401(k) Company Sponsors Cannot Ignore Fiduciary Duty

Inattention may open the door to liability & severe penalties.

Do your employees have a company retirement plan? If they do, then you have a fiduciary responsibility to them.

Ignoring it to any degree could really cost you.

Maybe you’ve heard about some of the settlements linked to charges of negligence or mismanagement. They can be painful for businesses big and small.

In 2010, a Fortune 500 engineering firm based in California had to pay a settlement of $18.5 million as a result of a class-action case brought by just two employees who claimed that it was making insufficient effort to reduce the account fees in its 401(k) program. In 2012, the Department of Labor recovered more than $117,000 in unremitted employer contributions (and associated lost opportunity costs) for two employee benefit plans sponsored by a Wisconsin construction firm with 25 active plan participants; its owner was forced to cough up nearly $23,000 per a court judgment.1,2

These are not isolated examples. These are just two stories plucked from a seemingly unending news feed. So what does fulfilling your fiduciary responsibility mean?

More transparency. Because of new Department of Labor regulations, plan participants have to be issued a detailed breakdown of fees and expenses pertaining to their accounts. You must also disseminate investment instructions to them per updated Department of Labor regulations.

While every employer-sponsored retirement plan must have a named fiduciary, it is important to realize that fiduciaries are also determined by function. That is, while the plan document might not name John X. Person as a fiduciary, if John X. Person participates in the management or administration of the plan or hires a service provider, these are considered fiduciary functions by the DoL.3

The plan’s investment processes must also be documented, so that you have clear evidence that things are operating according to stated procedure. In addition to a Summary Plan Description (SPD), an Investment Policy Statement (IPS) is also essential: it can define the plan’s investment program and establish formal criteria for monitoring, comparing and evaluating performance results of various investment options over time. Input from a Registered Investment Advisor is critical here.3

Sufficient participant education. A retirement plan will be undervalued and underutilized without an effective employee education program. For legal reasons alone, your employees have to understand the investment options the plan presents and the fees and risks associated with each one. This can’t be given short shrift and an investment professional should be called in to help explain the options as well as the potential role the plan can play in an employee’s overall retirement savings effort.3

Compliance. Most administrators of workplace retirement plans are required to file a Form 5500 Annual Return/Report with the federal government – a disclosure made available to the U.S. Department of Labor, the Internal Revenue Service, the Pension Benefit Guaranty Corporation, and by extension the public.3

Plan providers need to be monitored, too. You don’t want the wrong kinds of investments creeping into the plan and you want to watch for changes in the way a plan provider is compensated, changes in the fees affecting plan participants, and more.

This is just the tip of the iceberg. There is so much to watch over in the typical employer-sponsored retirement plan that little details can easily be missed – and they may lead to big headaches for your business.

Don’t risk lawsuits or five- or six-figure settlements. Don’t open the door to liability. Do the right thing, do the smart thing – turn to an experienced, professional third party that can play a fiduciary role for assistance.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – http://www.plansponsor.com/Bechtel_Settles_401%28k%29_Fee_Case_for_18_5_Million.aspx [10/14/10]

2 – http://www.dol.gov/ebsa/newsroom/2012/12-2319-CHI.html [12/5/12]

3 – http://www.irs.gov/publications/p560/ch04.html#en_US_publink10008978 [11/13/12]

Albert Aizin is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com. 

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Albert Aizin and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, Hughes, ING Retirement, Bank of America, Raytheon, Alcatel-Lucent, Merck, Qwest, Chevron, Verizon, Northrop Grumman, AT&T, ExxonMobil, GlaxoSmithKline, Pfizer, or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

 

 

Social Security Claiming Strategies

What can married couples do to increase joint lifetime benefits?

 What is your “magic number”? Roughly half of retirees claim Social Security benefits at age 62, as soon as they become eligible. Some people delay benefits and postpone using their retirement savings as an income source. Others apply out of necessity; their financial situation leaves them little choice.1

These factors aside, what if you have a choice? If you wait a few years to apply for Social Security, how much more income might you realize?

