Markets Turn Jittery

Last week, rising tension between North Korea and the U.S. rattled the world’s markets.  As the two countries traded tough words, concerns escalated and markets reacted emotionally to the news.  Though stress is building internationally, we remain committed to focusing on the market fundamentals that drive long-term value.

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Markets Remain Bullish

Another week of economic performance brought more news that the markets continue their bullish streak.  After eight consecutive record-high closings, the Dow rose above 22,000 for the first time ever and finished the week up 1.20%.  The S&P 500 was up 0.19% for the week, and the NASDAQ slightly fell by 0.36%.  Meanwhile, the MSCI EAFE closed with a 0.82% increase.

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Getting (Mentally) Ready to Retire

Even those who have saved millions must prepare for a lifestyle adjustment.

Provided by Brad Connors, CWS®

A successful retirement is not merely measured in financial terms. Even those who retire with small fortunes can face boredom or depression and the fear of drawing down their savings too fast. How can new retirees try to calm these worries?

Two factors may help: a gradual retirement transition and some guidance from a financial professional.

An abrupt break from the workplace may be unsettling. As a hypothetical example, imagine a well-paid finance manager at an auto dealership whose personal identity is closely tied to his job. His best friends are all at the dealership. He retires, and suddenly his friends and sense of purpose are absent. He finds that he has no compelling reason to leave the house, nothing to look forward to when he gets up in the morning. Guess what? He hates being retired.

On the other hand, if he prepares for retirement years in advance of his farewell party by exploring an encore career, engaging in varieties of self-employment, or volunteering, he can retire with something promising ahead of him. If he broadens the scope of his social life, so that he can see friends and family regularly and interact with both older and younger people in different settings, his retirement may also become more enjoyable.

The interests and needs of a retiree can change with age or as he or she disengages from the working world. Retired households may need to adjust their lifestyles in response to this evolution.

Practically all retirees have some financial anxiety. It relates to the fact of no longer earning a conventional paycheck. You see it in couples who have $60,000 saved for retirement; you see it in couples who have $6 million saved for retirement. Their retirement strategies are about to be tested, in real time. All that careful planning is ready to come to fruition, but there are always unknowns.

Some retirees are afraid to spend. They fear spending too much too soon. With help from a financial professional, they can thoughtfully plan a withdrawal rate.

While no retiree wants to squander money, all retirees should realize that their retirement savings were accumulated to be spent. Being miserly with retirement money contradicts its purpose. The average 65-year-old who retires in 2017 will have a retirement lasting approximately 20 years, by the estimation of the Social Security Administration. So, why not spend some money now and enjoy retired life?1

Broadly speaking, our spending declines as we age. The average U.S. household headed by an 80-year-old spends 43% less money than one headed by a 50-year-old.1

Retirement challenges people in two ways. The obvious challenge is financial; the less obvious challenge is mental. Both tests may be met with sufficient foresight and dedication.

Brad Connors may be reached at 507-835-9111 or info@iWealth4me.com

Visit www.iWealth4me.com for more information.

 

Securities, advisory services, and insurance products are offered through Investment Centers of America, Inc.® (ICA), member FINRA, SIPC, a Registered  Investment Advisor, and affiliated insurance agencies.  ICA and iWealth are separate companies. This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – tinyurl.com/ydedsyl5 [4/24/17]

 

Markets March Ahead

Last week, markets marched ahead within a busy reporting week.  The Dow rose 1.16% to close Friday on another new high.  The S&P 500 notched a record high during the week, despite closing the week slightly down 0.02%.  Meanwhile, the NASDAQ slipped 0.20%, and the MSCI EAFE rose 0.21%.

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Strong Stocks & A Falling Dollar

Last week, the Dow, S&P 500, and NASDAQ again hit record highs.  The midweek peaks fell by Friday, though market performance remained strong.  By week’s end, the Dow dropped 0.27%, and the S&P 500 and NASDAQ dipped on Friday but closed up 0.54% and 1.19%, respectively.  The MSCI EAFE finished with a 0.46% increase.

