Political Divide/Markets/Social Security

Political Divide/Markets/Social Security


Last week I had the pleasure of following the Markets, politics and the on-going political divide from sunny Riviera Maya, Mexico. Certainly made the weeks’ events more relaxing!


The Markets


For the week, the Dow, S&P 500, Nasdaq Composite and the Russell 2000 were all up marginally, continuing the recent weekly win streak. Over the pond, the MSCI EAFE International Index lost (1.02) % and the Emerging Market Index fell (1.40) %.


The Barclays Aggregate Bond Index rose .38%.


Stocks and Bonds are both off to a good start in 2019.


As of this writing, Corporate Earnings Reports suggest 70% of the companies that have reported earnings, beat their estimates, which is slightly below the last few quarters. However, the margin of the increases compared to previous quarters, is lower. Corporate reports have also been guiding down expectations for 2019.


With the Federal Reserve giving the appearance they are on hold for the time being with rate hikes, I believe for the Stock Market to continue its upward ascent, the China Trade issue and the Government Budget issues need to be worked out in a positive manner. The Trade issue is a contributor to the reduction in corporate profit increases and lowered corporate guidance, in my opinion.


The Political Divide


I realize, I walk a fine line when discussing politics and political events in our Blog. However, I am so bothered by the ever worsening political divide and the aggressive anger and behavior displayed daily in the press, on television, between friends, neighbors and even families. Listening to several conversations at the pool and beach last week, revealed the divide is certainly not limited to us folks here in the Northeast. (Not that this is a surprise)


As an Advisor who has the absolute pleasure to serve a Clientele from ages 55 through 93, I’ve learned to appreciate political differences and various perspectives. Having many long term Client relationships has enabled me to better understand different perspectives. I am so thankful for this shared wisdom.


What I cannot appreciate, is how incredibly rude many have become when airing their political opinions and differences. In the United States, we are certainly free to state our opinions and political  views, for what we believe, is in the best interest of OUR country. I realize that every action spurs a reaction, which spurs another action and then a reaction and so on. In my opinion, this “snowballing” effect typically masks the real underlying issues and many people (on both sides) don’t take the time to really think through the issues clearly. I’m afraid with the next Presidential Election in 2020, this may only become worse. Let’s hope not!!


Social Security Update


The annual Trustees Report comes out in the spring, however here is an brief update.


In 2018, the program reported income of $1.003 trillion and expenses of $1.000 trillion leading to an increase of the Trust Fund by $3 billion for a new total of $2.895 trillion.


There are three cost scenarios the Trustees detail yearly. One showing a high cost scenario which shows the Trust Fund running out in 2030, a low cost scenario showing Social Security remains solvent for the next 75 years. The most common is the intermediate cost scenario which projects the Trust Fund to exhaust in 2034.


A current bill in Congress, titled the Social Security 2100 Act is getting some attention and perhaps could go further. This bill raises both benefits and taxes and would restore solvency for the next 75 years.


I’ll be writing a Social Security only Blog shortly, to detail the Trustee Report. as well as, summarize the current Congressional Bill.


Our next Social Security Workshop, schedule for next Tuesday, February 19th, will also provide a valuable update. For information on the Social Security Workshop, please click here Social Security Workshop.


Question of the Week


From approximately 1932 until 1980 the top Federal Income Tax Rate was over 50%.


What was the highest Federal Tax Rate during that period of time?

a) 50%

b) 95%

c) 91%

d) 70%

e) None of the above



Answer to January 28th Question


SOCIAL SECURITY: Many people are confused about what is their “Full Retirement Age” to begin receiving an unreduced monthly Social Security Retirement Benefit.


What is the last year you can be born to be able to collect your full Retirement benefit at age 66 and not have to wait until sometime between ages 66 and 67.

a) 1955

b) 1960

c) 1962

d) 1954


Correct answer –

d) 1954


For each year of birth beyond 1954, your full retirement age for your Social Security benefits increases by 2 months. For example, if you were born in 1957, to receive 100% of your full retirement age benefits, you must apply when you are age 66 and 6 months. Those born in 1960 or later, the full retirement age is age 67.

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