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I am 68 years old, my husband is terminally ill, and his $3 million estate is going to his son. I want to spend the rest of my days traveling – do I have enough money?

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Please help me. I am a 68 year old woman who has been married for 17 years to the love of my life. Our finances have always been separate, and I signed a prenuptial agreement acknowledging that his son would inherit his co-owned estate in a living trust (about $3 million). I get our house, and he leaves me $350,000 in his will.

The husband took a lump sum Social Security payment before we met. We’ve always lived debt free, and I have a nice 2020 car. While I live a modest lifestyle, his health has prevented us from enjoying a vacation for eight years. I am keen to travel more in the future. My husband is terminally ill and will likely only live a year or two. His medical bills are not my responsibility.

In 2019, we built a new house. Although its exact value is unknown, I will probably survey $800,000 for this asset, and expect to purchase a smaller house upon his death.

I get Social Security and a pension, and now I make about $20,000 a year. I have been an aspirational saver and have now reached about $350,000 to earn good money from my joint funds. The other shares are about $20,000, and I have 457 accounts worth $65,000. I have $60,000 in savings and $20,000 is currently in check.

I’ve never removed a dime from my investment, and I doubt much will change that it would take for me to be alone. My husband pays for our living expenses now. My goal is to enjoy the rest of my life, and leave as much money as possible to my four siblings.

Sounds good to me, but I’ve been taking the risk of keeping my savings in stocks to earn a realized annual return of over 15% in the last decade. And I don’t have long term care insurance.

Can I expect to live my life in good financial health?

dear reader,

I am so sorry to hear of your husband’s illness. This is a difficult experience to live through. I’m glad to see you plan your finances after his death – it will save you a lot of headaches besides heartbreak, and give you stability and security in your older age.

To arrive at your answer, you will have to do some serious analysis of your current and projected future expenses. Keep in mind, however, that anything can change in a few years, or even a year, so be flexible when determining your finances for the future.

First, create a plan (some might call it a budget), said Robert Gilliland, managing director and chief wealth advisor at Concenture Wealth Management. Consider Every account is possible You are expecting after the death of your husband, my accounts inflation like that. You can break these expenses down into the short term, like one to five years, the medium term, which would be six to ten years, and the long term, or more than 10 years. Include projected housing expenses, and perhaps plan whether to stay in your current home or find something smaller. Also think about health care, which is a major potential expense in any retiree’s budget; services; emergency expenses; meal or occasional entertainment; and so on.

do not miss: Nervous about saving for retirement? Focus on your “bottom line”.

Also read: We’re in our late 50’s and retired on less than a million dollars: “Did you jump the gun?”

After completing this analysis, look at what you have expected sources of income We are. You mentioned Social Security and the pension, and you can make regular withdrawals from your investments. Compare your income to your expenses. “Once you have that number, you can determine a ‘reasonable’ drawdown rate on the assets to determine the excess funds available for travel,” Gilliland said.

A note about your investments: Advisors use this group approach with investments, in which case it is common to see medium and long term needs invested with more risk. You mentioned that your savings are under a lot of risk right now, however, and you should consider speaking with a financial advisor—even one who has your money in them—to see if this might be the right asset allocation for you. If you are going to live on a fixed income, you cannot afford to lose much in your portfolio. Diversification and proper personalization will be the keys to your success. “Ultimately, being able to ensure funds are available to meet their needs should be the most important,” Gilliland said.

He, too, reached out to the Office of the Social Security Administration to begin planning for other potential benefits you might qualify for, like a widow’s benefit, said Jude Boudreaux, a certified financial planner and partner at the Planning Center. You might even get more money each month as a result, depending on whether your survivor benefit is higher than yours, and it doesn’t hurt to start understanding the benefits or the numbers now. You may be on hold at the Social Security Administration for hours when you call, but it will be worth it. (Here’s more information about Surviving benefits from SSA.)

Check out the MarketWatch column retirement hacks For practical advice on your retirement savings journey.

You mentioned that you do not have long-term care insurance. This can be very expensive, especially since you’re a little older than the typical “ideal” candidate (advisers often suggest that people start looking for long-term care insurance in their 50s). It may make sense for you not to hurt to look for some policies, but know that there are other options for you as well, such as hybrid policies that can offer you long-term care and a possible death benefit for you. Brothers. Some pensions have long-term care riders, though you should check these out thoroughly before jumping in. (to you Comprehensive guide on long-term care insurance to see.)

This isn’t financial advice, but it’s still important: stay active and take your health seriously. Take long walks, try to maintain a healthy diet, and stay in touch with your loved ones—now that your spouse has passed away. These daily activities make all the difference for the older years.