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Schooling College Students about Financial Responsibility

Classrooms at universities and colleges across the nation will open for fall semester in the next couple of months. You might have a child, grandchild, niece or nephew who is all set to spend their semester studying, socializing, and living on their own. You have prepared them for college life by teaching them how to grocery shop, prepare simple meals, and do laundry. Often, however, college students head to school with little knowledge about making a budget and managing money.

A National Student Financial Wellness Study, the first of its kind released in 2015 by Ohio State University, showed college students’ biggest worries were not exams or terrible roommates. Their biggest worries revolved around money. A little more than 72% of the students surveyed said they felt stressed about personal finances, monthly expenses, or whether they would be able to pay for college at all.[1]

A 2016 survey found that among college students surveyed, 71% said they learned about money management from their parents.[2] So take a few minutes and sit down with your college student today and share these tips. Your advice could help them not only during their college days but throughout their lives.

Financial Advice for Your College-Bound Students

  1. Help your college student set up necessary accounts. College students likely will need at least checking and savings accounts.[3] Start teaching them good habits now and ask them to research banking institutions that would be convenient for them to get to from campus or their residence.
  1. Establish clear financial responsibilities. Determine who will be responsible for which expenses. If you are planning to take care of bills such as auto and health insurance, or cell service, be clear with your student that he or she is responsible for living expenses including rent, utilities, groceries, and other household costs.[4]
  1. Wean them off your bank accounts. It might be tempting to continue paying your child’s, grandchild’s or niece’s or nephew’s expenses to help them get a strong start, but that does not teach them to be self-sufficient; it is likely to make them more dependent on you.[5]
  1. Decide whether a credit card is appropriate. Credit cards often give college students the most trouble. Credit cards are an effective way to establish early credit history, but it is common for students to run up balances without fully understanding how credit cards work. If your student gets a credit card, be sure they understand how credit cards work and how important it is to pay off the balance every month.[6]
  1. Will your college-bound student work during college? Holding down a part-time job while going to school has plenty of advantages. It helps cover living expenses or it gives them a chunk of money to save each month. It also makes it easier for them to manage money and gain valuable work experience. And finally, it looks great on their resume after they graduate and go looking for a job in their field.

It is never too late to sit down with your college-bound child, grandchild, niece or nephew and talk frankly with them about the importance of being financially responsible.

We are here to help you each step of the way, so please let us know if you have any questions about these tips or the bigger strategies that are helping guide you to your financial future.

Kind Regards,

Brad Connors
Certified Wealth Strategist®

 

Footnotes, disclosures, and sources:

Securities, advisory services, and insurance products are offered through Investment Centers of America, Inc.® (ICA), member FINRA, SIPC, a Registered Investment Advisor, and affiliated insurance agencies.  ICA and iWealth are separate companies.
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker Dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

We have not independently verified the information available through the following links. The links are provided to you as a matter of interest. We make no claim as to their accuracy or reliability.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

 

[1] “Big Debt on Campus: Why Money Stress Tops Student Worries.” Learnvest. [Accessed July 1, 2017.] https://www.learnvest.com/knowledge-center/big-debt-on-campus-why-money-stress-tops-student-worries-123/

 

[2] “Majoring in Money: How American College Students Manage Their Finances.” The SallieMae Fund. [Accessed June 30, 2017.] http://news.salliemae.com/sites/salliemae.newshq.businesswire.com/files/doc_library/file/SallieMae_MajoringinMoney_2016.pdf

 

[3] “How to Financially Prepare Students Going off to College.” Redstone Credit Union. [Accessed June 30, 2017.] https://www.redfcu.org/tips-tools/blog/how-to-financially-prepare-students-going-off-to-college

 

[4] “How to Financially Prepare Students Going off to College.” Redstone Credit Union. [Accessed June 30, 2017.] https://www.redfcu.org/tips-tools/blog/how-to-financially-prepare-students-going-off-to-college

 

[5] “Ways Parents Can Help Their Boomerang Kid.” 360 Degrees of Financial Literacy. American Institute of Certified Public Accountants. [Accessed July 1, 2017.] http://www.360financialliteracy.org/Topics/Family-Financial-Planning/How-to-Talk-to-Your-Children-About-Money/Ways-Parents-Can-Help-Their-Boomerang-Kids

