Expenses are often much different in retirement than they are during working years, but they are still incredibly important to the overall plan.
Often, clients will spend more in the early years of retirement, see expenses dip in the middle, then rise as they near the end of their lives and medical expenses climb.
Also, NOT all Expense Categories grow at the Same Rate of Inflation, and this needs to be considered when forecasting long-term expenses.
On Friday, August 22, the S&P 500 closed @ 1988, and that was...
+7.3% ABOVE its 12-Month moving average which stood @ 1853.
+5.9% ABOVE its 40-Week moving average which stood @ 1878.
+1.3% ABOVE its 10-Week moving average which stood @ 1963.
Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.
The role of Social Security in the retirement planning process is changing as concerns grow over the availability of benefits for future generations.
According to the Annual Report of the Board of Trustees, RESERVES for Social Security will be fully depleted in 2033, which is not too far away.
While it's impossible to predict what will happen to the system, planners and their clients need to consider the impact of potential reductions to payments.
Excerpt:
"Vanguard
predicts a most likely case of a +5.7% real annual returns for stocks, but other
experts are more cautious.
In his new book, Rational
Expectations, William J. Bernstein predicts a +2% real return for large-cap stocks and
+3% for small-cap stocks over the
next decade.
Rob Arnott, chairman of Research Affiliates, forecasts a
+3% real return over the next
decade."
My own opinion is that the future is even more uncertain than the ranges
shown in the Vanguard model — especially on the downside.
And as I see it, the
world is a less predictable place than ever before.
Read the entire report here...
Vanguard Capital Markets Model: 10-Year Investing Forecast
On Friday, August 15, the S&P 500 closed @ 1955, and that was...
+5.8% ABOVE its 12-Month moving average which stood @ 1848.
+4.4% ABOVE its 40-Week moving average which stood @ 1873.
-0.2% BELOW its 10-Week moving average which stood @ 1958.
Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.
There are various Social Security claiming strategies that help to maximize the benefits for an individual or couple.
The breakeven age where you would be better off delaying benefits typically occurs between your late 70s and early 80s, depending on how long you wait and other factors.
The +8% per year increase from full retirement age to age 70 is compelling, and once a client crosses that breakeven age, the benefit grows exponentially.
Strategies such as "file and suspend" can be used to fully maximize Social Security benefits, especially for married couples.
The bull market for the S&P 500 is in its 66th month.
Since bottoming on 03/09/09 (i.e., 65 months ago), the S&P 500 has gained +220% (total return) through the close of trading last Friday, 08/08/14.
The average bull market for the S&P 500 since 1950 has lasted 58 months.
On Friday, August 8, the S&P 500 closed @ 1932, and that was...
+4.7% ABOVE its 12-Month moving average which stood @ 1845.
+3.4% ABOVE its 40-Week moving average which stood @ 1868.
-1.3% BELOW its 10-Week moving average which stood @ 1958.
Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.
While estate planning is less important for federal estate tax reasons, with the increase in the exemption amounts to over $5 million per person, the non-financial aspects of estate planning are still critical.
Making sure clients have a power of attorney updated and in place, and addressing the need for health care documents like a health care power of attorney and advance directive can be very important.
Trustee designations and naming the proper beneficiaries are often missed or not changed when life circumstances change.
On Friday, August 1, the S&P 500 closed @ 1925, and that was...
+4.4% ABOVE its 12-Month moving average which stood @ 1844.
+3.3% ABOVE its 40-Week moving average which stood @ 1864.
-1.5% BELOW its 10-Week moving average which stood @ 1957.
Therefore, the INTERMEDIATE-Term trend is NEUTRAL
and the LONG-Term trend is UP.
Long-Term Care costs are increasing -- as is the percentage of the population that will need this kind of care at some point in their lives.
Looking broadly at how to fund these costs is important, whether that means self-insuring if you have enough assets or buying some form of Long-Term Care insurance (LTCi).
