economy, income, interest rates, retirement

Bond Yields are Moving Higher

On October 3rd, 2018 the 10-year yield moved dramatically higher increasing 3.3% in a single day. Pundits have listed many reasons for rates and bond yields to move higher… a strengthening economy, decreasing unemployment, rising oil prices signaling inflation, a Federal Reserve committed to further rate increases into 2019. (3)

 

These pressures have been building for some time and signal a good economic environment.

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economy, income, interest rates, retirement

Fed raises rates, and questions, around the economy

On June 13th, 2018 the federal reserve raised interest rates 25 basis points and altered their expectation to raise rates a total of 4 times this year, compared to earlier expectation of 3 raises.

 

In his meeting with reporters to discuss fed policy, fed chair Powell stated, “Households are in good shape, and that is so important, that’s where we got into trouble before, and its often around property and housing that you see real problems emerge but we don’t see that now, and we take some solace from that.”

 

However, he also said, “Economic strength hasn’t reached everyone.”

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economy, income, retirement

How Can Student Loan Debt Threaten Your Retirement?

I recently talked to a client who is 50 years old and has $75,000 in student loan debt that they do not seem to be making any headway to eliminate. It illustrates a huge issue many people are facing as they approach retirement.

 

In 2018 student loan debt totaled $1.5 trillion… Student loans are unique in terms of unsecured debt in that the government can take extreme measures to recover defaulted student loans, including seizure of tax refunds and garnishment of wages. (1)(4)

 

In addition, the government can also garnish up to 15% of a person’s social security check to pay back defaulted student loans. For most American’s Social Security makes up the bulk of their retirement income. Loss of part of the income can have a catastrophic effect on a house hold.

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Climate change, environment, income, retirement

Climate Change, Sea Level Rise and Retirement Risk

One of the oft repeated risks from climate change is the threat that comes from rising sea levels. Depending on the forecast, even in the most optimistic ones, seas are projected to rise several feet before the end of the century. With the accelerating build-up of CO2 and the rate of temperature increase (2016 being the hottest year on record), many expect dramatic sea level rise to occur much sooner than most expect. (https://www.co2.earth/ )

 

While people might want to buy shore property for benefits that include potential rental income, capital appreciation and personal use, they also face potential risks of hurricanes, sea level rise, etc. Some of these risks can be mitigated by purchasing flood insurance.

 

Last summer I explored the question, “if sea levels rise, what will be the impact on a clients’ net worth and portfolio?”

 

The answer is one few people are willing to confront.

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economy, interest rates, retirement

Psychology and the Market

On Thursday February 8th 2018 the Dow dropped over 1000 points in a single day.

 

Human behavior is driven two forces, fight or flight. When facing a dramatic event we as individuals are forced to REACT to what happens. 

When looking at the market, if a person is underinvested and it goes up day after day making new highs, that person may experience FOMO… fear of missing out. They might make the decision to invest based on emotion instead of fundamentals.
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economy, income, retirement

First Steps to Retirement Planning

Many people are paralyzed into inaction when they start thinking about the challenge of planning for retirement. The truth is there are a few first steps anyone can take on their own to improve their chances for success.

A first step is to determine how much income you can expect to receive from social security. In years past SSA would mail annual statements for people to see their expected benefits. Things have changed… go to google and search for “my social security”. You will create an account and through this account be able to determine your numbers.

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Climate change, economy, retirement

Rising Seas and the Risk to Retirees

 

Florida has always been considered a favorite retirement destination. The warmer climate attracting older American’s who have health issues ranging from Asthma to Arthritis, from Heart Disease to Parkinson’s. 20% of Florida’s population is over age 65 (compared to only 15% in New Jersey).

 

An additional challenge facing retirees in both Florida and New Jersey is climate change risk due to rising seas, storm surge and the potential loss of property in coastal communities.

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economy, retirement

Trick or Treat? The Potential Downside of Tax Reform for Investors

 

There is an old story that goes “beware what you wish for…” Things don’t always turn out as expected.

 

Along those lines I watched a fascinating interview of Tom Lee, head of research at Fundstrat, on Bloomberg this morning.

 

His feeling is that a Tax cut, as it is currently being discussed, could be negative for investors. “There’s two reasons; First, when cutting tax rate you raise the after tax cost of debt. Leverage becomes a problem for a lot of businesses. Second, because you are cutting tax rates you are effectively giving cash to all businesses, even businesses where you want to reduce allocation.“

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life insurance, protection

How will your family survive?

 

My son was born when I was 30 years old. Honestly, I didn’t get life insurance until I was 36. I had never been taught the importance of using Life Insurance to manage risk and protect your family. Recent studies show that I’m not alone. There is a huge gap in the level of financial literacy in the United States.

 

According to a recent study by LIMRA;

  • Among households with children under 18, 4 in 10 say they would suffer immediate financial trouble if a primary wage earner died today.
  • Another 3 in 10 would have trouble keeping up with basic living expenses after several months.
  • Overall, 7 in 10 of all households said they would have trouble covering everyday living expenses after several months if the primary wage earner died.

 

To be clear 37 million households have no life insurance… none…

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