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U.S. Performance Dashboard – February 2022

By | March 2nd, 2022|Markets|

  • U.S. equities faced a challenging February, with escalating geopolitical concerns including Russia’s invasion of Ukraine along with uncertainty over the Fed’s rate hike trajectory resulting in the S&P 500® briefly trading in official correction territory.  Smaller-caps outperformed, with the S&P MidCap 400® and S&P SmallCap 600® both up 1%.
  • International performance was also disappointing, with the S&P Developed Ex-U.S. BMI down 1% and the S&P Emerging BMI down 3%, as swings in oil prices amid Ukraine-Russia tensions roiled markets.
  • High Beta was the only factor to post a gain, with Growth in the rear.
dashboard-us-2022-02

Thinking about Social Security? Let’s talk options.

By | February 17th, 2022|General, Retirement|

When to claim social security benefits is one of the biggest questions when thinking about retiring. Your retirement income will likely come from various sources, and each will fit into your financial plan in different ways. Still, for most people, social security represents a risk-free source of retirement income. How do you maximize that income? It’s a delicate balance.

Social Security Basics

You can receive social security if you are age 62 or older and have enough work credits. You are eligible if you have 40 quarters of work history. The amount you receive is based on your lifetime earnings. Social security calculates your benefit using the 35 years you earned the most. The calculation will include zeros if you don’t have 35 years of work history. You can find out if you’ve already qualified by going to www.ssa.gov. You can set up an account, get estimates of your benefits, and review your work history to ensure it’s correct.

The Social Security Administration (SSA) defines retirement benefits as Early, Full and Late. The SSA’s goal is to make social security flexible enough to work for people in different situations and be as equal as possible. Full retirement age is the benchmark for benefits. If you retire before full retirement age, monthly benefits will be lower to equalize the longer amount of time they will be paid out.  People who delay retirement receive higher monthly benefits.

Early retirement begins at age 62. Social security has a formula to reduce your benefits if you claim early retirement. It depends on how many months you claim before your full retirement age. For example, someone with a full retirement age of 67 who retires at 62 will see benefits reduced by 30% for the entire time they claim benefits.

Full retirement age (FRA) depends on your birth year. For most people, it’s somewhere between 65-67. This is the age at which you qualify for full benefits.

Late retirement kicks in after your FRA and extends to age 70. For every year that you delay benefits after your FRA, you get an 8% increase in your benefits for life.

The Spousal Option

When it comes to claiming social security, it’s not always just about your working life. Claims may be made on personal work history or a spouse’s work record. If the marriage lasted at least ten years, a claim can also be made on an ex-spouse’s work record. The spousal benefit amount can be up to 50% of the higher earner’s benefits. The same rules on retirement age apply.

The spousal option also applies to surviving spouses, but the eligibility age is reduced to 60. Reduced benefits will still apply.

Claiming Strategies for Married Couples

The decision of when to claim is unique to everyone and should be made by thinking through other sources of income, level of health, family history, and overall retirement goals. Delaying the claim will result in higher monthly payments, but it shouldn’t be the only consideration.

It’s a bit more complicated for married couples as each will likely have a different FRA and a different benefit amount. Making use of these differences to maximize the benefit can make sense. For example, claiming early or at FRA for the lower-earning spouse and delaying the higher-earning spouse’s benefits can result in significantly more income.

Taxes on Social Security Income

Depending on the tax status of other retirement income, up to 85% of social security benefits can be taxable. Income from pensions, interest, dividends, withdrawals from tax-deferred accounts, and other sources of income can all create a tax liability on social security income.

How you structure your overall retirement plan can help avoid these taxes. Whether taxable, tax-deferred, or tax-free, the types of accounts that assets are held in can create a more flexible income stream. Using a Roth conversion to avoid required minimum distributions is another strategy that can be deployed to keep income lower.

