How to overcome the Social Security benefit reduction in 16 years
The SS trustees estimate that by 2034 the combined trust funds for Social
Security — which help fund the old age and disability programs — will run dry.
At that point Social Security will be able to pay only 79% in promised benefits
to retirees and disabled beneficiaries. Those projections are roughly on par
with last
year's report, which estimated the combined Social Security trust funds
would be tapped out by 2034 and would then only be able to pay out 77% of
benefits. Since Congress may not be able to fix this problem, you will have to do it yourself. If
you are counting on $1,461
the average benefit for a 67 year old with today’s formula, it will
be modified to pay about $1,154. If you believe you will need more that $1,154
a month, plan now—TIME and the Miracle
of Compounding can help close your income gap of $307 a month then. You
can have $60,000
in 16 years by earning 8% on your $2,000 a year contributions. You
contribute $32,000 for $60,000 when you need it to supplement reduced SS
benefits.
Use low-cost funds for higher returns: https://www.amazon.com/Miracle-Compounding-Turn-day-into/dp/1470176513
Where do your financial fees and commissions go?
The median amount of managed assets per advisor dropped 7% in 2018 to $99
million, while median
‘revenue’ per advisor rose 6% to $694,000 in the same time frame. Typically
salespeople receive 33-40% of that in gross. They may have expenses. Big
producers gross over $2 million but most
take home $66,000. So most of your money goes to marketing and overhead of
the firm. Most firms are not public so we don’t know the income of owners. As a
clue, the current owner of Fidelity receives a
nice package in the $ millions each year. It is NOT fantastic customer returns
that she gets paid for. Most of the huge salary/bonus the owners receive comes from
market growth NOT their smarts or hard work. The
market’s 11% average increases your balance. You give Fidelity and other
owners 1-2% of your account balance EVERY year (with eight fees and expenses
you pay). They receive them even when they had nothing to do with earning it.
In fact it is impossible for them NOT to make $ billions on all of our accounts
just because of the ownership structure. Only one firm is owned by us, the
shareholders.
Should we fear investing in the stock market right now?
Most of us have little experience with investing in securities. Even if
we have some of our pay directed to the employer’s 401k or 403b, we don’t have
a clue which securities to buy and own. If
we listen to Wall Street brokers, we often lose. If our schools had a basic
money course, it would show us how to decide: are you saving for your
vacation or for your retirement? It
is TIME that decides. If you need your money next year, it’s a bank CD at 2%; in less
than 5 years, a mutual fund of stocks and bonds earning 6-8%; in 10
years or more, it is a diverse stock fund earning 10-12%. We
don’t have to learn anything about risk/reward, stocks/bonds, alpha/beta,
sector rotation, buy low-sell high, trading costs, or anything else Wall
Street advert’s talk about. In fact, Fidelity looked at their most
successful investors and found they
forgot their account or they were dead. Follow the master investor’s
advice: it is simplicity itself.
Warren Buffett as advisor: https://www.amazon.com/Warren-Buffett-Your-Investment-Advisor/dp/1518690963
Do Wall Street traders really make a living?
Like everything, the answer varies. Salary.com pegs the lower 10 percent
of stock traders’ salaries at about $43,200 per year.
Those in the middle 50 percent earn a slightly higher salary, often around
$57,600 each year. The highest earners nationwide, on average, take home
$66,600 per year. The average household
income is $60,000. Of course, the financial press can always find someone
who ‘says’ they earn $150,000 or $1 million as a professional trader. There
are very few surprises in financial services. The only sure thing is what our
Congress people have: a law that makes ‘insider
trading’ legal only for them. They
learn about a law that will benefit ABC corp and they buy zillions of shares
with credit (margin account) and their family assets. They can’t lose. Trying
to make a living finding and trading the next ‘hot’ stock seems more hectic
than it’s worth. According to a very smart person I know, investing in the
stock market is like particle physics—each particle is hard to follow but a
bunch of them follows a set pattern.
As John Bogle said: forget
the needle and buy the haystack. Your choice.
What’s your retirement plan?
46%
of us don’t have enough. Some claim they will work till they drop. If so,
why are so many taking SS benefits at age 62 when they could add 8% a year by
waiting till they are age 70. I started benefits at age 62 because I could
not find a job in my field. I receive $1,557 currently. My spouse waited and
receives $2,964 or almost double. I should have waited. If you have no plan, start
now. No matter how old you are, it would be better to use TIME to grow your
nest egg. $250 a
month automatically invested in a balanced (stocks and bonds) fund could
provide you with $150,000 in 20 years. Example: Vanguard
Wellesley Income Fund has provided over 9% a year for 10 years and
since 1970. It has had only one bad year. It costs much less than most other
‘managed’ funds.
