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The Cox Connection

Vol 3 Issue 1 ||January 2020

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RETIREMENT INSIGHTS

Fine Tuning Social Security

Here are some facts from the Social Security Administration and AARP.

  1. For 2019, 64 million Americans collected over $1,000,000,000,000 (trillion) in Social Security.
  2. About 178 million workers paid into the Social Security system this year.
  3. Of those receiving Social Security, 50% of married couples and 70% of unmarried individuals receive more than half of their income from Social Security.
  4. Retired workers collected an average monthly benefit of $1,471 per month.
  5. Survivors of deceased workers account for about 12.3% of paid Social Security benefits.
  6. In 16 years, the number of Americans age 65 and older will increase by 22 million people!
  7. In 16 years, we will have about 1/2 of a worker less in the workforce to contribute to Social Security.
  8. Life expectancy rates have risen by an additional 6+ years since 1940.

These facts indicate that you can expect some changes to the Social Security program in the future. Don't assume that 62 is the best age for you to begin taking Social Security. Look at all your sources of income and look at how different your benefits will be at various ages. Know how much healthcare and how much various long-term living scenarios will cost you in the future. Remember, you can work part-time and possibly collect Social Security. It takes some careful planning to do it right. You don't have to do it alone, we are here to help.

Source:https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf

The SECURE Act of 2019

Here are some key changes that you'll want to know about:

  • Required minimum distributions (RMDs) from your retirement accounts will now begin at age 72 rather than the previous age 70 1/2.
  • IRA contributions can now continue past age 70 1/2; allowing for additional years of saving.
  • Part-time employees can now qualify to participate in company retirement plans.
  • Students can now take up to $10,000 from a 529 Plan to pay student loans.
  • A new tax credit of $500 will be available to small businesses for auto-enrollment into their retirement plan.
  • A no penalty distribution will be allowed up to $5,000 from a retirement plan or retirement account for a qualified birth or adoption.
  • Inherited IRA beneficiaries will now have to take distributions from their inheritance within a 10 year time frame.

Source: 1) https://www.forbes.com/sites/leonlabrecque/2019/12/21/the-secure-act-and-your-401k--ira-5-things-you-need-to-know-right-now/#43ecbc1a2ebb 2) https://www.napa-net.org/news-info/daily-news/key-secure-act-provisions-and-effective-dates

Capital Market Update

Happy New Year!! The overall U.S. stock and bond markets have ended up happy for the year 2019. Lots of political drama, Fed discussion, and trade policy news kept things interesting all year. Jobs are stable and economic activity remains positive entering 2020. Here are some index results as of December 31, 2019:

  • S&P 500 TR: YTD 31.49% and QTD 9.07%
  • Dow Jones Industrial Average TR:  YTD 25.34% and QTD 6.67%
  • MSCI EAFE (International Stocks): YTD 22.01% and QTD 8.17%
  • MSCI Emerging Markets: YTD 18.42% and QTD 11.84%
  • Bloomberg Barclays US Aggregate Bond: YTD 8.72% and QTD 0.18%
  • Bloomberg Barclays Global Aggregate Bond: YTD 8.22% and QTD -0.49%

U.S. stocks out performed foreign stocks in 2019, with the Technology sector as its best performer and Energy as the worst (all sectors had positive results). The S&P 500 was up 31% for the year while the developed foreign market index, MSCI EAFE, was up 22%. Both were strong results for investors. The United States has experienced strong consumer confidence with job growth continuing into the 4th quarter. Business spending, however, is slowing. Combining that with political news makes U.S. investors approach 2020 with some caution. No one can perfectly predict a future slow down but we do not expect to see the same performance from the market in 2020 as we did in 2019.

