Quote of the Week

“May we think of freedom, not as the right to do as we please, but as the opportunity to do what is right.” Peter Marshall

Technical Corner 

Stocks finished mixed for last week as markets digested the strong gains for the month of June. The increases in June made up for the losses in May. The S&P 500 is just a pinch short of being even for the last two months.

The much anticipated G20 Summit meeting in Japan concluded with the U.S. and China agreeing to call a cease fire on the trade war. The current tariffs will stay in place for imported goods from both countries, but China agreed to buy more agricultural products from the U.S. I don’t see how that will come about since the tariffs China are charging on our agricultural products are still in place, plus China has already established trade agreements with Argentina and Brazil for soybeans and other grains. The problem is that the trade agreements with China have already been broken and will take a long time to re-establish them.

Just another sign that the U.S. economy is slowing is the ISM Manufacturing Index declined to 51.7 in June from 52.1 in May. A level higher than 50 signals expansion and, levels below 50.0 signal contraction. This lower number is still continuing its downward trend. Just six months ago in November 2018, the index was at 60.7. The key takeaway is that the trend is declining.

We are still maintaining a conservative position in all the portfolios with our only equity exposures being REITs, Utilities, and some gold. The majority of the portfolios are in safe fixed income.

Stephanie’s Thoughts

If you wonder when to claim social security, read on for one of the latest reports.

 Retirees Miss Out On $3.4 Trillion By Claiming Social Security Too Early, Study Says 

By Sarah O’Brien


  • More than 70% of recipients start their benefits before age 64, although just 6.5% can actually build more long-term wealth by claiming so early.
  • Those guaranteed monthly checks account for about one-third of all income for retirees.
  • About 50% of recipients rely on Social Security for more than half of their annual income. Another third count on it for more than 90% of their income.

Retirees lose a collective $3.4 trillion in Social Security income by not waiting as long as possible to tap benefits, a new report concludes.

The study from investment firm United Income examines the long-term financial effects of the decisions surrounding when to claim Social Security. Just 4% of retirees make the generally optimal decision of waiting until age 70 — when benefits reach their maximum amount — to start getting those monthly checks.

About 57% of retirees would build more wealth if they waited until 70, compared to just 6.5% of retirees — predominantly lower-income individuals with no separate savings — who would have more wealth if they claim prior to age 64. Despite that, more than 70% of retirees tap their benefits by then, according to the study. The earliest you can claim is age 62.

“People should really engage in retirement planning and figure out whether they should take Social Security early or not,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York.

The report examined data from about 2,000 households that participate in a long-running retirement survey done by the University of Michigan. To calculate when the ideal claiming years should be, United Income looked at the longevity for adults in those households, along with their spending projections.

Every year, about 65 million retirees receive Social Security. While the federal program accounts for about one-third of all income for retirees, about 50% of recipients rely on it for more than half of their annual income. Another third count on it for more than 90% of their income.

Deciding when to tap Social Security benefits can be a complicated decision and depends on an individual’s situation. Yet the longer you wait to start those monthly checks, the larger they will be.

In addition to considering what a bigger benefit would mean, retirees should consider their life expectancy when determining when to tap Social Security.

Those who expect to live well into their 80s or later benefit from waiting until age 70 to begin their benefits. If that’s not the case, it could make sense to tap them earlier.

“The break-even age is usually around 81,” Boneparth said.

Of course, many retirees simply can’t afford to wait. The report notes that most retirees would lose wealth in their 60s and early 70s if they delay claiming, but would be wealthier in their late 70s and for the rest of their lives.

PUBLISHED FRI, JUN 28 2019  10:41 AM EDT UPDATED FRI, JUN 28 2019  10:59 AM EDT

O’Brien, Sasha.  “Retirees Miss Out On $3.4 Trillion By Claiming Social Security Too Early, Study Says”

https://www.cnbc.com/2019/06/28/retirees-lose-3point4-trillion-by-claiming-social-security-too-early.html. Accessed 1 July 2019

By the Numbers

JULY FOURTH – When the Continental Congress approved the Declaration of Independence on 7/04/1776, the population of the 13 colonies was 2.5 million, equal to the population of Houston today (source: Census Bureau). Michael A. Higley, BTN 06-24-2019

 If you have friends or family in need of financial life planning services,

It would be the honor of Laurence Lof Financial Advisors to assist them.

We value your referrals!

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These are the opinions of Larry Lof and Stephanie Mayoral and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.

The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.

Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.

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