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Happy Thanksgiving and welcome to the November edition of The Wealth Chronicle.  
Terror And The Markets
Over the past couple of weeks we saw terror attacks in Paris, Nigeria, Tunisia, Mali, and Lebanon. A bomb took down a Russian airliner in Egypt and Turkish fighter jets shot down a Russian bomber they claim infringed on their airspace. France and Russia are on a bombing spree in Syria. The markets typically do not like uncertainty, but they have shrugged off this recent geo-political turmoil and have actually risen sharply in the past couple of weeks. It seems more attention is being paid to the expected boost in the federal funds interest rate next month.

If we look back at events like this historically we would see that the behavior we are experiencing now in the markets is common to how it has responded to previous acts of terror. John Kimelman published an interesting column on Barrons.com titled "Why are Markets Largely Immune to Terror"  

The attacks on 9/11 in the US were on a far grander scale than what we saw in Paris, but the markets only took a month to recover. Attacks may cause short-term disruption to economic life; people may decide not to visit town centers for a few days. But this generally means they postpone consumption rather than abandon it.

Here is a look at recent terror attacks and how the markets have responded after 1 week, 1 month, 6 months, and 1 year.

 
 
 


Changes to Social Security Claiming Strategies
Maximizing Social Security benefits has been one of my favorite areas to focus on for retirees because there is not a lot of information on the subject and there are easy ways to obtain additional benefits than most people originally through they could receive.

Two of my favorite strategies are called "File and Suspend" and "Claim Now, Claim More Later"

File and suspend increases the Social Security claiming options for many married couples by allowing them to take advantage of spousal benefits and "delayed retirement credits" simultaneously. Under current law a spouse cannot claim a spousal benefit unless the main beneficiary claims benefits first.

Claim now, claim more later is another strategy that couples can use. One member of the couple, usually the one who earned less, claims his or her own retirement benefit. This can be done as early as age 62, although the benefit will be reduced. The other member of the couple, who has reached full retirement age, can claim spousal benefits and let his or her own retirement benefit continue to grow until age 70. At age 70, the recipient "switches" to his or her own retirement benefit, which has grown by 8 percent per year.

Unfortunately the budget deal that rapidly passed through Congress in late October ended the ability for retirees to take advantage of these two strategies. http://www.marketwatch.com/story/key-social-security-strategies-hit-by-budget-deal-2015-10-30

Depending on when you were born, you may be "grandfathered" in to being able to use these strategies. These are also not the only claiming strategies that someone can use to maximize their benefits. If you have any questions on whether the changes impact you or if there are other Social Security strategies you should take advantage of I would be happy to talk to you.

Planning Your Money To Last The Rest Of Your Life
Life expectancies in the United States have been on the rise. If you were born in 1950 you had a life expectancy of 71 years if you are a female and 65 years if you are a male. If you are born this year you can expect to live 82 years for females and 76 years for males. But those numbers do not tell the whole story when it comes to how many more years you can expect to live.

If you are a 60 year old man today you can expect to live another 21.5 years, that is to live to be 81.5 years old. And if you actually live to be 81.5 years old you can expect to live another 8 years. And if you live another 8 years to be 90 you can expect to live another 4 years.



For income planning purposes it means a couple of things:

1) You are probably going to live longer than you think and thus you will need to ensure you can pay for your expenses during those additional years.
2) If you keep your money on the sidelines in cash, inflation is going to eat it up quicker than you realize.

It doesn't mean you have to invest in an aggressive Chinese mining company, but you want every dollar you have working for you the best that it can.

 
 
The Watercooler
We received an early Thanksgiving present on Tuesday 11/24 with the birth of our son Harrison Arthur

 

Charlotte is thrilled to be a big sister



   
Special thanks to Dr. Tom for the safe delivery




Please contact me regarding any of the articles above, or if you would like to discuss your personal or business finances

Sincerely, 

 





Marc Bautis
Bautis Financial
201-842-7655