Could you wait until age 66? The Social Security Administration has made 66 the “full” retirement age for people born during 1943-1954. If you were born in this period and you apply for Social Security at age 62, you will reduce your retirement benefit by 25% and your spouse’s by 30%.2,3

That alone might convince you to wait. In addition, there are claiming strategies that may bring spouses much greater cumulative lifetime Social Security income, and they depend on one spouse waiting until age 66 to apply for benefits.

That may be the time for a file & suspend strategy. This tactic positions a married couple to receive maximum Social Security benefits at age 70, with one spouse being able to claim some benefits at age 66. 

An example: Terry was born in 1947 and Teresa was born in 1951, so full retirement age is 66 for both of them. Terry files his claim for Social Security benefits at age 66, but then he elects to suspend his $2,000 monthly retirement benefit. Doing that clears the way for Teresa to get a $1,000 monthly spousal benefit when she reaches 66; she can do this by filing a restricted claim for spousal benefits only at that time.4

So while some spousal benefits are rolling in, Terry and Teresa have both elected to put off receiving their own Social Security benefits until age 70. That allows each of them to rack up delayed retirement credits (8% annually) between 66-70. So when Terry turns 70, he is eligible to collect an enhanced benefit: $2,640 per month instead of the $2,000 per month he would have received at age 66. At 70, Teresa can switch from receiving the $1,000 monthly spousal benefit to collecting her enhanced benefits.1,4

Variations on file & suspend. There are other ways to do this. For example, 66-year-old Terry could initially apply for Teresa’s spousal benefits as Teresa applies for her own benefits at 62. Terry thereby gets $800 a month while Teresa receives her own reduced benefit of $1,200 a month. At 70, Terry foregoes getting the spousal benefit and switches to receiving his own enhanced benefit ($2,640 a month thanks to those delayed retirement credits). If Terry lives to age 83 and Teresa lives to age 90, their total lifetime Social Security benefits will be $1,043,520 under this strategy, as opposed to $840,600 if they each apply for benefits when they turn 62.1

Widows can also use a variant on the file-and-suspend approach. As an example, Fran is set to receive $1,400 monthly from Social Security at age 66. Her husband dies when she is 60. She can get a widow’s benefit of $1,430 at 60, but instead she claims her own reduced benefit of $1,050 at age 62, then switches to a widow’s benefit of $2,000 at 66 (her husband would

have received $2,000 monthly at age 66). By doing this, she positions herself to collect $112,000 more in lifetime benefits.1

Postponement can also be used to enlarge survivor benefits. Let’s go back to Terry and Teresa: if they each start getting Social Security at 62, Teresa is looking at a $1,650 monthly survivor benefit if Bob passes away. But if Terry waits until 66 to claim his benefits, Teresa’s monthly survivor benefit would be $2,640.1

Details to note. The file-and-suspend strategy is only allowable if one spouse has reached full retirement age. In order for you to claim a spousal benefit, your husband or wife has to be getting Social Security benefits. Applying for Social Security before full retirement age with the idea that your spouse can collect spousal benefits at 62 has a drawback: you are reducing both of your lifetime retirement benefits.5

Only 29% of respondents in a 2012 AARP survey knew that waiting until age 70 to apply for Social Security would bring them their maximum monthly benefit. Congratulate yourself for being in that group, and consider the long-range financial merits of claiming your benefits years after age 62.6

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.   

Citations.

1 – http://www.smartmoney.com/retirement/planning/strategies-to-max-out-social-security-benefits-1329243329517/ [3/2/12]

2 – http://www.ssa.gov/retire2/retirechart.htm [11/15/12]

3 – http://www.ssa.gov/retire2/agereduction.htm [11/15/12]

4 – http://www.investmentnews.com/article/20121105/BLOG05/121109984 [11/5/12]

5 – www.nextavenue.org/article/2012-08/how-avoid-making-social-security-mistakes [8/6/12]

6 – http://www.aarp.org/about-aarp/press-center/info-02-2012/new-aarp-survey-shows-many-unaware-of-social-security-claiming-strategies.html [2/29/12]

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, Hughes, AT&T, Merck, Alcatel-Lucent, Pfizer, ING Retirement, GlaxoSmithKline, Northrop Grumman, Verizon, ExxonMobil, Bank of America, Chevron, Raytheon, Qwest, or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Albert Aizin is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com. 

