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Dorion-Gray Capital Management® Weekly Commentary May 31, 2016

| June 02, 2016
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Stocks rose Friday after the U.S. Federal Reserve suggested an upcoming interest-rate hike, closing Wall Street at its strongest week since March. Markets were closed Monday in observation of Memorial Day. For the week, the Dow rose 2.15 percent to close at 17,873.22. The S&P gained 2.32 percent to finish at 2,099.06, and the NASDAQ climbed 3.44 percent to end the week at 4,933.50.

How We Spend –

Internet and catalog sales (aka “non-store retailers”) totaled $45.2 billion in April 2016, an increase of 10.2 percent over sales from April 2015. Overall retail sales totaled $453.4 billion in April 2016, an increase of 3 percent over sales from April 2015. Thus, internet sales are growing more than three times as fast as total sales but represent just 10 percent of total retail sales nationwide (source: Commerce Department, BTN Research).

Many Years, No Change –

The Social Security payroll tax rate paid by employees has been 6.2 percent since 1990 except for a 2 percent reduction in the rate during the two years of 2011-12 (source: Social Security Administration, BTN Research).

The Last Year -

The S&P 500 achieved its all-time closing high on May 21, 2015 (i.e., 1 year ago). In the 12 months since peaking at 2,131, the S&P 500 has fallen 1.6 percent on a total return basis (source: BTN Research).

WEEKLY FOCUS – Growing Your Retirement Funds Faster

Recent market volatility may have left you staring at your 401(k) in dismay. If you’re not seeing the results you want, there are ways to help grow your 401(k) faster.

Of course, the most obvious solution would be to contribute more. If you get a raise – raise your contribution amount. Hopefully, you’re already taking advantage of “free money” and contributing the full amount your employer matches, but you can always go above that amount as well. Apply any windfall money you come across, including work bonuses, to your retirement accounts. And if you leave your job, don’t leave your 401(k) behind. Rollover your 401(k), and you can avoid many administration fees or other expenses.

Growing your retirement nest egg quickly usually requires much more than just funding your 401(k). Opening a Roth IRA will allow you to build potentially tax-free savings – up to $6,500 annually if you’re 50 or over – in addition to your tax-deferred employer plan.

A Health Savings Account (HSA) is another vehicle that can be used to increase your retirement savings. HSAs offer great tax advantages, with no taxes levied on contributions, earnings and withdrawals for qualified health care purchases. Even if you’re relatively healthy, you’ll still need funding for even basic or preventative health care along the way. And any funds left in your HSA after age 65 can then be used for nonmedical expenses as well.

As with all retirement accounts, it’s best to wait until retirement to tap into your HSA. That way – should you be forced to retire earlier than expected – you’ll still have tax-free funding available to cover health care expenses.

Funding your retirement goes well beyond your employer-sponsored 401(k) account. By looking at other tax-friendly savings vehicles, you can potentially save for retirement quicker and possibly save even more overall. To review your retirement savings plan and ensure you’re taking advantage of all the savings vehicles available to you, 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.

© 2013. Dorion-Gray Financial Services, Inc.

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