See also: The millions you save for retirement aren’t worth much if you’re not healthy enough to enjoy them

Here are some other suggestions. Gilliland said he always recommends taking a year before deciding whether or not to move on after the loss of a spouse, because this is a very emotional time and people may make decisions they will eventually regret.

You may want to start doing some math now and talk to your husband to get his input. You mentioned a prenuptial agreement, but those do not prevent someone from gifting to their wives during the marriage. If the trust you’re referring to is an inter-living trust, or a revocable trust, your spouse can give you some of the money now without tax consequences while he’s still alive. Of course, this may seem like a difficult situation, and in no way is this suggestion meant to stir up any drama between you and your husband and his son, but it never hurts to ask your husband what he thinks, Boudreau says. “It’s worth exploring.”

In the end, you seem to be very conscientious about your money, and that will definitely help you later on. Just try to think of everything you might need, financially and otherwise, so you won’t be surprised when your husband passes on. And be sure to have multiple conversations between you and him about what he thinks you should know after he’s gone — anything from bank account passwords to small tasks he might usually take charge of around the house.

I wish you all the best.

Readers: Do you have suggestions for this reader? Add them in the comments below.

Do you have a question about your retirement savings? Email us at HelpMeRetire@marketwatch.com

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Stock, bond and cryptocurrency investors remain on edge after a rough year for the markets

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This version is for personal, non-commercial use only. Distribution and use of this material is subject to our Subscriber Agreement and copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.

https://www.wsj.com/articles/stock-bond-and-crypto-investors-remain-on-edge-after-brutal-year-for-markets-11672403124

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Dow Jones losses are heading towards the closing bell as US stocks approach their worst year since 2008

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US stocks were trimming losses heading towards the closing bell on Friday, but were still on track to post their worst annual loss since 2008, as the harvest of tax losses combined with concern over the outlook for US corporate and consumer earnings took its toll.

How are stock indices traded?
  • Dow Jones Industrial Average
    DJIA,
    -0.22%

    It fell about 182 points, or 0.6%, to 33,039 points.

  • S&P 500 index
    SPX,
    -0.25%

    It fell nearly 26 points, or 0.7%, to about 3,824.

  • The Nasdaq Composite Index fell 72 points, or 0.7%, to about 10,406 points.

Stocks posted their biggest gains of the month on Thursday, with the Dow Jones rising 345 points, or 1.05%, to 33,221 as major stock indexes rebounded after losses incurred earlier in the week that pushed the Nasdaq Composite to a new closing low for the year. . The S&P 500 was on track on Friday to wrap up its fourth consecutive losing week, the longest streak of weekly losses since May, according to FactSet data.

What drives the markets

US stocks traded lower on Friday afternoon, on pace to close the last trading session of 2022 with weekly and monthly losses.

Stocks and bonds have been crushed this year as the Federal Reserve raised its benchmark interest rate more aggressively than many expected, as it sought to crush the worst inflation in four decades. The S&P 500 is on track to end the year with a loss of nearly 20%, its worst annual performance since 2008.

“Investors were on edge,” Mark Heppenstahl, chief investment officer at Penn Mutual Asset Management, said in a phone interview Friday. “It seems as if being able to bring prices down might be a little easier given how bad the year has been.”

Stock indices have fallen in recent weeks as the recent rally inspired by hopes in the Fed’s policy focus faded in December after the central bank indicated it would likely wait until 2024 to cut interest rates.

On the last day of the trading year, the markets were also hit by selling to capture losses that could be written off from tax bills, a practice known as tax harvesting, according to Kim Forrest, chief investment officer at Bouquet Capital Partners. .

Forrest added that an uncertain outlook for 2023 has also weighed in, as investors worry about the strength of corporate earnings, the US economy and consumer as the fourth-quarter earnings season approaches early next year.

“I think the Fed, and then earnings in mid-January — they’ll set the tone for the next six months. Until then, it’s anyone’s guess.”

The US central bank has raised its benchmark interest rate by more than four percentage points since the start of the year, pushing borrowing costs to their highest levels since 2007.

The timing of the first Fed rate cut will likely have a significant impact on markets, according to Forrest, but the outlook remains uncertain, even as the Fed tries to signal that it plans to keep interest rates higher for longer.

On the economic data front, the Chicago PMI for December, the latest major data release for the year, Came stronger than expected. Climbing to 44.9 from 37.2 in the previous month. Readings below 50 indicate contraction.

In the coming year, Heppenstahl said, “we are likely to shift toward concerns about economic growth rather than inflation.” “I think the decline in growth will eventually lead to an even greater drop in inflation.”

