Letters category: Archives

Despite Market Downdraft, Fed to Hike Next Week

Written by Jeremy Siegel.  Reprinted with permission from Jeremy Siegel.  Redistribution is prohibited.

Why We Reduced Euro Exposure Before ECB Meeting

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Labor Report Confirm Fed Move; ECB Miscommunication

Written by Jeremy Siegel.  Reprinted with permission from Jeremy Siegel.  Redistribution is prohibited.

Japan: Earnings Matter More Than GDP

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Economy Remains Steady; Friday’s Payrolls will Decide Fed

Written by Jeremy Siegel.  Reprinted with permission from Jeremy Siegel.  Redistribution is prohibited.

Fed Ready to Raise and Acknowledges Lower Long-run Rates

Written by Jeremy Siegel.  Reprinted with permission from Jeremy Siegel.  Redistribution is prohibited.

Thanksgiving is our favorite time of the year.  Michael loves the football games and everything that comes with that.  Barbara loves the fall colors, the crisp mornings, walking in the fallen leaves, and MOSTLY, the end of Daylight Savings Time.

No matter what you like most about it, Thanksgiving is certainly a time of year that reminds us to reflect upon our incredible blessings:  living in this country, enjoying the freedoms afforded to us, having our families, our friends and daily opportunities to make a difference.

At this special time of year, all of us at Hudock Capital want to express our deep appreciation for you—your business, your friendship, and, most of all, your trust.  Without our clients, Hudock Capital would not exist.

We are grateful for the opportunity that you give us to devote our time and resources to serving our core purpose and passion:  to make a positive and profound difference in the lives of our clients and in the communities we serve.  It is a blessing and a trust that we cherish.

Thank you for allowing us to serve you.

Have a wonderful Thanksgiving.

On Monday, November 2, President Obama signed the Bipartisan Budget Act of 2015 into law.  If you heard about this in the news, you likely know the law raises the debt limit, prevents a possible government shutdown, and ensures the United States won’t default on its debt.

But here’s something you may not have heard about: the changes to Social Security and the consequences the law has for retirees.

From a retiree’s point of view, Social Security is a guaranteed stream of income, something no one should ever neglect.  And while Social Security alone often isn’t enough to help you reach your retirement goals, there are ways to maximize your benefits.

One of those ways, however, is coming to an end.

First, some context.  For a long time, one of the most popular strategies for increasing benefits is to simply delay collecting them.  For example, even though people can technically start receiving benefits as early as age 62, their benefits would be greatly reduced.  Waiting until your “full retirement age” (FRA)—the age at which a person first becomes entitled to “full” or “unreduced” benefits—is often a smarter option.  In most cases, the year you were born determines your full retirement age.

Delaying your benefits even longer is possible, too.  In fact, the latest you can begin collecting benefits is at age 70, and there’s good reason to hold off until then if you can afford it.  You see, benefit payments go up 8% every year you wait up to age 70.  In other words, the longer you can keep your hand out of the cookie jar, the more sweets you’ll eventually receive.

In addition, it has long been possible to maximize your benefits even further by coupling two options together: file-and-suspend and restricted application for spousal benefits.  Here’s how it works.

Imagine a married couple, John and Mary.  Both are 66 years old.  Both are eligible to receive Social Security benefits.  Now imagine that John files for benefits and then suspends actually receiving them.  John does this because he wants to take advantage of the 8% increase that comes from waiting.  This is the file-and-suspend option.

Meanwhile, Mary files a restricted application for spousal benefits.  Mary will receive 50% of John’s PIA (Primary Insurance Amount) assuming she files at her FRA.  This means she can receive a benefit based on John’s earnings instead of collecting her own, even if her own benefits would be higher.

The advantage to combining these options is that both John and Mary will receive larger benefits at age 70, while in the meantime, Mary still gets a regular spousal benefit to help pay for retirement.  Some experts estimate this strategy can raise your retirement income by as much as $60,000 or more.¹

Sounds like a smart move, right?  Unfortunately, the Bipartisan Budget Act of 2015 has put an end to it.  Starting April 2016, neither file-and-suspend nor restricted application will be an option.

To be clear, it’s still legal to delay collecting your benefits.  It’s the concept of allowing a family member to collect benefits based on your earnings while you suspend them that’s being eliminated.

Some other things to know:

  Retirees who have already started using these strategies will not be affected

  Retirees 66 and older who have not used them still have a 6-month period to do so before the law goes into effect

  It’s still possible to apply for a spousal benefit, but under different conditions.  For example, John would have to actually be receiving his benefits (instead of suspending them) for Mary to claim a spousal benefit.

Of course, there are lots of little details that can’t be covered in a single message, but at least now you understand the basics.

Social Security is a complex topic, and these changes certainly don’t make it any easier.  So here’s what we recommend: call us at 570-326-9500 or 866-855-0569 if you have any questions.  If there’s anything about these changes you don’t understand or are concerned about, or if you simply want a frank appraisal of your options, let’s talk.  We’d be happy to discuss Social Security with you in more detail, something that’s not really possible to do in a message.

In the meantime, always remember that we and our  team are here to help you with all your retirement needs.  Please don’t hesitate to contact us at any time.  Our door is always open!

Cash Raised as Risk Metrics Turn Cautious

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Markets Test Fed; Earnings in Tailspin

Written by Jeremy Siegel.  Reprinted with permission from Jeremy Siegel.  Redistribution is prohibited.