Social Security’s Lump-Sum Payment Option

Posted on July 3, 2014 | Investor Update

Investor-Update
The Social Security Administration offers the chance to receive a lump-sum payment of up to six months’ worth of benefits. It’s not a well-known option, but it is available to anyone meeting the basic requirements. There are also caveats to consider.

Retroactive benefits can be claimed by a person who has reached full retirement age (FRA) and is not currently collecting benefits. FRA is currently 66 for those born between 1943 and 1954. It increases in two-month increments for those born between 1955 and 1959. Those born in 1960 or later will not reach full retirement age until they turn 67.

Full retirement age is the year at which a person first becomes eligible for the primary insurance amount. Social Security benefits can be claimed prior to the FRA, but they will be below the primary insurance amount. Conversely, if claiming is postponed, delayed retirement credits increase the benefits until age 70. The increase in benefits is why conventional wisdom calls for delaying the claiming decision until as close as possible to age 70 for those in good health.

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Which IRA Should You Contribute to and When?

Posted on July 3, 2014 | AAII Journal

Contributing to a Roth IRA early in a tax year results in the greatest ending wealth.

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AAII WEEKLY FEATURES 7/1/2014

Posted on July 3, 2014 | Weekly Features

Investor-Update

This week’s AAII Weekly Features has been updated.
View this week’s Top AAII Articles, Featured Stock Screen and Member Question.

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Individual Investor Optimism Rises to Three-Week High

Posted on July 3, 2014 | AAII Survey

Optimism among individual investors about the short-term direction of stock prices is at a three-week high, according to the latest AAII Sentiment Survey. Pessimism also rose slightly, while neutral sentiment extended its streak of above-average readings.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 1.3 percentage points to 38.5%. Even with the improvement, optimism remains below its historical average of 39.0% for the 14th time in the past 16 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 2.6 percentage points to 39.1%. This is the 26th consecutive week that neutral sentiment is above its historical average of 30.5%.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 1.3 percentage points to 22.4%. This is the 11th straight week and the 34th out of the last 38 weeks with pessimism below its historical average of 30.5%.

The slight increase in pessimism follows what was a six-month low in bearish sentiment. Neutral sentiment remains at high levels, though it is now just below the upper border of what we would we consider to be an unusually high reading (39.4%). Keeping some AAII members optimistic is sustained economic growth, the market’s upward trend, and the Federal Reserve’s tapering of bond purchases. Discouraging some AAII members is the pace of economic growth, prevailing valuations, events in Iraq and Ukraine, and frustration with Washington politics.

This week’s AAII Sentiment Survey:

  • Bullish: 38.5%, up 1.3 percentage points
  • Neutral: 39.1%, down 2.6 percentage points
  • Bearish: 22.4%, up 1.3 percentage points

Historical averages:

  • Bullish: 39.0%
  • Neutral: 30.5%
  • Bearish: 30.5%

The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat or fall over the next six months. The survey period runs from Thursday (12:01 a.m.) to Wednesday (11:59 p.m.). The survey and its results are available online at: http://www.aaii.com/sentimentsurvey.



Four Market Traits AAII Members Would Change

Posted on July 3, 2014 | AAII Survey

This week’s AAII Sentiment Survey special question asked AAII members about the one thing they would change about the current market environment if they had a magic wand to do so. Responses were varied, though they primarily fell into one of four categories. The largest number of respondents (18%) said they would alter monetary policy or raise interest rates. This group also includes respondents who want to know how the Federal Reserve intends to end monetary stimulus. The second-largest group (17%) said they would alter Washington politics. These changes include the politicians themselves, regulations or the tax code. About 14% would change the market environment. Some would reduce current valuations, while others said they would end high-frequency trading or dark pools. Changing the pace of economic growth came in fourth, with about 9% of respondents saying they would accelerate it.

Here is a sampling of the responses:

  • “Speaking selfishly, stock prices should come down to earth.”
  • “Get better clarity from the Fed on how they are going to unwind quantitative easing.”
  • “I’d stop the high-frequency trading.”
  • “Continued improvement in real job growth.”
  • “Have the Fed raise interest rates sooner.”


Social Security’s Lump-Sum Payment Option

Posted on July 3, 2014 | Investor Update

Investor-Update
The Social Security Administration offers the chance to receive a lump-sum payment of up to six months’ worth of benefits. It’s not a well-known option, but it is available to anyone meeting the basic requirements. There are also caveats to consider.

Retroactive benefits can be claimed by a person who has reached full retirement age (FRA) and is not currently collecting benefits. FRA is currently 66 for those born between 1943 and 1954. It increases in two-month increments for those born between 1955 and 1959. Those born in 1960 or later will not reach full retirement age until they turn 67.

Full retirement age is the year at which a person first becomes eligible for the primary insurance amount. Social Security benefits can be claimed prior to the FRA, but they will be below the primary insurance amount. Conversely, if claiming is postponed, delayed retirement credits increase the benefits until age 70. The increase in benefits is why conventional wisdom calls for delaying the claiming decision until as close as possible to age 70 for those in good health.

Read more »



A Short Week for U.S. Markets

Posted on July 3, 2014 | Stock Superstars Report

U.S. markets closed at 12:00 p.m. CST on Thursday in observance of Independence Day. Despite the shortened week, investors pushed the Dow Jones industrial average above the 17,000 threshold for the first time. Following the Dow’s lead, the S&P 500 also hit a record-setting level of 1,982 on Thursday.

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Mergers, One Deletion and the July Monthly Report

Posted on July 3, 2014 | Dividend Investing

The July monthly report, Dial “M” for Merger, is now available. In it, we discuss the five pending mergers DI stocks are involved with…

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Sell OF THE WEEK 7/2/2014

Posted on July 2, 2014 | Podcast

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why General Mills, Inc. (GIS) is his “Sell of the Week” on the MoneyLife Radio Program. MoneyLife is a daily personal finance show that sorts through the financial clutter to bring you the information you need to lead the MoneyLife.

Audio url: Sell of the week





Avoiding Probate Through Account Titling

Posted on July 1, 2014 | AAII Journal

Joint ownership can make transferring assets at death easy, though the three types have implications that must be thought through.

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