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INSIDE THIS EDITION:
The Market Is Upset, and It’s Not About Earnings
The State of Merger and Acquisition Activity
Weekly Technical Comment
Social Security Awareness Month: Five Pointers to Consider
401k Plan Manager
There appear to be several things weighing on the market, but it isn’t this earnings season, closely followed trader Art Cashin told CNBC on Tuesday.
“We’re maybe one-third of the way thru earning season and 83 percent of companies that have reported have easily beaten the estimates. And yet the averages are below where they were when earnings season started. So it’s something other than earnings that has the market very upset here”.
When the Trump administration announced tariffs on the import of steel and aluminum many believed that it would signal the beginning of a trade war with China. Since that initial announcement, there have been several additional moves by both Washington and Beijing on the trade front that stand to alter the balance of trade for the foreseeable future.
Dow Industrials Clear 50-Day Line
Stocks are opening the new week on a positive note. Our first chart this week shows the Dow Industrials clearing their 50-day average by the widest margin since late February. It’s also clearing a down trendline line drawn over its January, February, and March highs.
At STA Wealth, many of our clients are owners of small and closely held businesses. For those clients, we believe it is very important that their financial plan incorporates their ultimate Business Succession Plan and/or Exit Strategy. For many business owners, their business is one of their largest assets. To help assure that they and their families maximize the value for their business, at STA Wealth we believe that that they need to understand the Five Key Elements of a Succession Plan or Exit Strategy.
In the December/January 2017-18 edition of their Forum Newsletter, the Houston CPA Society highlighted one of my articles on Business Succession Planning. Scott is also a former Director of the Houston CPA Society and has served several times as the head of its Personal Financial Planning and has served on its Investment Committee. He was also named Young CPA of the Year by Houston CPA Society in 2002-3.
If you would like to see a copy of the article, please follow this link: Leaving Your Legacy: Business Succession Planning.
In April, we celebrate National Social Security Awareness Month – a month dedicated by the Social Security Administration to educate the public about knowing and maximizing their Social Security Benefits. As Social Security is also an important Retirement Benefit, we also talk about it extensively in our Retirement Survival Guide.
I just participated in a recent webinar presented by Laurence Kotlikoff, an economics profession at Boston University, in which he offered several pointers to the audience on Tips to consider when filing for Social Security.
At STA Wealth, we have been talking for years about how best to maximize your Social Security Benefits – see:
As financial planners, our advisors at STA Wealth have a broad understanding of how to advise our clients on maximizing their Social Security benefits – and the answer varies depending on each of our clients own personal circumstances.
Per Mr. Kotlikoff, this had become even more difficult due to recent changes to the file-and-suspend benefit rules of Social Security, which take effect this year and restrict that benefit to a limited number of couples. (The spouse who files and suspends must be 66 years old as of May 1, 2016, and submit his or her request to file and suspend by April 29. The other spouse, who will receive that spouse’s benefit, must be 62 years old as of Jan. 1 of this year.) It’s also because Social Security is complicated, and even the workers at the Social Security Administration may not fully understand it.
With that in Mind, Mr. Kotlikoff has these five pointers to consider before you file for your Social Security Benefits:
Therefore, you need to know the rules yourself. “People in Social Security offices don’t seem to understand the new law,” said Kotlikoff, who’s also author of “Get What’s Yours — the Secrets to Maxing Out Your Social Security Benefits.” He then recounted stories of several retirees who were given erroneous information by their Social Security office. We have seen the same issues with our clients here at STA Wealth. So before you apply for benefits have your game plan on how best to maximize your Social Security given your needs and situation:
At STA Wealth, we have software to help you maximize your benefits and there are also online tools at www.ssa.gov.
As discussed above, Retirees need to have the right information about their benefits — which we can provide at STA Wealth — and then tell Social Security what they want to do, preferably in writing. They should not ask Social Security workers questions about their benefits and expect to get the right answer, says Kotlikoff.
Mr. Kotlikoff recommends that retirees specify in writing in the remarks section of their application what they want to do, such as claim spousal benefits, and be definitive and clear. “The application form can be misleading,” said Kotlikoff. It says on top that you’re filing for all available benefits even when you’re not always doing that. You can’t undo that statement. The only place to specify … [what you want to do] is in the remarks section.
If someone wants a spousal benefit and the spouse has already applied to file and suspend and won’t take benefits sooner than his or her 70th birthday, “that has to be in writing … definitive and clear,” said Kotlikoff.
For most of my career, I have recommended that clients should schedule an appointment in their local Social Security Office – I have had few problems with that. Perhaps that is because my clients have a plan.
However, Mr. Kotlikoff believes thatit may be safer to file for retirement benefits and spousal benefits online. In that case, he believes that retirees can state exactly what they want to do, and specify in the remarks section of the application form. “You can’t write what you want by phone,” said Kotlikoff. Filing online can also avoid the problem of a worker at a Social Security office writing down the wrong information. Widow and child benefits, however, cannot be applied for online, said Kotlikoff.
If you are beginning your Social Security benefits at Full Retirement Age, for those currently filing, it would be age 66, you will need to specify the exact date they want to begin taking benefits in the remarks section of their social Security application. Otherwise Social Security will provide six months’ worth of retroactive benefits in a lump sum, which will have the effect of slightly reducing future monthly Social Security payments.
During the webinar, Mr. Kotlikoff recounted the example of an ex-wife who’s 63 and made the grandfather cutoff to collect under file and suspend. She can file for full spousal benefits of an ex-spouse when she reaches full retirement age at 66, then collect those for four years until the larger retirement benefit kicks in at age 70. At that point, if the ex has passed away she can take the larger of two benefits – the divorced widow or the divorced spouse. Per Mr. Kotlikoff, you should keep track whether your ex-spouse is still alive.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by STA Wealth Management, LLC), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from STA Wealth Management, LLC. Please remember to contact STA Wealth Management, LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. STA Wealth Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the STA Wealth Management, LLC’s current written disclosure statement discussing our advisory services and fees continues to remain available upon request.
Financial Planning and Investment Advice offered through STA Wealth Management (STA), a registered investment advisor. STA does not provide tax or legal advice and the information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters or legal issues, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
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