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Albert Aizin and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

 

 

Will the Syria Crisis Shock the Markets?

Are fears of a correction & runaway oil prices overblown, or justified?                

U.S. military action in Syria appears imminent. Assuming it happens, what happens to the financial markets?

Investor reaction on August 27 (the day U.S. intervention was mentioned as a possibility) was not exactly surprising. Gold entered a bull market again, oil prices reached a six-month peak (surpassing $109 a barrel), the Dow fell 170 points and the CBOE VIX rose 12%. Overseas markets broadly slumped; emerging market stocks hit a 7-week low. India’s rupee fell to a record low versus the dollar. The yield of the 10-year Treasury dipped to 2.72%, decreasing for a third straight day. All of this left market analysts with major questions to consider.1

Will oil hit $150 a barrel? While U.S. investors keep an eye on the NYMEX, the international benchmark is Brent crude. Some analysts do see Brent crude hitting $120-125 in the coming weeks – Michael Wittner, global head of oil research for Societe Generale, told CNBC that he believes that will happen, in the event of military intervention. Wittner also thinks that Brent crude has about a 20% chance of pushing past $150, but not wholly on what goes on within Syria. “Our big worry is Iraq. The Sunni vs. Shiite conflict in Syria has a direct parallel in Iraq, and the violence in Iraq has reached levels not seen since 2008,” Wittner wrote in a note to investors. A key oil pipeline in northern Iraq ferrying oil to Turkey has endured multiple attacks since May, severely hampering Iraq’s daily oil exports. Other analysts worry about attacks on pipelines in Saudi Arabia.2

On the other hand, U.S. oil output is at a 20-year peak, and Saudi Arabia and other major players in the oil market could tap strategic reserves or increase production in response to a short-term price spike. As business and consumer demand for oil and gasoline typically weaken at some point in response to price hikes, prices would likely moderate.2

Greg Priddy, director of global oil at Eurasia Group, told CNBC that he doesn’t see a big disruption in the oil market ahead – he envisions a “very limited attack” that is “not going to change the situation in the region right now.” As toppling Bashar al-Assad’s government could put rebels in charge but also risk opening a door to al-Qaeda, the view of some analysts – Brent crude temporarily hovering around $120, U.S. oil prices keeping below that level – may prove correct. “This would have to turn into a region-wide conflagration in order for prices to stay [at that level],” John Kilduff of Again Capital remarked to CNBC. “If rockets start flying into Gaza and into Israel and other things happen, such as an attack on Saudi Arabia, all bets are off.”2

Would U.S. stocks plunge? The Dow is on pace for a decline of more than 5% in August, so bears wonder if a correction is in progress. No one has a crystal ball, but it is true that the U.S. equity markets have weathered geopolitical crises well in the recent past. Our stock market rose in the year prior to our military’s involvement in Libya in March 2011, fell  that summer, then rose again. The fall coincided with the debt ceiling struggle on Capitol Hill, not the unrest in Libya. In the case of the Persian Gulf War and the War in Iraq, U.S. stocks were in the doldrums in the quarters preceding the fighting yet rose about the time hostilities began.3

As MarketWatch columnist Mark Hulbert commented this week, “Rising interest rates and above-average valuations are a bigger threat to the stock market than the possibility of U.S. military action in Syria.” Opening a wide historical window, he cites a fundamental article from the Journal of Portfolio Management co-authored by none other than Larry Summers, who stands a chance of being our next Federal Reserve chairman. It looked at the impact of 49 major geopolitical events on the stock market from 1941 to 1987, measuring the S&P 500’s absolute return on those momentous days (Pearl Harbor, the assassination of JFK, etc.). The S&P’s average movement across those 49 days was 1.46% : significant, but not radically removed from the average 0.56% variance occurring  across all other market days in a 46-year period. For the record, the S&P rose 0.60% on August 28 while the CBOE VIX dipped 3.6% to 16.17.3,4

