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Healthcare Costs Overtaking Social Security Benefits

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Experts often caution retirees against overlooking the cost of health care when planning for their golden years. A recent study suggests that concern is about to become even greater.

According to the 2015 Retirement Health Care Cost Data Report, a healthy couple retiring at age 65 this year can expect to spend over $266,000 on health care during retirement. The report was compiled by HealthView Services, a provider of Medicare, Social Security and long-term care planning tools.

The anticipated spending total for such a couple accounts for the following:

  • Medicare Part B (covering doctors’ visits and outpatient services);
  • Part D prescription drug plans;
  • Supplemental Medigap insurance

But the worst news is that these costs continue to grow at an alarming pace—far faster than annual adjustments to Social Security benefits. The $266,000 figure is 6.5% higher than last year’s number, while Social Security checks grew by only 1.7% in 2015. It doesn’t take a math teacher to realize that if the trend continues, retirees will be spending a disproportionate amount of their benefits to pay for health care.

These numbers don’t account for ancillary costs such as dental, vision and hearing treatment. When including those costs, the anticipated spending amount moves closer to $400,000. It’s anticipated that these figures will grow another 15%-20% within the next 10 years.

In terms of Social Security benefits, HealthView Services projects that health care costs will account for 67% of lifetime income from the program for people of full retirement age in 2015. Looking forward to 2025, that number grows to an astounding 90%.

“The report demonstrates that health care costs will account for a very significant and growing portion of retirees’ budgets,” said Ron Mastrogiovanni, founder and chief executive of HealthView Services.

Mastrogiovanni suggested that people can prepare for these intimidating costs by investing in products including, but not limited to, Health Saving Accounts (HSA), Roth IRAs and non-qualified annuities—but above all, by sitting down with a qualified retirement phase expert to plan a comprehensive strategy for retirement.

Market Watch: Will The Selling Continue?

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U.S. stocks traded close to even on Thursday, one day after the Dow plunged nearly 300 points in an ugly Wednesday for equities. The day pushed the Dow index back into negative numbers for 2015.

The Dow is now down about 2.5% thus far this week (remember, a 5% drop denotes a technical pullback) and showing no signs of recovery on Thursday. Numerous experts attribute the recent downturn to fears over potentially rising interest rates, plus the strengthening of the U.S. dollar.

This morning saw a spike in oil prices. The commodity was back above $50 per barrel after Saudi Arabian forces launched a military strike in Yemen.

Thursday was a quiet day on the data side, but cautious investors had plenty of other news to keep them busy.

Here are the numbers from Wall Street on Thursday:

Dow Jones Industrial Average: 17,678.23 (-40.31)

NASDAQ: 4,863.36 (-13.16)

S&P 500: 2,056.15 (-4.90)

Market Watch: Dow In The Red for 2015

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It’s been another ugly day on Wall Street Wednesday, with the Dow dropping 200 points by noon off continued fears over interest rate hikes.

As the month of March—and the first quarter of 2015—winds to a close, investors are also expressing concern over how the stronger U.S. dollar will impact the upcoming earnings season. A disappointing report on February’s durable goods orders didn’t help matters, as the figure dropped 1.4 percent from January.

By 1:30 p.m., the Dow had dropped 210 points—sending the index back into negative numbers for 2015. The S&P 500, down 18 points by late afternoon, stood dangerously close to turning red as well.

As of 3 p.m., here are the Wednesday numbers from Wall Street:

Dow Jones Industrial Average: 17,812.69 (-198.45)

NASDAQ: 4,908.73 (-86.01)

S&P 500: 2,073.36 (-18.14)

Market Watch: Will The Volatility Continue?

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U.S. stocks were down in Tuesday afternoon trading, following a day where mixed data drove continued volatility.

The Dow finished slightly down on Monday, marking the ninth consecutive trading session of alternating between gains and losses.

Today, comments from various Federal Reserve presidents and inflation concerns are the focus. San Francisco Fed President John Williams offered an opinion Monday that the central bank should wait “no more than a few months” before pursuing a hike in interest rates. Meanwhile, the consumer price index increased for the first time in months (+0.2%) for February; a considerable jump when compared to a -0.7% decrease in January.

