 54 percent over the last 20 years, and up 106 percent over the last 30 years. The CPI is a measure of inflation compiled by the U.S. Bureau of Labor Studies (source: Department of Labor, BTN Research).

Really Long — In an effort to lock in historically low interest rates, the Treasury Department stated on Sept. 12 it is considering issuing a 50-year Treasury bond in 2020 (source: Steven Mnuchin, Treasury Secretary, BTN Research).

No Clear Consensus — As of Sept. 18, 35 percent of investors surveyed are bullish on the prospects for U.S. stocks over the next six months, 37 percent are neutral on stocks, and the remaining 28 percent are negative on stocks (source: American Association of Individual Investors, BTN Research).

 

WEEKLY FOCUS – Without Umbrella Coverage, Your Assets Could Be at Risk

You’ve worked hard to build up your nest egg. But what would happen if you were in an accident that left you liable for an amount above the limits of your homeowner’s or auto insurance? All your hard-earned assets could be gone over night.

To protect your savings, you may want to consider adding umbrella insurance to your homeowner’s and auto coverage. Also known as excess personal liability insurance, umbrella insurance provides an extra layer of security that will pay for a judgement or settlement if you’re found responsible and will cover your defense expenses, even if you’re not at fault. In addition to providing extra coverage for property damage and injuries, an umbrella policy may also protect you if you’re sued for libel, vandalism, slander or invasion of privacy.

If you own property or items that could cause an injury to someone else, such as a pool, a dog, a trampoline, a boat or a snowmobile, you should consider purchasing umbrella insurance. If you’re a landlord, serve on the board of a nonprofit, coach kids’ sports or volunteer, you could also benefit from the protection offered by an umbrella policy.

Umbrella insurance is typically sold in increments of $1 million. The price of a policy will vary by risk. Because the insurance only pays if a claim exceeds the liability limit of your homeowner’s or auto insurance, coverage is generally affordable. You could expect to pay around $200 per year for $1 million of coverage and another $100 for the next $1 million. For an additional $100 to $200, you can add excess uninsured or underinsured motorist coverage that covers you if you’re injured by another driver who doesn’t have enough coverage. For about $1,000 a year, you can tack on an endorsement that will provide additional protection from lawsuits if you serve as a volunteer on a nonprofit board.

To keep premiums low, it’s best to purchase your umbrella insurance from the same provider you purchase your home and auto insurance from. It’s common for an insurance carrier to require you to have $150,000-$250,000 in auto insurance and $250,000-$300,000 of homeowner’s coverage before you can purchase an umbrella plan.

If you would like to learn more about umbrella insurance and other ways you can protect your finances, call us today to schedule an appointment.

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* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2750346.1

 

Weekly Market Notes – September 23, 2019

Weekly_Market_Notes

For the Week of September 23, 2019

The Markets

Stocks fell Friday after a Chinese agriculture delegation cancelled a scheduled trip to Montana, reducing optimism about China-U.S. trade talks. As a result, all three indexes experienced their first weekly decline in a month despite the Fed’s decision earlier this week to lower rates for the second time this year. For the week, the Dow fell 1.04 percent to close at 26,935.07. The S&P lost 0.49 percent to finish at 2,992.07, and the NASDAQ dropped 0.72 percent to end the week at 8,117.67.

Returns Through 9/20/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -1.04 17.58 3.50 16.86 11.99
NASDAQ Composite (PR) -0.72 22.34 1.11 15.71 12.13
S&P 500 (TR) -0.49 21.13 4.19 14.10 10.53
Barclays US Agg Bond (TR) 0.88 8.07 10.11 2.95 3.35
MSCI EAFE (TR) -0.35 13.94 -0.57 7.34 2.91

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 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. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

They Do Not Last Forever — There have been 10 recessions in the United States since 1950, the most recent being an 18-month downturn that ended in June 2009. The average length of the 10 recessions since 1950 is 11 months (source: National Bureau of Economic Research, BTN Research).

Really Low — The unemployment rate in the U.S. was 3.7 percent in August 2019, the seventh consecutive month that the nation has reported a jobless rate of 3.8 percent or less. The U.S. has not had a jobless rate streak of 3.8 percent or less for that long of a period since December 1969 (source: Department of Labor, BTN Research).