Could this crisis make the Fed reconsider tapering? Recent days have seen a real flight to quality – to gold, to the dollar, to Treasuries.  You have a couple of currencies seemingly in freefall: the Indian rupee and the Turkish lira. For that matter, Brazil’s real recently hit a five-year low versus the greenback. Indonesian stocks just dropped 5% in a single market day. In short, some key emerging markets/developing economies are having it rough – and a lack of economic growth in those nations may not bode well for America. If the trouble in Syria worsens and leads to further trouble for them, some analysts think the Fed might postpone the careful unwinding of QE3 – either out of caution, or out of global economic necessity.5

The takeaway? As Ron Florance, a deputy CIO at Wells Fargo Private Bank in Scottsdale, Arizona, told Reuters on August 28: “Yesterday was a little overdone but investors need to be ready [and realize] that volatility is going to be here for a while.” Just think twice before letting short-term volatility affect long-term investment plans.4

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – marketwatch.com/story/syria-intervention-fears-hit-global-markets-2013-08-27 [8/27/13]

2 – tinyurl.com/pjxsoau [8/28/13]

3 – marketwatch.com/story/what-us-intervention-in-syria-would-mean-2013-08-28 [8/28/13]

4 – reuters.com/article/2013/08/28/markets-global-idINL2N0GT1BA20130828 [8/28/13]

5 – marketwatch.com/story/syria-emerging-market-crisis-will-stop-the-taper-2013-08-28 [8/28/13]

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, GlaxoSmithKline, Northrop Grumman, AT&T, Bank of America, Verizon, Pfizer, Chevron, Merck, ING Retirement, Raytheon, Hughes, Alcatel-Lucent, ExxonMobil, Qwest, or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Albert Aizin is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

 

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Albert Aizin and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

Financial Responsibilities of a Caregiver

Key questions for you & your family to consider.

A labor of love may come to involve money issues. Providing eldercare to a parent, grandparent or relative is one of the noblest things you can do. It is a great responsibility, and over time it may also lead you and your family to reflect on some financial responsibilities. Here are some questions to consider.

Q: How will caregiving affect your own financial picture? Try to estimate a budget, either before you begin or after a representative interval of caregiving. How much of the elder’s finances will be devoted to care costs compared with your finances? If you are thinking about quitting a job to focus on eldercare, think about the resulting loss of income, the probable loss of your own health care coverage, and your prospects for reentering the workforce in the future.

Q: How much will “aging in place” cost? Growing old at home (rather than in a nursing home) has many advantages. Unfortunately, over time, the cost of care provided in the home can greatly exceed nursing home services. So you must weigh how long you can manage with home health aide services versus adult day care or nursing home care.

Q: How much do you know about your loved one’s financial life? Caring for a parent, grandparent or sibling may eventually mean making financial decisions on their behalf. So you may have a learning curve ahead of you. Specifically, you may have to learn, if you don’t already know:

– Where your loved one’s income comes from (SSI, pensions, investments, etc.)

– Where wills, deeds and trust documents are located

– Who the beneficiaries are on various policies and accounts

– Who has advised your loved one about financial matters in the past (financial consultants, CPAs, insurance agents, etc.)

– Assorted PIN numbers for accounts and of course Social Security numbers

Q: Is it time for a power of attorney? If a loved one has been diagnosed with Alzheimer’s or any form of disease which will eventually impair judgment, a power of attorney will likely be needed in the future. In fact, if you try to handle money matters for another person without a valid power of attorney, the financial institution involved could reject your efforts.1

When a power of attorney is in effect, it authorizes an “agent” or “attorney-in-fact” to handle financial transactions for another person. A durable power of attorney lets you handle the financial matters of another person immediately. A springing power of attorney only lets you do this after a medical diagnosis confirms a person’s mental incompetence. (As no doctor wants a lawsuit, such diagnoses are harder to obtain than you might think.)1

You want to obtain a power of attorney before your loved one is unable to make financial decisions. Many investment firms will only permit a second party access to an account owner’s invested assets if the original account owner signs a form allowing it. Copies of the durable power of attorney should be sent to any financial institution at which your parents have accounts or policies. Whoever becomes the agent should be given a certified copy of the power of attorney and be told where the original document is located.2