The Bottom Line

Social security is a benefit not only in the income it provides – which can add up to more than $1 million over retirement for a couple that claims at FRA – but it can also be a source of guaranteed income that can anchor an investment plan.

Looking at all your assets, understanding your risk tolerance, and having a sense of your goals and how you want to achieve them can help you make the right decision when it comes to claiming the benefits you worked for over the years.

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U.S. Performance Dashboard – January 2022

By | February 1st, 2022|Markets|

  • Anxiety about impending rate hikes as well as a tapering in asset purchases by the Fed to combat inflation led to the worst monthly performance for U.S. equities since March 2020, with the S&P 500® down 5% in January. Smaller caps performed even worse.
  • International performance was also disappointing, with the S&P Developed Ex-U.S. BMI down 5%. The S&P Emerging BMI, down 1%, fared slightly better, aided by strong performance in Latin America, although headwinds included Ukraine-Russia tensions as well as the Fed’s hawkish stance.
  • Given the risk-off sentiment, Dividend and Value strategies led. Growth was the laggard, down 8%.
January 2022 Market Update

Quarterly Market Review – Q4 2021

By | January 10th, 2022|Dimensional Fund Advisors, Markets, Quarterly Market Review|

This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.

The report also illustrates the impact of globally diversified portfolios and features a quarterly topic. “All-Time High Anxiety”.

Click HERE  to download a full copy of the report.

Q4 quarterly-market-review

U.S. Performance Dashboard – December 2021

By | January 10th, 2022|General, Markets|

  • Despite the ongoing pandemic, record inflation, and looming rate hikes, U.S. equities had a banner year, with the S&P 500® reaching 70 closing highs on its way to a 29% return. Mega-caps outperformed, with the S&P 500 Top 50 up 31%.
  • International performance was positive, with the S&P Developed Ex-U.S. BMI up 11%. Emerging markets managed to eke out a gain, with the S&P Emerging BMI up 1% despite large losses in the S&P China BMI, which makes up almost 40% of the benchmark’s weight.
  • All sectors posted gains in 2021, led by Energy, up a dramatic 55%, a stunning turnaround after its 34% loss in 2020.

 

December 2021 Market Review

U.S. Performance Dashboard – November 2021

By | December 1st, 2021|Markets, Quarterly Market Review|

  • It was not entirely smooth sailing for U.S. equities in November, as concerns about the Omicron strain coupled with less-than-transitory inflation and accelerated tapering by the Fed roiled markets during the last three days of the month. The S&P 500® posted a loss of 1%, outperforming mid and small caps, as the S&P MidCap 400® and S&P SmallCap 600® declined 3% and 2%, respectively. Volatility spiked, as the VIX® closed at 27.19.
  • Growth led among factors, followed by a number of defensive strategies, including Quality, Low Volatility, and Dividend Aristocrats.
  • Among sectors, IT led, followed by Consumer Discretionary, while Financials lagged.

 

dashboard-us-2021-11

On the Mind of Investors : November 7th, Weekly Recap

By | November 16th, 2021|Markets|

  • U.S job openings fall to 10.4M
  • PPI for final demand +0.6% in Oct.

What to watch in the week ahead: Retail Sales.

Inflation has heated up significantly this year as surging consumer demand collided with supply shortages across major sectors of the economy. CPI inflation has been tracking above 5% year-over-year since the start of the summer, with the latest year-over-year gain in CPI at 5.2% overall and 4.0% excluding food and energy. The year-over-year gains in inflation have been amplified by declines in prices a year ago, but supply chain issues have been a problem. In particular, the global semiconductor shortage has increased the prices of a wide range of goods throughout the economy, and most notably for autos. These higher input costs have sent inflation higher, as well as a general recovery in prices of air fares, restaurants, and rents from their pandemic lows.