Treasuries — The amount of outstanding Treasury debt issued by the U.S. has quadrupled since the end of 2004, rising from $3.95 trillion on Dec. 31, 2004, to $15.61 trillion as of June 30, 2019 (source: SIFMA, BTN Research).

 

WEEKLY FOCUS – One of the Greatest Threats to Security

We’ve all heard stories of people who have inherited a fortune or won the lottery and later found themselves deeply in debt. It’s hard to imagine how this occurs. But in most cases, it’s a result of lifestyle inflation. People who have more spend more. Ordinary folks whose incomes increase gradually are susceptible as well.

The first step to stopping lifestyle creep is to recognize how it endangers a secure retirement. In the immediate, the more you spend, the less you save. But because downgrading is difficult, you’ll likely spend more in the future to maintain your current lifestyle – which can make saving for retirement more challenging. Suppose you increase your monthly spending by $200. For an average 25-year retirement, you’ll need to add $60,000 to your retirement fund just to keep steady. (Take $2,400 a year x 25 years.)

So, instead of spending more when your income grows, save more. Focus on your long-term financial goals – rather than items that provide short-term satisfaction. It may help to keep extra money out of sight by transferring it to a less-accessible account, such as an IRA.

Of course, it’s important to enjoy life. But countless studies have shown investing in experiences brings deeper happiness than acquiring things. And, if you pay for them upfront, you won’t incur ongoing expenses that often accompany large purchases, like a bigger home or fancier car. Cultivate a taste for inexpensive pleasures. Make time for an extended dinner with good friends. Take a bike ride on local trails. Sign up for a cooking class. Read more. You’ll likely find it easier to experience joy in simpler pleasures if you hang out with friends who live modestly but richly.

Don’t buy into our culture’s obsession with material goods or equate success with possessions. You might choose to live in a down-to-earth neighborhood, where you and your family won’t be tempted to keep up with the Joneses, the Olsons and the Smiths. When you decide to upgrade, make gradual changes. If you’re ready to remodel, choose one room. If it’s time to replace furniture, pick one or two pieces at a time.

We can help you determine the amount you should save for retirement to maintain the same quality of life you have now. Contact our office today. The sooner you get started saving, the easier it will be.

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* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2740847.1

Weekly Market Notes – September 16, 2019

Weekly_Market_Notes

For the Week of September 16, 2019

The Markets

Stocks were mixed Friday, but the three major indexes rose for a third consecutive week amid encouraging economic news. Retail sales grew more than expected in August. Central banks took economic stimulus measures. President Trump agreed mid-week to delay an added increase in tariffs on Chinese goods, and Beijing added some agricultural products to its list of imports exempted from tariffs. For the week, the Dow rose 1.65 percent to close at 27,219.52. The S&P gained 1.02 percent to finish at 3,007.39, and the NASDAQ climbed 0.91 percent to end the week at 8,176.71.

Returns Through 9/13/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.65 18.83 6.65 17.40 12.61
NASDAQ Composite (PR) 0.91 23.23 2.03 16.62 12.35
S&P 500 (TR) 1.02 21.73 5.69 14.52 10.92
Barclays US Agg Bond (TR) -1.66 7.13 8.62 2.74 3.20
MSCI EAFE (TR) 1.99 14.34 2.48 7.56 2.98

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 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. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

Most of Them — The sales of existing homes account for 90 percent of all homes sales in the United States (source: Treasury Department, BTN Research).

How Did You Do? — An average single-family home in America increased in value by 5 percent over the one-year period from June 30, 2018, to June 30, 2019; by 5.9 percent per year over the last five years from June 30, 2014, to June 30, 2019; and by 3.6 percent per year over the last 10 years from June 30, 2009, to June 30, 2019 (source: Federal Housing Finance Agency, BTN Research).

The Most Paid — The maximum Social Security benefit paid to a worker retiring at full retirement age in 2019 was $2,861 per month, more than triple the $899 per month paid 30 years ago in 1989 (source: Social Security, BTN Research).

 

WEEKLY FOCUS – Don’t Underestimate These Retirement Expenses

Underestimated costs during retirement can be avoided by careful planning today. Consider these often-underestimated retirement expenses when planning for your future.

Healthcare: Healthcare can be expensive at any age, especially after retirement. One underestimated expense is long-term care (LTC). Roughly 70 percent of retirees will eventually need it – but Medicare doesn’t cover LTC, according to the Department of Health and Human Services. The average person who needs LTC requires it for about three years. At around $81,600 per year, that’s nearly a quarter of a million dollars – out of pocket. And even if you intend to age in place and never need LTC, you might still require home health services.