A simple wise plan works: https://www.amazon.com/Your-Retirement-Spending-Plan-enough/dp/1461084016
Avoid taxes on retirement savings
You can’t add to your IRA or Roth
IRA if you don’t have earned income after age 70.5. So if you are receiving
income you don’t need and don’t want to be taxed on it as it grows for your
later years, you can still avoid taxes. You can buy/hold stocks that don’t pay dividends.
You need to open a brokerage account. You can move your money there and buy any
number of individual stocks. Unless you sell them, there is NO capital gain and
thus no tax. One client had to begin taking RMDs from his IRA account. He will
owe tax next year on this IRA money. He opened a brokerage account with his IRA
fund firm. The IRA trustee automatically sells the appropriate amount of IRA
funds monthly (as demanded by the IRS) and places cash in a Fed MM account. At
each drop in the price of Buffett’s BRK.B stock, he buys shares. Since there
are no dividends and no capital gains (until he sells) this strategy will avoid
taxes in his lifetime. Actually, his heirs will not have to pay his
taxes either since the basis of the taxes goes back to zero upon his death.
**************
Truth isn’t truth, his
lawyer says
Two Americas
***********************
How Govt wastes our money: Congress spends $1.3 Trillion we don’t have!
Guantánamo
Bay as Nursing Home: better deal than our own vets receive?
We are borrowing faster than we are making it: Economy
grew 3.2% not 6 as promised.
Lobbyists
tell Congress NOT to close tax evasion/laundering entities: Are we
surprised?
Trump
and GOP look at invading Venezuela: Congress has little power over Trump.
Trump wins: Yemen
killings continue with US support for Saudi-led war.
SCAMS/SPINS:
Trump: withdrawing
U.S. support for an international arms-trade treaty: threatens troops.
Trump
WH predicts Russia threat to elections but does nothing: Like an invitation to scam votes.
Lobbyists force
Congress to pass bill putting
annuities in retirement package: profits soar.
Chase
bank tells us to stop drinking coffee to save after we gave it $25 billion.
Wells Fargo doubles
lobbyists pay to get Congress off its case: Customers lose.
Ford caught
“intentionally violated the law” in its emissions testing. Joins VW, Fiat,
etc.
Elder abuse: family
members steal from those least able to protect themselves: Ask them.
Survey: voters want lower
drug costs and shield pre-existing conditions, med bill surprise
ACS Education
Services caught
failing to correct student loan balances so more charges
First drug
maker/dealer found guilty
of bribing doctors to push opioids. Jail time
Christopher
Dougherty CA caught Ponzi
defrauding 50 of $7 mil ‘private placement’ 5%.
Francesco Puccio NY caught
reselling annuities/life ins. for commissions: fine no jail
Anselmo Contreras, caught
stealing customer funds: barred from securities.
Axa caught
"negligently misrepresentated" bond funds: 401k customers
mislead. Fine
Axa caught
making unsuitable variable annuity and life insurance sales to seniors. No
jail
If you ignore
Congress subpoena or a judge’s
order: aren’t you in jail or a dictator?
Mueller
ignores Mob Boss family Russia
deals: OK to conspire
with enemy & obstruct!
1. “Russia Russia Russia
REDACTED Mueller
Report here: https://thehill.com/policy/national-security/439485-read-muellers-redacted-report:
tell lawyer to stop probe, stop probe, mislead public.
The Mob Boss can never go to jail: Trump
has Kava as Supreme so no contempt.
‘No man is above the
law’ … well up till now. Dictators
nullify courts first, then votes.
Supremes
protect Don’s ‘Orders’? – GOP: ‘Sure, pres
can change
Constitution anytime.’
Jobs:
Public
relations jobs increase--newer specialties that target social media grow: olivajade?
Renewable
energy passes coal: 100%
carbon-free energy by 2050: 23 coal plants retired.
Paying minimum
wage cuts suicide rate in some areas: “deaths
of despair”
Making new apps
for phones may be top job for next 10 years: $100,000 for some.
Student
loan repayment part of benefit package for new hires: 401k overlooked.
401k hardship
withdrawal amounts
have grown although number of loans has fallen.
Who owns your account now?
New bank attracting
new money: Comenity
pays 3%
Miracle:
Will it take a
miracle to save the endangered
giraffes? Penguins?
Bears?
Humans?
Student
Riley Howell dies for his fellow Charlotte students: toppled shooter; took
a bullet
8
year old saves sister from carjacking kidnapper: GrandMom left to help
other woman
Families
share the ultimate gifts and then chance brings them together
IAN
41 Watchung Plaza,
B242
973.746.2014
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