Stocks were mixed Friday, but the three major indexes rose for a third consecutive week amid encouraging economic news. Retail sales grew more than expected in August. Central banks took economic stimulus measures. President Trump agreed mid-week to delay an added increase in tariffs on Chinese goods, and Beijing added some agricultural products to its list of imports exempted from tariffs. For the week, the Dow rose 1.65 percent to close at 27,219.52. The S&P gained 1.02 percent to finish at 3,007.39, and the NASDAQ climbed 0.91 percent to end the week at 8,176.71.
Returns Through 9/13/19
Dow Jones Industrials (TR)
NASDAQ Composite (PR)
S&P 500 (TR)
Barclays US Agg Bond (TR)
MSCI EAFE (TR)
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.
Most of Them — The sales of existing homes account for 90 percent of all homes sales in the United States (source: Treasury Department, BTN Research).
How Did You Do? — An average single-family home in America increased in value by 5 percent over the one-year period from June 30, 2018, to June 30, 2019; by 5.9 percent per year over the last five years from June 30, 2014, to June 30, 2019; and by 3.6 percent per year over the last 10 years from June 30, 2009, to June 30, 2019 (source: Federal Housing Finance Agency, BTN Research).
The Most Paid — The maximum Social Security benefit paid to a worker retiring at full retirement age in 2019 was $2,861 per month, more than triple the $899 per month paid 30 years ago in 1989 (source: Social Security, BTN Research).
WEEKLY FOCUS – Don’t Underestimate These Retirement Expenses
Underestimated costs during retirement can be avoided by careful planning today. Consider these often-underestimated retirement expenses when planning for your future.
Healthcare: Healthcare can be expensive at any age, especially after retirement. One underestimated expense is long-term care (LTC). Roughly 70 percent of retirees will eventually need it – but Medicare doesn’t cover LTC, according to the Department of Health and Human Services. The average person who needs LTC requires it for about three years. At around $81,600 per year, that’s nearly a quarter of a million dollars – out of pocket. And even if you intend to age in place and never need LTC, you might still require home health services.
Housing: Speaking about aging in place, housing is another underestimated expense. Even if you own your home, the peripheral costs of home ownership continue into retirement. One-third of household spending by retiree-age owners is related to housing, including rent or mortgage; insurance and property taxes; renovations and repairs; and maintenance, including housekeeping, food preparation and lawn services.
Transportation: Retirement from your present career may eliminate long commutes, even the need to own a car. But contemporary retirees are much more active and involved than their predecessors. Transportation still plays a role as new careers, hobbies and lifestyles keep older generations vital and connected – and out of the house. It’s possible your transportation expenses will decrease, but perhaps not as much as you anticipated.
Taxes: Taxes are one of the few sure things in life before retirement. You can bet they’ll remain so after you retire. Before, you were taxed on the pay check you brought home from your employer. Now that you’re retired, you’ll be taxed on the “pay check” you bring home – from yourself. Some of your income, like payouts from your 401k or traditional IRA accounts, will be taxed. Your Social Security benefits may also be subject if you have substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) or if you live in certain states. If you own a home, you’ll still be responsible for taxes assigned to it.
Retirement should be a rewarding part of life. Call our office today; we can make sure your financial plan provides you a path to the future you envision.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright September 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2731634.1