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Dorion-Gray Capital Management® Weekly Commentary July 11, 2016

| July 11, 2016
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THE MARKETS...

The S&P 500 brushed a record high but ended less than a point below its record close. For the week, the Dow rose 1.16 percent to close at 18,146.74. The S&P gained 1.33 percent to finish at 2,129.90, and the NASDAQ climbed 1.94 percent to end the week at 4,956.76.

Borrow –

Refinanced mortgages represented 71 percent of all mortgages originated (by dollar) in 2012 but are expected to represent just 40 percent of mortgages originated in 2016 (source: Mortgage Bankers Association, BTN Research).

Five Percent –

The last time the yield on the 10-year Treasury note (1.56 percent as of the close of trading on Friday, June 24, 2016) was at least 5 percent was July 19, 2007, or nearly 9 years ago (source: Treasury Department, BTN Research).

Medicare -

Per a June 22, 2016, report, the trust fund supporting Medicare Part A (hospital insurance) is projected to be depleted by 2028. The long-term (75-year) present value shortfall in the trust fund could be corrected by an immediate 0.73 percentage point increase in combined Medicare payroll taxes (from its current 2.90 percent to 3.63 percent) or an immediate 16 percent reduction in Medicare expenditures (source: Medicare Trustees 2016 Report, BTN Research).

WEEKLY FOCUS – How Student Debt Impacts Retirement

Whether you’re nearing or already into your retirement years, the cost of a college education likely has weighed or is weighing heavily on your mind. You may have had to make up for lost time while building your retirement account after funding your own or your children’s education. Or you may be wondering how your children or grandchildren will afford college.

According to the Center for Retirement Research at Boston College, 52 percent of Americans are at risk of not having enough money saved for retirement – thanks at least in part to an average student debt load of $18,000. The outlook is even more daunting for recent graduates; the average level of debt among the class of 2015 is $35,000.

Starting out with so much debt immediately after graduation can greatly hinder the amount your children or grandchildren can save for retirement. Federal student loans usually put borrowers on a standard 10-year repayment track. That’s a decade of payments that could have been put into a retirement account to grow. As if that wasn’t difficult enough, research suggests the average bachelor’s degree holder will take up to 21 years to pay student debt.

The higher student debt levels today’s young people face may force them to delay retirement well past the traditional retirement age. Millennials’ debt burden already has them buying homes later in life and waiting to start families. According to the Centers for Disease Control and Prevention, the average age for having a first child today is 26.3, compared to age 22.7 in 1980.

To help ease your child’s or grandchild’s future student loan burden, consider saving for their education in a qualified 529 Plan or a Coverdell Education Savings Account. If your loved one has already graduated, think about giving them some financial freedom through gifting strategies to help with their loans. With thoughtful planning, we can help your loved one avoid the potential burdens excessive student loans may cause so they can enjoy life beyond college and ultimately their own retirement as well.

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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