Housing: Speaking about aging in place, housing is another underestimated expense. Even if you own your home, the peripheral costs of home ownership continue into retirement. One-third of household spending by retiree-age owners is related to housing, including rent or mortgage; insurance and property taxes; renovations and repairs; and maintenance, including housekeeping, food preparation and lawn services.

Transportation: Retirement from your present career may eliminate long commutes, even the need to own a car. But contemporary retirees are much more active and involved than their predecessors. Transportation still plays a role as new careers, hobbies and lifestyles keep older generations vital and connected – and out of the house. It’s possible your transportation expenses will decrease, but perhaps not as much as you anticipated.

Taxes: Taxes are one of the few sure things in life before retirement. You can bet they’ll remain so after you retire. Before, you were taxed on the pay check you brought home from your employer. Now that you’re retired, you’ll be taxed on the “pay check” you bring home – from yourself. Some of your income, like payouts from your 401k or traditional IRA accounts, will be taxed. Your Social Security benefits may also be subject if you have substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) or if you live in certain states. If you own a home, you’ll still be responsible for taxes assigned to it.

Retirement should be a rewarding part of life. Call our office today; we can make sure your financial plan provides you a path to the future you envision.

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* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2731634.1

Weekly Market Notes – September 9, 2019

Weekly_Market_Notes

For the Week of September 9, 2019

The Markets

Stocks rose Friday as investors hoped for another rate cut from the Federal Reserve following a weaker-than-expected jobs report. According to the Labor Department, nonfarm jobs rose by 130,000 last month, compared to 164,000 in July. For the week, the Dow rose 1.53 percent to close at 26,797.46. The S&P gained 1.83 percent to finish at 2,978.71, and the NASDAQ climbed 1.76 percent to end the week at 8,103.07.

Returns Through 9/06/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 1.53 16.90 5.56 15.79 12.06
NASDAQ Composite (PR) 1.76 22.12 2.28 15.38 12.07
S&P 500 (TR) 1.83 20.50 5.62 13.11 10.46
Barclays US Agg Bond (TR) -0.15 8.93 10.12 2.99 3.41
MSCI EAFE (TR) 2.23 12.11 1.31 5.77 2.32

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 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. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

 

 

It Will Happen at Some Point — 40 percent of 226 economists surveyed in July 2019 believe the United States will fall into a recession by the end of 2020, while the remaining 60 percent believe our nation’s next recession will begin in 2021 or later (source: BTN Research, National Association for Business Economics).

Maintaining Purchasing Power — A 65-year-old spending $100,000 per year (after-tax) would need $128,008 per year (after-tax) by age 75 and $163,862 per year (after-tax) by age 85 if their cost of living increased by 2.5 percent per year due to inflation (source: BTN Research).

Most Ever — Mortgage debt in the U.S. peaked at $9.29 trillion as of Sept. 30, 2008, fell 16 percent to $7.84 trillion by June 30, 2013, and now has climbed all the way back to a new record level of $9.41 trillion as of June 30, 2019 (source: Federal Reserve Bank of New York, BTN Research).

 

WEEKLY FOCUS – Hope for the Best, Prepare for the Worst

None of us wants to contemplate a natural disaster striking our homes or communities. But as Hurricane Dorian sadly reminds us, hurricanes, tornados, earthquakes, floods and fires do happen. Taking these simple steps to prepare for tragic events can lessen their toll:

If you receive Social Security or other regular checks, switch to direct deposit in case mail service is affected. If you don’t have an emergency fund, save $1,000 immediately and build your fund until it could cover three to six months’ worth of living expenses. Keep it in a liquid account. And in case power outages make bank accounts immediately inaccessible, securely store $200 – $300 in cash in your home.

Make a list of possessions inside and outside your home. Include videos that zoom in on serial numbers and brand names. Update the list yearly and store it in a safe place and online, ideally on a cloud-based platform. Collect copies of important papers like deeds, birth certificates, emergency contacts, financial and medical papers and a list of creditors in a water- and fire-proof box at home, along with a key to a safe deposit box in which originals are kept.

Review your insurance policies – homeowners, auto, life, health and disability – to see what is covered, what the deductibles are and how much they pay. For instance, many basic homeowners’ policies do not cover floods. If you’re in an area where floods are a concern, you may need separate flood insurance. Make sure policies are updated for inflation and recent acquisitions. Ensure any tools or property you need for your profession are covered.

