Just in time for the upcoming anniversary of The 1935 Social Security (SS) Act, the 2017 Annual Report of the Board of the Social Security Trustees is out and once again, the news is sobering. “Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing.” Additionally, the debate over health care has put Medicaid in the spotlight, so it’s time for a Q&A on three of the largest components of the federal budget, which account for about $2.4 trillion of spending.How is SS funded? It’s a pay as you go system, funded by payroll taxes (the FICA line item you see on your pay stub). Every employee (and employer) pays a 6.2 percent tax on earnings up to a limit, which is currently $127,200. If you are self-employed, you have to pay as both the employer and the employee, for a total of 12.4 percent.
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During her Congressional testimony, Fed Chair Janet Yellen painted a fairly bright picture of the US economy, stressing a rebound in consumer spending, which should allow the central bank to gradually raise short-term interest rates over the next few years. Investors were heartened to hear that message and drove stocks higher, with the Dow closing at a new all-time high after Yellen’s first day of testimony. What could undo this rosy picture? There are a number of risks to the US and global markets that persist, though three rise to the top of the list. Their existence does not mean that long-term investors should change their game plans, but they are a reminder to guard against complacency and to always approach investing with caution.
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With Independence Day behind us, the heart of summer has begun. For some, it is the time to disengage from real life issues, like personal financial. For me, it’s time for my annual “KISS” for your money! What is KISS? “Keep It Simple, Stupid” and it’s the perfect mantra for this time of year. Here are five tasks that are easy to complete before you shut down.
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The better than expected June jobs report and Federal Reserve Chair Janet Yellen’s upcoming Congressional testimony is a good opportunity to review where the U.S. economy stands at the mid point of 2017. Economic Growth: The broadest measure of economic growth is Gross Domestic Product (GDP). Over the past fifty years or so, the economy has grown by 3 percent annually. In the past decade, that rate has dropped to about 2 percent, with 2015 being the best year (+2.6 percent) and 2009 the worst year (-2.8 percent).
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