 

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U.S. Performance Dashboard – October 2021

By | November 2nd, 2021|Markets|

  • Despite lingering inflation concerns, U.S. equities recovered strongly in October, thanks to robust corporate earnings. The S&P 500® posted a gain of 7%, outperforming mid- and small-caps, as the S&P MidCap 400® and the S&P SmallCap 600® rose 6% and 3%, respectively. Volatility declined, as the VIX® closed at 16.26.
  • All factors posted gains, with Growth and High Beta in the lead. Unsurprisingly, defensive factors trailed in October.
  • All sectors posted gains. Consumer Discretionary led, followed by Energy, which continued its dramatic turnaround, up 58% year-to-date.
dashboard-us-2021-10

October : National Cyber Security Awareness Month – Tips for Protecting Yourself

By | October 21st, 2021|General|

National Cyber Security Awareness Month is observed each October and is designed to increase the public’s awareness of cybersecurity and cyber-crime issues.

To help you protect your personal information, we are sharing content from the American Bankers Association’s brochure “7 Tips for Protecting Yourself Online.” According to Symantec, 12 adults become a victim of cybercrime every second. Though the internet has many advantages, it can also make users vulnerable to fraud.

To help protect yourself we recommend you follow a few easy steps:

  • Keep your computers and mobile devices up to date.  Having the latest security software, web browser, and operating system are the best defenses against viruses, malware, and other online threats. Turn on automatic updates so you receive the newest fixes as they become available.
  • Set strong passwords. A strong password is at least eight characters in length and includes a mix of upper and lowercase letters, numbers, and special characters.
  • Watch out for phishing scams. Phishing scams use fraudulent emails and websites to trick users into disclosing private account or login information. Do not click on links or open any attachments or pop-up screens from sources you are not familiar with.
    • Forward phishing emails to the Federal Trade Commission (FTC) at spam@uce.gov – and to the company, bank, or organization impersonated in the email.
  • Keep personal information personal. Hackers can use social media profiles to figure out your passwords and answer those security questions in the password reset tools. Lock down your privacy settings and avoid posting things like birthdays, addresses, mother’s maiden name, etc.  Be wary of requests to connect from people you do not know.
  • Secure your internet connection. Always protect your home wireless network with a password. When connecting to public Wi-Fi networks, be cautious about what information you are sending over it.
  • Shop safely. Before shopping online, make sure the website uses secure technology. When you are at the checkout screen, verify that the web address begins with https. Also, check to see if a tiny locked padlock symbol appears on the page.
  • Read the site’s privacy policies. Though long and complex, privacy policies tell you how the site protects the personal information it collects. If you don’t see or understand a site’s privacy policy, consider doing business elsewhere.

A few more best practices we would like to share may seem very basic, but each could help keep your personal information safe.

  • Do not leave devices unattended. We suggest always locking or closing personal devices before walking away from your screen.
  • Avoid emailing sensitive information such as credit card numbers or account numbers. Always ask the person you are emailing if they have a secure portal to provide those details.
  • Back up your data regularly. Set a monthly reminder to back up your personal devices.
  • Do not store personal information on mobile devices. It can be tempting to save a quick note in your phone of a password that you will want to reference easily, avoid doing that and instead use a third party password management tool.
  • Do not turn off a Two-Factor or Multi-Factor Authentication service. Some vendors will allow for you to turn that functionally off or suspend the service when you log – in. We recommend keeping it active whenever you can.
  • Use the passcode lock on your smartphone and other personal devices. This will make it more difficult for thieves to access your information if your device is lost or stolen.

By following these tips, you can help protect your personal information from getting in the wrong hands.

For more information, please check out this additional resource:

https://www.cisa.gov/cybersecurity-awareness-month

Quarterly Market Review – Q3 2021

By | October 6th, 2021|Dimensional Fund Advisors, Markets, Quarterly Market Review|

This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.

The report also illustrates the impact of globally diversified portfolios and features a quarterly topic ,”The 50-Year Battle for a Better Way to Invest.

Click HERE to download a copy of the report. 

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