Quotes of the Week

“With public sentiment, nothing can fail; without it, nothing can succeed.  Such a leader is inseparably linked to the people. Such leadership is a mirror in which the people see their collective reflection.”  – Abraham Lincoln

“We the citizens have a collective responsibility as to whether or not we want to continue on this course or we want to change the course. The tool of our collective responsibility is to vote.” – Larry Lof

Technical Corner

Last week was a good week for the markets which rebounded from the more than 1% decline in the prior week. This week (Monday) has started off on a down note. Let’s hope we can get through September which historically has been the worst month of the year without any damage. Since the Dow Jones Industrial Average (Dow) was created, 1896, the month of September has averaged a negative return of -1.03%. That compares to the average gain of 0.76% across the average of all the other months.

Last week the Dow was up 0.9%, the S&P 500 Index was up 1.2%, the MSCI EAFE was up 1.3%, and the Nasdaq was up 1.4%. For the year the Dow is up 5.8%, the S&P 500 is up 8.7%, the MSCI EAFE is down 5.9%, and the Nasdaq is up 16.0%.

The last few months have been bleak for the U.S. housing market. There has been a steady stream of negative data showing that the market is definitely slowing. Now a new one is emerging. Bank lending is contracting quickly in the space.

The fall off is so strong that banks are laying off workers in their lending units. Both sources of demand for mortgages, refinancing and new home purchases have dried up as interest rates and housing prices have risen.

July showed the fifth straight month of declining home sales, coming in the time of the year when they should be strongest. Speaking about the state of home prices and mortgage demand, the chief economist at Fannie Mae says, “people are saying, ‘at these prices, and with rates rising, I’ll stay where I am.”

If you are considering downsizing or selling your home, you might consider doing it soon. Sometime in the near future, we may be looking down the throat of the next recession. Housing prices don’t rise during recessions.

Stephanie’s Thoughts

Social Security Survivor Benefits

When you think of Social Security, you probably think of retirement. However, Social Security can also provide much-needed income to your family members when you die, making their financial lives easier.

Your family members may be eligible to receive survivor benefits if you worked, paid Social Security taxes, and earned enough work credits. The number of credits you need depends on your age when you die. The younger you are when you die, the fewer credits you’ll need for survivor benefits. However, no one needs more than 40 credits (10 years of work) to be “fully insured” for benefits. And under a special rule, if you’re only “currently insured” at the time of your death (i.e., you have 6 credits in the 13 quarters prior to your death), your children and your spouse who is caring for them can still receive benefits.

Survivor benefits may be paid to:

  • Your spouse age 60 or older (50 or older if disabled)
  • Your spouse at any age, if caring for your child who is under age 16 or disabled
  • Your ex-spouse age 60 or over (50 or older if disabled) who was married to you for at least 10 years
  • Your ex-spouse at any age, if caring for your child who is under age 16 or disabled
  • Your unmarried children under 18
  • Your unmarried children under 19, if attending school full time (up to grade 12)
  • Your dependent parents age 62 or older

This is a general overview–the rules are more complex. For more information on eligibility requirements, contact the Social Security Administration (SSA) at (800) 772-1213.

How much will your survivors receive?

An eligible family member will receive a monthly survivor benefit based on your average lifetime earnings. The higher your earnings, the higher the benefit. This monthly benefit is equal to a percentage of your basic Social Security benefit. The percentage depends on your survivor’s age and relationship to you.

For example, at full retirement age or older, your spouse may receive a survivor benefit equal to 100 percent of your basic Social Security benefit. However, if your spouse has not yet reached full retirement age at the time of your death, he or she will receive a reduced benefit, generally 71 to 94 percent of your basic benefit (75 percent if your spouse is caring for a child under age 16). Your dependent child may also receive 75 percent of your basic benefit.

A maximum family benefit rate caps the total amount of money your survivors can get each month. The total benefit your family can receive based on your earnings record is about 150 to 180 percent of your basic benefit amount. If the total family benefit exceeds this limit, each family member’s benefit will be reduced proportionately.

You can find out more about future Social Security benefits by signing up for a my Social Security account at the Social Security website, ssa.gov, so that you can view your online Social Security Statement. Your statement contains a detailed record of your earnings, as well as estimates of retirement, survivor, and disability benefits. If you’re not registered for an online account and are not yet receiving benefits, you’ll receive a statement in the mail every year, starting at age 60.

Don’t forget the lump-sum benefit

If you’ve accumulated enough work credits, your spouse may receive a lump-sum benefit of $255. Your spouse must have been living with you at the time of your death or have been receiving benefits based on your earnings record if living apart from you. If you’re not married at the time of your death, the death benefit may be split among any children you have who are eligible for benefits based on your earnings record.

If a loved one has died, contact the Social Security Administration immediately

If a loved one has died and you are eligible for survivor benefits, you should contact the SSA right away. If you’re already receiving benefits based on your spouse’s earnings record, the SSA will change your payments to survivor benefits (if your children are receiving benefits, their benefits will be changed, too). But if you’re not yet receiving any Social Security benefits or if you’re receiving benefits based on your own earnings record, you’ll have to fill out an application for survivor benefits.

It’s helpful to have the following documents when you apply, but if you don’t have all the information required, the SSA can help you get it:

  • Proof of death (a death certificate or funeral home notice)
  • Your Social Security number, as well as the deceased worker’s number
  • Your birth certificate
  • Your marriage certificate, if you’re a widow or widower
  • Your divorce papers, if applicable
  • Dependent children’s Social Security numbers, if available
  • Deceased worker’s W-2 forms, or federal self-employment tax return, for the most recent year
  • The name of your bank, as well as your account numbers, for direct deposit

Visit the SSA website or your local SSA office or call (800) 772-1213 for more information on survivor benefits and how to apply for them.

Prepared by Broadridge Investor Communications Solutions, Inc Copyright 2018

By the Numbers

“WE’RE IN A DROUGHT – 3 states (Arizona, California and Nevada) along with Mexico receive water allotments from Lake Mead. Under current water rights agreements, if the water level at Lake Mead falls to 1,075 feet (above sea level) at the end of any year, the federal government has the right to restrict water allocations to Arizona, Nevada and Mexico. As of last Friday, the water level was 1,079 feet (source:www.lakelevels.info). –  Michael A. Higley, BTN 09-17-2018

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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