Investors pushed stocks slightly higher based off stronger-than-expected new homes sales figures on Tuesday morning. But in the afternoon, stocks not only lost their gains but declined considerably. Some experts suggested this was the result of continued concerns over an impending interest rate hike.

Oil prices swung wildly around the world, as China’s factory sector saw a dip in activity to the lowest level seen in 11 months.

Here are the final numbers from Tuesday on Wall Street:

Dow Jones Industrial Average: 18,011.14 (-104.90)

NASDAQ: 4,994.73 (-16.25)

S&P 500: 2,091.50 (-12.92)

Market Watch: What Will Drive Stocks This Week?

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U.S. stock prices were mixed on Monday, as investors searched for direction following another week of volatility.

Oil prices, currency values, and the latest Federal Reserve policy statement all played a role in leading the market to a week of 100+ point swings every day.

This week, data moves back into the spotlight, starting with reports today that home sales were up 1.2%. Durable goods data will be released Wednesday, while the 4th-quarter GDP figure from 2014 will be released on Friday.

The Euro was up (1.4%) against the dollar early on Monday, while oil futures were up 88 cents to close at $47.45 a barrel. Prices originally slipped after a statement from Saudi Arabia indicating they would not be cutting back on supply.

As of 3 p.m., here are Monday’s numbers on Wall Street:

Dow Jones Industrial Average: 18,179.36 (+51.71)

NASDAQ: 5,025.11 (-1.31) 

S&P 500: 2,110.92 (+2.82)

SEC Chair Favors Fiduciary Duty on Wall Street

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It’s been nearly a month since President Obama made a strong push for fiduciary responsibility on Wall Street, explaining that biased financial advice robs everyday Americans of billions of dollars each year.

Since that time, politicians and financial advisors alike have weighed in on the issue. But on Tuesday, perhaps the most important voice in the debate offered her stance.

“We should implement a uniform fiduciary duty for broker-dealers and investment advisers,” confirmed Mary Jo White, Chairwoman of the Securities and Exchange Commission (SEC).

Speaking at a Securities Industry and Financial Markets Association meeting in Phoenix, Ms. White said that she favors one standard for all retail investment advice. “The standard,” she explained, “is to act in the best interest of the investor.”

The speech provided some clarity on the issue, which was a polarizing topic in the financial industry long before President Obama’s speech. In the weeks since the President re-started the dialogue, it became known that the SEC’s four commissioners were split on the issue—Commissioners Luis Aguilar and Kara Stein are in favor of fiduciary duty, while Commissioners Daniel Gallagher and Michael Piwowar are opposed.

As Chairwoman, Mary Jo White holds the tiebreaking vote, so to speak—and it’s a resounding ‘yes.’

“It confirms what [White] has indicated in private—that she thinks this is an important issue, and one the commission should take up,” said Barbara Roper, Director of Investor Protection at the Consumer Federation of America.

Meanwhile, the Department of Labor (DOL) continues to pursue a separate rule for brokers giving advice regarding retirement accounts. DOL Secretary Thomas Perez spoke last week, and was confident that his own agency will be able to strengthen standards within the next year.

“This is one of the most remarkably important things we can undertake in [the remainder of President Obama’s administration],” said Secretary Perez. “I know we can get this done. We will thread this needle.”

But it won’t happen overnight. The latest proposal from the DOL reached the Office of Management and Budget on February 25. From that point, the Office of Management and Budget has 90 days to sign off before the DOL releases the rule for public comment. Of course, at any point the opposition can bog down the process through various means, including filing for a stay (i.e. suspension) on the rule in federal court.

However, there’s no denying considerable progress has been made in the early days of 2015. A potential fiduciary rule now has the backing of the most important voice in Washington, D.C., and gained similarly strong backing from two crucial government agencies in the past week.

Market Watch: What’s Next?