Q: Is it time for a conservatorship? A conservatorship gives a guardian the control to manage the assets and financial affairs of a “protected” person. If a loved one becomes incapacitated, a conservator can assume control of some or all of the protected party’s income and assets if a probate court allows.3

To create a conservatorship, you must either request or petition a probate court, preferably with assistance from a family law attorney. A probate court will only grant conservatorship after interviews and background check on the proposed conservator and only after documentation is provided to the court showing financial and mental incompetence on the part of the individual to be protected.3

A conservatorship implies more vigilance than a power of attorney. With a power of attorney, there is no ongoing accountability to a court of law. (The same goes for a living trust.) There is little to prevent an attorney-in-fact from abusing or neglecting the protected person. On the other hand, a conservator must report an ongoing accounting to the probate court.4

Q: If a trust is created, who will serve as trustee? As some carereceivers acknowledge their physical and mental decline, they decide to transfer ownership of certain assets from themselves to a revocable or irrevocable trust. A settlor (or grantor) creates a trust, a trustee manages it and the assets go to one or more beneficiaries. (The trustee can be a relative; it can also be a bank or an attorney, for that matter.) At the settlor’s death, the trustee distributes the settlor’s assets according to the instructions written in the trust document. Probate of the trust assets is avoided – so long as the assets have been transferred into the trust during the settlor’s lifetime.4

A trustee has a fiduciary responsibility to watch over the financial legacy of the settlor. Practically speaking, a trustee needs to have sufficient financial literacy to understand tax law, the managing of investments and the long-range goals noted in the trust document. Some families consider all this and opt to manage trusts themselves; others seek the services of financial professionals.

If the carereceiver has a living trust or another form of trust already, you may still need a power of attorney as percentages of his or her assets or income may not end up in the trust. (There is nothing from preventing a trustee from also being the agent in a power of attorney.) Additionally, while a living trust is essentially a will substitute, you will still need a pour-over will to supplement it. That is because in all probability, some of the settlor’s assets won’t be transferred into the trust during his or her lifetime. A pour-over will is the legal mechanism that “pours” those stray assets into the trust when the settlor passes away. If 100% of the settlor’s assets are transferred into the trust during the settlor’s lifetime, a pour-over will becomes superfluous.4

Q: Finally, do you understand the potential for liability? As a caregiver, you have a physical, psychological and legal duty to the carereceiver. If you neglect that duty, you could be held liable as many states have laws demanding that caregiving meets certain standards.

These laws are basically similar: a caregiver must not abuse the carereceiver in any conceivable way, and any incidents of such abuse must be reported (there are often state and local “hotlines” set up for this). The elder must have adequate nutrition, clothing and bedding, and the environment must be clean and not pose health hazards.

If you have obtained a power of attorney for finances, then appropriate amounts of the elder’s money must be spent on necessary health services and other services on behalf of his/her well-being. Failure to do so could be interpreted in court as a form of abuse or neglect.

When abuse and neglect occur, they may have roots in caregiver burnout – the caregiver is constantly cross and irritable with the carereceiver, or stress defines the experience, or an overwhelming sense of duty or anxiety prevents the caregiver from having a life of his/her own. If you ever feel you are approaching this point, it is time to call for assistance or to assign caregiving to professionals.

Useful URLs. Some good websites can help you connect to great resources: try the U.S. Administration on Aging’s Eldercare Locator (eldercare.gov), the National Council on Aging’s online benefits checklist service (benefitscheckup.org) and the National Association of Area Agencies on Aging (n4a.org/about-n4a/?fa=aaa-title-VI).5

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – http://www.law-business.com/powers-of-attorney [4/27/12]

2 – http://www.kiplinger.com/article/retirement/T066-C000-S002-managing-your-parents-money.html [3/11]

3 – dhs.sd.gov/gdn/guardianshipfaqs.aspx [6/2/12]

4 – http://www.caregiver.org/caregiver/jsp/content_node.jsp?nodeid=434 [1/15/13]

5 – money.usnews.com/money/blogs/the-best-life/2011/07/18/10-tips-for-caring-for-aging-parents [7/18/11]

