By Edward Leone Jr. CFP RFC MBA DMD
Contact Information: edleonedds@gmail.com
303-478-6793
Our last blog addressed the basics of the Social Security System. It is common knowledge that the system cannot perform into the future as it does today as a result of demographic forces at work in our society. With a large portion of the population retiring (13.1% over the age of 65 in 2013 and 21.4% by2050) and fewer people paying the FICA tax, it is projected that by 2033, the system surplus of $2.7 trillion will be depleted. If no changes are made in the system structure, benefits will be reduced to about 77% of current levels. Such program adjustments as increasing the tax and the amount on which the tax is applied, increasing the retirement age at which benefits can be collected along with changes in the benefit structure are essential to the continued existence of the program. Just how popular will these initiatives be? How can the system be made more efficient administratively and productive in yield capacity? Mean while many of you have your 401K. Be sure to contribute full amounts if possible. Allocate funds to help reach retirement goals while taking into consideration you risk tolerance. Rebalance allocations at least annually.
Rodney Johnson in the August edition of Boom and Bust points out a continued problem with the growth pattern of our US economy. Median household income in the US is down from $57,000 in the year 2000 to $52,000 today. Discretionary dollars dedicated to consumption are just not as plentiful. Our GDP is trending downward. It was 2.4% in 2014 and is projected at 2.2% for 2015.
Health care issues continue to challenge the system. Medicare Part B premiums may increase by as much as 15% next year. It is possible that benefit rates paid to your doctor by Medicare will drop by 20%. Will these care givers what to see you? The Obamacare Cadillac Tax on high-dollar health insurance programs will come to be in 2018. Watch a fight in the Congress over this one. Employers will continue to cost shift health care issues to employees due to elevating costs. There is no clear solution in sight just yet over the problems at Veteran Administration facilities.
There is much concern about the situation with oil prices both on the positive and the negative. The positive is in the area of cost savings for transportation of goods and our own travel costs. The negative has to due with the continued health of the industry and job availability. Most commodity prices are down right now, but is the oil market force of supply and demand at work or are we seeing a massive geopolitical intervention into this market place?
12billion web searches are conducted by consumers per month in the US. There are great opportunities to share information and generate marketing strategies on the internet given this information. Social media marketing is expected to increase in spending by 126 percent over the next 5 years.
The Presidential election cycle has begun and will be quite entertaining. Let’s hope outcomes are favorable for the country and its citizens!!
For The Record:
DJIA 17,348.73
S & P 500 2,079.61
NASDAQ 5,019.05
Suggested Reading: “Marketing Strategy” By Ferrell and Hartline
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