Looking abroad, New Zealand and Ireland MSCI Indices topped all developed market performance with returns over 38% for the year. New Zealand and Ireland have economies that are growing, with confidence demonstrated from consumer and business spending heading into 2020. Finland, Norway, and Hong Kong were the worst performing developed countries of 2019 with Finland up 9.48%, Norway up 10.37%, and Hong Kong up 10.34% (net MSCI Index returns). Both Finland and Norway experienced decreases in exports with the Euro area economic slow down while Hong Kong has been hugely impacted by wide-spread protests. Looking at emerging markets, we saw the Russia MSCI Indices post 50%+ returns due to consumer confidence and monetary easing. There is some concern that the positive results may not be sustainable going forward with evidence of reduced industrial output. Argentina was the worst performer in the emerging market space with an MSCI 2019 index return of -20.83%; political uncertainty and an economic recession are holding back performance likely to continue in 2020.

Throughout 2019 we saw cash flowing into the bond market and will likely continue to see that during 2020 as investors become more cautious about the U.S. economy and baby boomers in or near retirement reduce the risk of their portfolio. The Federal Reserve decreased interest rates three times throughout 2019 contributing positively to the broad bond market performance noted above. We approach corporate bonds more cautiously going into 2020 with evidence of reduced corporate spending and higher debt levels by businesses. For those seeking less risk, bonds rated A or better should be considered headed into the new year.

Overall, we have been pleased with the markets of 2019. However, we do not expect the same results from 2020 but we do see hints of a stable job market throughout the year. A slow down in spending from consumers and businesses is to be expected. We will continue to watch the markets and work with our investment managers to keep you up to date on available information. We can help you review your portfolio for risk and make changes as needed to increase your comfort level; we remain believers in a long-term strategy.

If your situation has changed or you would just like to see how your accounts are doing, call us to schedule an appointment to review your portfolio, 281-395-8300.

Total returns of the indices mentioned are provided by Morningstar, MSCI, and ETF.com. None of these firms nor their Information Providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the information on their websites, including, but not limited to information originated by them, licensed by them from information providers, or gathered by them from publicly available sources. There may be delays, omissions, or inaccuracies in the information. Past returns are no indication of future results. Sources: 1)https://www.msci.com/end-of-day-data-country 2)https://www.morningstar.com/ 3)https://www.etf.com/DIA#overview 4)https://www.focus-economics.com/ 5)https://markets.businessinsider.com/news/stocks/us-corporate-debt-10-trillion-record-percentage-economy-expert-warnings-2019-12-1028731031

COMMUNITY

Year in Review

Wow, did we say last year that the year had flown by? Well, let's say it again "the year has flown by!" It was a wonderful busy year for Cox Global Associates, and for that we are grateful.

Thank you to all of our clients and friends for being apart of of our year. Our professional team worked hard to review portfolios and stay on top of changes developing in the capital markets. We studied changes to tax laws, new retirement account laws, political and economic impacts to our investment portfolios, and how to connect more with our clients.

Our commitment to you going forward is to keep you informed and educated about events and changes that will impact your financial future, and to be an active part of our community. To do that, we will continue what we started in 2019 offering our insights through short online webinars, special in person seminars, tips that we'll share via social media and email, and giving back to our city. We encourage you to follow us on social media so that you can stay on top of the information we feel is beneficial to you. We are now on Facebook, LinkedIn, Instagram, and YouTube. Our website is a wealth of information as well under the Knowledge Center tab.

We welcome your visit to our office to review your portfolio or current scenario. Please don't hesitate to call and make an appointment, 281-395-8300. We want to be there for you when you need us. Let us know how we can help.

Events

January 20, 2020 Martin Luther King, Jr Day: NYSE and Cox Global will be closed

February 2020 Webinar: Getting Ready For Taxes (more details to come)

February 17, 2020 Presidents' Day: NYSE and Cox Global will be closed

stay informed

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Cox Global Associates, Inc. || 1260 Pin Oak Road, Suite 204 || Katy, TX 77494 || 281.395.8300 https://www.coxglobalassociates.com/ || info@coxglobalassociates.com

Securities and Advisory Services are offered through Geneos Wealth Management, Inc. FINRA, SIPC. Investment advisory services also offered through Cox Global Associates, Inc., A Registered Investment Advisor.