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Dorion-Gray Capital Management® Weekly Commentary March 13, 2017

| March 13, 2017
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THE MARKETS...

Stocks rose Friday following a February jobs report that far exceeded expectations. However, indexes still finished lower for the week, ending six weeks of gains for the S&P 500 and NASDAQ. For the week, the Dow fell 0.40 percent to close at 20,902.98. The S&P lost 0.40 percent to finish at 2,372.60, and the NASDAQ dropped 0.15 percent to end the week at 5,861.73.

Borrowing Every Week –

Through the first two months of 2017 (i.e., through Feb. 28), the Treasury Department conducted weekly auctions in which it borrowed $1.09 trillion. The duration of the debt ranges from four weeks to 30 years (source: Treasury Department, BTN Research).

Very Rich Plan –

Defined benefit pension plans can be funded to produce an annual benefit at retirement as high as $215,000, up from $180,000 in 2007 (source: Internal Revenue Service, BTN Research).

High, Low and Average -

The national unemployment rate as of Dec. 31, 2016, was 4.5 percent. Ames, Iowa (2.1 percent) had the lowest unemployment rate while El Centro, Calif. (18.8 percent) had the highest (source: Department of Labor, BTN Research).

WEEKLY FOCUS - Save Now, Save Later

Thanks to today’s longer life expectancies and rising healthcare costs, experts suggest baby boomers shoot for a retirement nest egg of $1 million or more and tell millennials they may need closer to $2 million. Both generations, along with the traditionalists and the Gen Xers, are admonished to save intentionally and diligently so they can enjoy a comfortable retirement.

But the mindset that you work and save and work and save, and then enjoy a life that’s everything you ever dreamed of can create problems. The importance of saving during retirement may not be stressed enough. How we define “comfortable” may need to be adjusted.

In fact, lifestyle creep often sets in before retirement when people are in their 50s. After working hard for decades and sacrificing for their children, it’s not surprising they feel like kicking up their heels and upping their standard of living once the kids are through college (and hopefully out of the house). The problem is, maintaining that lifestyle may be difficult during retirement.

Once retirement begins, additional free time can magnify the urge to splurge. Although the general expectation is that normal retirement living expenses will be around 80 percent of preretirement income, many individuals spend more, at least initially, rather than scaling back. According to the Employee Benefit Research Institute, half of households spend more money during the first two years of retirement than while they were working.

But the budgeting skills that allowed individuals and couples to save for retirement are still important post-retirement. That’s why it’s usually best not to change your lifestyle too soon after retiring. It may be tempting to buy a vacation home or a large RV or move closer to grandchildren. It’s probably wiser to stop to relish your newfound freedom to volunteer, pursue hobbies, connect with friends, learn something new or read things you never had time to – and wait a year before making a major change. When you do make plans, aim to reduce expenses by whatever percentage your income in retirement drops.

Ultimately, when it comes to retirement, how much you need depends on what you spend. Some costs, such as a health crisis or the need for long-term care, may be beyond your control. But in many other areas, living richly doesn’t require extravagant spending. To review your pre- or post-retirement savings plan, contact our office today.

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.

© 2017. Dorion-Gray Financial Services, Inc.

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