Albert Aizin is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Albert Aizin and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, Merck, ING Retirement,  Chevron, Hughes, Northrop Grumman, AT&T, Raytheon, Qwest, Verizon,  Pfizer, ExxonMobil, Bank of America, GlaxoSmithKline, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

 

 

Weekly Economic Update for September 2, 2013

Weekly Economic Update for September 2, 2013

September 2, 2013    

Q2 GDP REVISED UP, CONSUMERS SPEND A BIT MORE

Personal spending and personal incomes each rose 0.1% in July, the Commerce Department stated Friday. The tiny household spending advance fell short of the 0.3% increase forecast by economists polled by Bloomberg. In better news, the Commerce Department adjusted its estimate of Q2 GDP to 2.5% last week, much better than its original 1.7% assessment.1,2

A MIXED PICTURE OF CONSUMER CONFIDENCE

The Conference Board’s August consumer confidence index unexpectedly rose half a point to 81.5 this month (although the survey data was compiled prior to the chemical attack against civilians in Syria). In contrast, the final August consumer sentiment index from the University of Michigan came in at 82.1, a 4-month low.1,2

PENDING HOME SALES, HOME PRICE GAINS MODERATE

July saw a 1.3% decline in housing contract activity, according to the National Association of Realtors. The June edition of the S&P/Case-Shiller Home Price Index recorded a 12.1% overall annualized increase in home values and a 0.9% overall monthly rise in prices (the smallest monthly gain since November).2,3

HARD GOODS ORDERS DIP 7.3% FOR JULY

Economists did not see this coming. The Commerce Department announced the biggest one-month descent in the indicator in a year last week, with core durables (minus defense and airplane orders) slipping 3.3%.4

GOLD & OIL PRICES SURGE, STOCKS SLIP

With U.S. military intervention in Syria appearing close at hand, NYMEX crude ended the week up at $107.65, going +2.24% for August. Gold settled at $1,396.10 Friday; it entered a bull market once again, rising 5.26% on the month. Stocks declined: the Dow went -1.33% on the week to close at 14,810.31 Friday, and the NASDAQ (-1.86% to 3,589.87) and S&P 500 (-1.84% to 1,632.97) followed suit.5,6

THIS WEEK: Monday is Labor Day; U.S. financial markets are closed. The August ISM manufacturing index comes out Tuesday, as well as earnings from H&R Block. Wednesday sees the release of a new Federal Reserve Beige Book and Q2 results from Dollar General. Thursday brings the latest round of initial jobless claims, a new ADP employment report and Challenger job-cut report, the July factory orders report and the ISM non-manufacturing index for August; a two-day G20 summit also begins. Friday, the Labor Department issues unemployment figures for August and Smithfield Foods and Mattress Firm announce earnings.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +13.02 +13.92 +5.66 +5.73
NASDAQ +18.89 +17.75 +10.33 +9.83
S&P 500 +14.50 +16.68 +5.46 +6.20
REAL YIELD 8/30 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.68% -0.63% 1.68% 2.29%

Sources: cnbc.com, bigcharts.com, treasury.gov – 8/30/136,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The 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 Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – bloomberg.com/news/2013-08-30/consumer-spending-in-u-s-increased-in-july-for-a-third-month.html [8/30/13]

2 – bloomberg.com/news/2013-08-29/consumer-comfort-in-u-s-declines-to-a-more-than-four-month-low.html [8/29/13]

3 – usatoday.com/story/money/business/2013/08/27/case-shiller-index-june/2705137/ [8/27/13]

4 – online.wsj.com/article/BT-CO-20130826-706196.html [8/26/13]

5 – money.cnn.com/data/commodities/ [8/30/13]

6 – tinyurl.com/p4put9e [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F30%2F12&x=0&y=0 [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F30%2F12&x=0&y=0 [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F30%2F12&x=0&y=0 [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F29%2F08&x=0&y=0 [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F29%2F08&x=0&y=0 [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F29%2F08&x=0&y=0 [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F29%2F03&x=0&y=0 [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F29%2F03&x=0&y=0 [8/30/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F29%2F03&x=0&y=0 [8/30/13]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/30/13]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/30/13]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Albert Aizin and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

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