 

[6] “Managing Your Money While in College / Five Habits that Will Shape Your Financial Futures.
The Balance. [Accessed July 2, 2017.] https://www.thebalance.com/managing-your-money-while-in-college-2385965

 

Q2 Coming Into Focus

Last Friday, stocks closed on more record highs.  The S&P 500 rose 1.41% and the Dow climbed 1.04%-both closing at new peaks.  The NASDAQ reported a 2.58% gain and the MSCI EAFE posted a 2.38% increase.  Despite continuing headlines from Washington, the markets remain productive and strong.  New Q2 numbers also rolled in last week, giving us a clearer picture of what happened from April through June.

Click here to read the full article.

Markets Start Second-Half Slow

As the country celebrated the Fourth of July last week, the markets experienced some volatility, though they finished a bit flat overall.  The Dow fell then rose to close the week up 0.30%.  The S&P 500 climbed a modest 0.07% for the week, and the NASDAQ finished the week up 0.21%.  The MSCI EAFE fell 0.48%.

Click here to read the full article.

Market Volatility Returns

As Q2 ended, markets hit a six-week volatility high.  While the tech sector declined during the week, consumer discretionary and industrial sectors drove stocks higher on Friday.  On Friday, the tech-heavy NASDAQ slumped 1.99%.  The S&P fell 0.61% and the DOW dropped 0.21%.  Globally, the MSCI EAFE declined 0.32%, and European markets and most of the Asian markets finished the week down.

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Could Insurance Rescue You in Retirement?

Certain kinds of coverage may help to sustain you financially in an emergency.

Provided by Brad Connors, Certified Wealth Strategist®

You plan for retirement with expectations in mind. You hope to enjoy a certain quality of life, with sufficient income resulting from smart financial choices. Ideally, your future unfolds as planned.

But what if the unexpected happens? Will you have the right insurance in place to deal with it?

Insurance matters more in retirement planning than you may think. It is seldom “top of mind” in retirement planning conversations, but the right coverage could help you maintain some financial equilibrium in the face of sudden money pressures.

A life insurance payout could provide income for a surviving spouse. Thanks to late-night TV commercials marketing small funeral insurance policies, many retirees associate life insurance benefits with paying off burial costs. Benefits from larger policies can potentially accomplish much more.

Suppose a 75-year-old widow receives a $500,000 death benefit from a policy purchased by her late spouse. An income stream could be arranged from that death benefit, with the widow receiving $20,000 annually from that lump sum (or more) into her nineties. The payout could also be invested.

Liability insurance could help you out in retirement. As an example, say you are one of three drivers involved in a multi-car accident that leaves a teenager with a disability. You are the only driver cited for a traffic violation, and you happen to be in your seventies. You could now be a target for “predators and creditors.” Say you have some neighbors over for a barbecue, and one of them stumbles on your patio and breaks an arm or a hip; a lawsuit may be next. Few retirees think about or carry umbrella liability policies, but more may want to consider them.

What if you or your spouse need long-term care? Genworth’s 2016 Cost of Care Survey says that the median monthly cost of a semi-private nursing home room was $6,844 last year based on annual rate divided by 12 months. How many years of such care would you be willing to pay for out of your savings? True, long-term care insurance has grown costlier. True, some people may never need it. Even so, three or four years of such care – for you, your spouse, or your elderly parents – might draw down your retirement savings more quickly than you would imagine. Think of how large those costs might be ten or twenty years from now. Long-term care coverage may end up being worth every penny.1

Insuring yourself against the above possibilities is only prudent. With such coverage in place, you may go a long way toward insuring the quality of your retirement as well.

Brad Connors may be reached at 507-835-9111 or info@iWealth4me.com.

Visit www.iWealth4me.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities, advisory services, and insurance products are offered through Investment Centers of America, Inc.® (ICA), member FINRA, SIPC, a Registered Investment Advisor, and affiliated insurance agencies. ICA and iWealth are separate companies.

Citations.

1 – genworth.com/about-us/industry-expertise/cost-of-care.html [6/22/16]

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