Read: Stock market investors face 3 recession scenarios in 2023

Eric Sterner, chief information officer at Apollon Wealth Management, said in a phone interview on Friday that he expects the US to fall into a recession next year and that the stock market could see a new bottom as companies likely review their earnings. “I think the earnings outlook for 2023 is still very high,” he said.

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all on pace Friday afternoon posting weekly losses of around 1%, according to FactSet data, at last check. For the month, the Dow was down about 5%, the S&P 500 was down about 7% and the Nasdaq was about to crash down about 10%.

Read: Value stocks are outperforming growth stocks in 2022 by a large margin historically

As for bonds, Treasury yields rose on Friday as the US sovereign debt market was set to post its worst year since at least the 1970s.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.879%

It rose about four basis points on Friday at 3.88%, according to FactSet data, in the latest check. Ten-year yields jumped about 2.34 percentage points this year through Thursday, on track for the biggest annual gain ever based on data going back to 1977, according to market data from Dow Jones.

Meanwhile, the yield on the two-year note
TMUBMUSD02Y,
4.423%

Up about 3.64 percentage points in 2022 through Thursday to 4.368%, 30-year return
TMUBMUSD30Y,
3.971%

It jumped 2.03 percentage points over the same period to 3.922%. That marks the largest increase in a calendar year for each based on data going back to 1973, according to market data from Dow Jones.

Outside the US, European stocks capped their biggest percentage drop in a calendar year since 2018, with the Stoxx Europe 600
xxxp,
-1.27%
And the
It is an index of euro-denominated stocks, down 12.9%, according to market data from Dow Jones.

Read: A downturn in the US stock market is trailing these international ETFs as 2022 draws to a close

Companies in focus

Steve Goldstein contributed to this article.

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Fed’s reverse repo facility reaches $2.554 trillion by Reuters

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© Reuters. FILE PHOTO: The Federal Reserve Building in Washington, US, January 26, 2022. (Reuters)/Joshua Roberts/File Photo

Written by Michael S Derby

NEW YORK (Reuters) – A key facility used by the Federal Reserve to help control short-term interest rates saw record inflows on Friday, the last trading day of the year.

The New York Fed said its reverse repo facility took in $2.554 trillion in cash from money market funds and other eligible financial firms, beating the previous high seen on Sept. 30, when inflows totaled $2.426 trillion.

The cash rally was almost certainly tipping into record territory in the usual end-of-quarter pattern that could worsen further towards the end of the year. On those dates, for a variety of reasons, many financial firms prefer to deposit money in the central bank rather than in the private markets.

The Fed’s reverse repo facility has been very active for some time. After seeing almost no absorption for a long time, money began to gravitate toward the central bank in the spring of 2021 and then grew steadily. Daily reverse repo usage has been steadily above the $2 trillion mark since June.

The reverse repo facility takes cash from qualified financial firms in what is an actual loan from the Federal Reserve. The current rate is 4.3%, a yield that is often better than rates for short-term private sector lending.

The reverse repo facility is designed to provide a soft floor for short-term rates and the federal funds target rate, and is the Fed’s primary tool for achieving its function and inflationary mandates. To mark the higher end of the range, the Fed is also pushing deposit-taking banks to deposit cash at the central bank, where the interest rate on reserve balances is now 4.4%.

The federal funds rate is currently set between 4.25% and 4.5% and is trading at 4.33% as of Friday, sandwiched between the reverse repo rate and interest on reserve balances.

There are no signs of shrinkage

Even with the heavy use of reverse repo, Fed officials have always remained unconcerned about large outflows, even as some in financial markets worried about the potential for the Fed to drain the borrowing and lending lives of private money markets.

Fed officials also expected that as the central bank continues to raise interest rates with the goal of bringing down very high levels of inflation, the use of the reverse repo facility should decrease. But that hasn’t happened yet, and some in the markets now believe that the consistently high utilization of the Fed facility will be around for some time to come.

Research by the Federal Reserve Bank of New York indicated that banking regulation issues make demand for the Fed’s reverse repo instrument high. Meanwhile, the Kansas City Fed added its view that large inflows are related to limited private market investment opportunities and policy uncertainty.

Strong cash flows to the central bank may not have alarmed central banks, but they have driven their operations to an actual loss. The Federal Reserve finances itself through interest on the bonds it owns as well as the services it provides to the financial community. It usually makes a noticeable profit and by law returns it to the treasury.

Currently, the cost of paying interest on reverse repo agreements and reserve balances outweighs income. The Fed reported Thursday that as of Dec. 28, the accounting metric it uses to track losses was $18 billion. Many observers expect that the Fed’s plans to raise interest rates further and keep them at high levels will mean fairly large losses for the central bank over time, even if these losses will not affect the action of the Fed’s monetary policy.

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