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Dorion-Gray Capital Management® Weekly Commentary August 1, 2016

| August 04, 2016
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THE MARKETS...

Wall Street ended July with heavy trading. Stocks rose Friday, and the S&P 500 hit a record intraday high. For the week, the Dow fell 0.75 percent to close at 18,432.24. The S&P lost 0.05 percent to finish at 2,173.60, and the NASDAQ rose 1.22 percent, to end the week at 5,162.13.

Most Ever –

National health care expenditures in the United States during calendar year 2016 are projected to reach $3.351 trillion, or $10,346 per person (source: Centers for Medicare and Medicaid Services, BTN Research).

Not Much Difference –

A working couple in America who make a combined $95,600 and turned 65 years old in 2015 is projected to receive $616,000 in Social Security benefits over their lifetime (a 2015 present value number), 13 percent more than the $543,000 they paid in Social Security payroll taxes (also a 2015 present value number) during their working years (source: Urban Institute, BTN Research).

Cheap Gas -

The national average price of gasoline was $2.18 a gallon as of July 22, the lowest gasoline price during any July since 2004 (source: AAA, BTN Research).

WEEKLY FOCUS – Your Social Security Checks May Be Lower Than You Think

Amid countless headlines about the projected Social Security shortfall that could necessitate a 23 percent cut in benefits by 2033, seniors are understandably frustrated by Congress’ failure to address the issue. But many future retirees aren’t aware the following factors could also diminish their Social Security income.

(1) In 2016, seniors who begin drawing Social Security before their full retirement age will see their benefits reduced by $1 for every $2 of earned income above $15,720. During the year they reach full retirement age, their benefits will be cut $1 for every $3 of earned income above $41,880 until the month they reach full retirement age. From then on, there are no reductions because of working.

(2) Legislation passed in 1983 and 1993 taxes Social Security benefits on recipients with rather modest incomes. An individual reporting income between $25,000 and $34,000 will see up to 50 percent of their Social Security benefits taxed. If their income exceeds $34,000, up to 85 percent of benefits is taxed.

(3) Medicare premiums for Part B and Part D can be greater if enrollees’ income exceeds set limits. Part B premiums can be as much as $389.80 a month for higher income individuals (based on modified adjusted gross income on their 2014 tax return). Individuals with a modified adjusted gross income of more than $85,000 in 2014 will also pay extra for Part D.

(4) A disparity between Social Security cost-of-living adjustments and increasing Medicare premiums is expected to grow. Since 2010, yearly COLA adjustments have been relatively low and at zero for three of those years. The Social Security Board of Trustees estimates the average COLA going forward will be 2.7 percent or less. But the Medicare Board of Trustees projects Part B premiums will increase by 5.76 percent annually through 2024, and Part D premiums will increase by 7.1 percent annually. According to a recent Motley Fool article, this could result in seniors paying 40 percent of their Social Security benefits to Medicare within 10 years.*

You may not be able to control legislation Congress passes affecting Social Security, but you can do your part to ensure your retirement is secure. Please feel free to call us and set up an appointment to review your portfolio and discuss your retirement goals.

Securities America and its representatives do not provide tax advice; therefore, it is important to coordinate with your tax advisor regarding your specific situation. *“Get Ready to Kiss a Majority of Your Social Security Benefits Goodbye,” http://www.fool.com/retirement/general/2016/05/21/get-ready-to-kiss-a-majority-of-your-social-securi.aspx

The Dorion-Gray Team

Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. a Registered Investment Advisory Firm. Dorion-Gray Retirement Planning is a trade name of Dorion-Gray Financial Services, Inc. located at 2602 IL Route 176, Crystal Lake, IL 60014. Dorion-Gray and the Securities America companies are separate, unaffiliated entities.

Diversification seeks to reduce the volatility of a portfolio by investing in a variety of asset classes. Neither asset allocation nor diversification guarantee against market loss or greater or more consistent returns.

© 2013. Dorion-Gray Financial Services, Inc.

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