Know what to do when a disaster strikes. Once you and your loved ones are safe, one of the first steps is to document your damage, e.g., take a 360-degree video of each area affected. Providing complete information can help your claim process more quickly. If you’re unable to make loan payments, contact your creditors to let them know as soon as possible. In addition to contacting local or state response agencies, you may ask DisasterAssistance.gov, the Federal Emergency Management Agency or Disaster Loan Assistance from the Small Business Administration for help.

Don’t wait until disaster hits. Call our office today. We can help you come up with a practical pre-disaster checklist.

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* 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 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2722120.1

Weekly Market Notes – August 26, 2019

Weekly_Market_Notes

For the Week of August 26, 2019

The Markets

Stocks tumbled Friday after the President tweeted orders for all U.S. manufacturers to find alternatives to their operations in China. China also announced it would impose tariffs on more American goods in response to the Trump administration’s levies scheduled to go into effect Sept. 1. For the week, the Dow fell 0.98 percent to close at 25,628.90. The S&P lost 1.42 percent to finish at 2,847.11, and the NASDAQ dropped 1.83 percent to end the week at 7.751.77.

Returns Through 8/23/19 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.98 11.64 2.28 14.04 11.23
NASDAQ Composite (PR) -1.83 16.83 -1.61 13.81 11.30
S&P 500 (TR) -1.42 15.08 1.69 11.41 9.67
Barclays US Agg Bond (TR) 0.08 8.87 9.78 3.00 3.38
MSCI EAFE (TR) 0.86 8.68 -3.37 5.07 1.83

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 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. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

 

Not a Penny — 44.4 percent of U.S. individual tax filers (76.4 million out of 172.0 million) did not pay any federal income tax in tax year 2018, i.e., four out of every nine tax units in the United States (source: Tax Policy Center, BTN Research).

Not the U.S.A. — There are 10 countries in the world that maintain the top credit rating from each of the three major credit rating agencies, including Canada, Germany and Sweden (source: Trading Economics, BTN Research).

Up the Cost — China has increased the tariff applied to imports coming into its country from the U.S. by an average of 12.4 percent since May 2018 (source: Peterson Institute, BTN Research).

 

WEEKLY FOCUS – When You Inherit a 401(k)

Today’s article looks at actions you can take when you inherit a 401(k) besides taking a lump sum and paying taxes on the full amount.

If you were married to the deceased, you have the option to roll your late spouse’s 401(k) into your own 401(k) – if your plan allows you to. As long as you’re working, you won’t have to take required minimum distributions (RMDs) from your 401(k). You can also roll it into your existing IRA account. If you are younger than 70½, you won’t need to take RMDs on the inherited funds in your IRA even if your spouse was over 70½. But if you are under 59½, any early withdrawals you take will incur a 10 percent penalty tax.

In either case, ask your spouse’s employer to transfer the funds directly. If you receive a check instead, your spouse’s employer will withhold 20 percent of the balance for the IRS. And if you don’t deposit the check in your IRA or 401(k) within 60 days, the whole amount will be taxed.

Regardless of your relationship to the deceased, you may be able to leave the funds in their employer’s plan, which may offer lower-cost investment options. Some plans even allow periodic payments, especially if the account holder was receiving such payments. Each 401(k) plan has its own rules. To limit administrative resources, many plans require a lump-sum distribution or limit the amount of time you can keep funds in a deceased family member’s plan. RMDs must continue if the deceased had started taking them or must start the year the employee would have turned 70½.

The other option is to roll the funds into an Inherited IRA (keeping it separate from any other IRA). If the account holder was over 70½, you can take annual distributions over your lifetime starting by Dec. 31st of the year following the deceased’s death. If they were under 70½, you can choose lifetime withdrawals or a five-year withdrawal. If the SECURE Act (a retirement bill currently in the Senate) passes, non-spouse beneficiaries will need to withdraw money from an inherited retirement account within 10 years.

The rules concerning 401(k)s, IRAs and rollovers are complicated. We can work with your trusted advisors to help you make wise decisions regarding an inherited retirement account or make sure your own estate plan thoughtfully addresses your retirement accounts. Consult your tax advisor regarding your own unique situation.

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* 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 August 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2701862.1