Connect with us

Business

Should I take Social Security at 62 or wait? Here are 3 smart reasons to start getting your checks ASAP

Avatar

Published

on

Should I take Social Security at 62 or wait? Here are 3 smart reasons to start getting your checks ASAP

Americans nearing retirement know the advice all too well: When it comes to Social Security, good things come to those who wait. And those who can not wait? Its benefits are reduced.

Those reduced benefits can accumulate. If you take out Social Security before your full retirement age, you should expect a 30% drop in monthly benefits, according to Fidelity.

After 2021 Gallup poll cited by Experian It indicates that many take the exit ramp sooner. And it found that the average retirement age was 62. Experian theorized that might be related to the fact that 62 is the youngest age you can claim your government benefits.

Advertisement

But even knowing they could see a 30% drop in their monthly checks, these retirees aren’t necessarily making a huge mistake. There are some strong reasons to start taking it Your Social Security benefits As soon as possible.

do not miss

Health status

Health issues rank high on the list of concerns mentioned by those who participated in a Gallup poll. Respondents were particularly concerned that they might experience a disability, need unexpected surgery, or be seriously diagnosed.

While it’s possible to enjoy an early retirement and still have strong health, keep in mind that Medicare benefits don’t start until you’re 65.

The thing about unexpected health emergencies is that they are unexpected. And they can become expensive. Having a regular income can mean the difference between being able to manage anything that pops up and having to dwell on it Debt to cover medical bills.

religion

Religion does not discriminate on the basis of age. Americans accumulated $18.6 trillion in debt during the first few months of 2022, according to the Federal Reserve. Of those, the average debt burden for those ages 55 to 64 was $97,290.

Advertisement

Especially when it’s debt Unsecured, as in the case of high interest credit cards, they are real budget killers. So why keep charging wild interest charges if you have government cash available?

Read more: 10 Best Investing Apps for ‘Once in a Generation’ Opportunities (Even If You’re a Newbie)

Ideally Pay off all debts Before you decide to retire, but if Social Security can help eliminate stubborn credit card balances, that’s a good solution, too. You can now claim checks for different amounts and claim less benefits later.

And if you’re still worried about tight cash flow, you can Continuing to work And you still receive benefits — but only if you reach your full retirement age, around 66 or 67.

Advertisement

Your partner earns enough for both of you

If your spouse is claiming full Social Security benefits at retirement age, You can then claim 50% of its benefits.

First, take a good look at what you earn. If 50% of your marital income is more than 100% of your income, you might as well go ahead and retire to live your golden years dreams.

Conclusion: Facilitation does

Americans who wait until their full retirement age are likely to enjoy the best Social Security scenario. But if you’re ready to step back professionally, a good compromise might be to ease into retirement for your good health, even as you manage debt within your means.

So is 62 the magic number?

Maybe, if you fit the bill as we described above.

Advertisement

Regardless, before making any important decisions, A.J financial consultant They can help you decide which is best for you. Remember: They have their own retirement to think about, so you can benefit from their experience in more ways than one.

What do you read next

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Source link

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Business

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

Avatar

Published

on

By

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

Source link

Advertisement
Continue Reading

Business

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

Avatar

Published

on

By

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.

Advertisement
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. .

Advertisement

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.

Advertisement

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

Advertisement

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%

Advertisement

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.

Source link

Advertisement
Continue Reading

Business

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

Avatar

Published

on

By


© 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.

Advertisement

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

Advertisement

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.

Advertisement

Source link

Continue Reading
Advertisement

Trending