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U.S. stocks were lower on Thursday, one day after the Federal Reserve altered language in a statement that indicate interest rate hikes may be on the way.

The Fed dropped the word ‘patient’ from its March statement, leading investors to believe that the days of zero-interest rates are coming to an end. However, when taken as a whole the statement was rather non-committal, and funds futures now see October as the most likely target date for a rate increase. Before the statement was released, analysts were targeting June as the likeliest time frame.

“Just because we removed the word ‘patient’ does not mean we will become impatient,” said Fed Chair Janet Yellen, prompting many economists to alter their predictions.

The Fed’s statement will likely provide this week’s market highlight. Eyes now turn to European summit meetings this weekend, where Germany and other nations will work to solve the Greece crisis once and for all.

On Thursday, oil prices moved down 1.5% to just under $44 a barrel. News from OPEC renewed oversupply fears once more.

Here are the final numbers from Thursday on Wall Street:

Dow Jones Industrial Average: 17,959.03 (-117.16)

NASDAQ: 4,992.38 (+9.55)

S&P 500: 2,089.27 (-10.23) 

Market Watch: Fed Takes Center Stage

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U.S. stocks experienced considerable volatility on Wednesday, as investors digested the Federal Reserve’s statement at the end of their two-day meeting.

In this afternoon’s announcement, the Federal Reserve removed the word ‘patient’ from their outlook on a forthcoming increase on interest rates. The change in language is believed to signal an impending end to the six-year period of near-zero interest rates.

However, the remaining language in the statement suggested that it might take until the end of 2015 for the rate hike to occur. Markets were down as much as 150 points on the Dow this morning, but turned positive following the release from the Fed.

Oil prices reversed their recent tumble, moving up almost 2.5% to $44.50 per barrel.

Major earnings reports are due today from FedEx, General Mills and Sonoma.

As of 3:15 p.m., here are the numbers from Wall Street:

Dow Jones Industrial Average: 18,073.56 (+224.48)

NASDAQ: 4,998.80 (+61.37)

S&P 500: 2,106.71 (+32.43) 

Market Watch: Wall Street Waits For The Fed

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Stocks moved lower on Tuesday morning, as investors continue to look towards tomorrow’s Federal Reserve statement for hints of whether an interest rate hike is around the corner.

The lower open follows a 228-point jump in the Dow on Monday, as investors ignored a new six-year low in oil prices to focus on fluctuations in the value of the dollar. The currency fell slightly against the Euro.

On the data side, new homes figures came out Tuesday morning. falling 17 percent in February. This was the lowest figure in a full year, as harsh winter weather took its toll. European equities were mixed on Tuesday, as the European Union summit looms at the end of the week. Continued attempts to negotiate end-of-bailout terms with Greece are expected to top the agenda.

U.S. oil prices fell 1.8% to just over $43 a barrel, the lowest price since March 2009.

Here are the final numbers from Tuesday on Wall Street:

Dow Jones Industrial Average: 17,849.08 (-128.34)

NASDAQ: 4,937.43 (+7.93)

S&P 500: 2,074.20 (-6.99)

Market Recap: Big Week Ahead On Wall Street

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U.S. stocks moved higher on Monday, as investors looked towards a week that could determine the course of the markets for much of 2015.

Last week, the market fluctuated up and down with moves of 100+ points on four out of five days. Investors were spooked by a strong dollar, as well as oil prices, which now stand below $44 a barrel for U.S. crude (lowest level in six years) and $54 a barrel for Brent crude.

Many expect that this week’s Federal Reserve policy statement will drop the word ‘patient’ from its typical vernacular, signaling an impending interest rate increase as soon as June. For months now, experts have warned of an interest rate hike being the force that could stop this bull market in its tracks.

On Monday, investors turned an eye to perceived weakness in the dollar (which moved down slightly against the Euro) as everyone gears up for the mid-week Fed statement.

Here are the final numbers from Wall Street on Monday:

Dow Jones Industrial Average: 17,977.42 (+228.11)

NASDAQ: 4,929.51 (+57.75) 

S&P 500: 2,081.19 (+27.79) 

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