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social security Archives -

U.S. Birth Rates Have Never Been Lower

By | 2017, Money Moxie, Newsletter | No Comments

In 2015, the United States hit a new low fertility rate of 12.4 births per 1,000 people.2 This is down from 24 per 1000 in 1960.2 We are having half as many babies and it’s going to have a big impact on Americans.

Why this is happening is as complicated as each individual family situation, but one study in the late 1990s concluded that there is a certain population threshold that, when reached, causes individual quality of life to fall.3

There are several metrics that contradict this hypothesis. Americans are showing increasing satisfaction with their lives when asked about their income, jobs, housing, education, and environment.4

There is one major measurement that is falling significantly: work-life balance.4 Maybe we are just all working too hard to take the time to raise a family.

The effects of a declining population are more predictable than its reasons. Many economists predict lower productivity and standards of living as populations decline. We can look to Russia and Japan for examples of what happens. Productivity and GDP per capita in these countries continue to increase even as their populations fall. The continued gains without population growth have been attributed to technology.3

The real threat is the inevitable side effect of a lower birth rate and longer life span: an aging workforce. The median age in the United States in 1960 was 28.1 and by 2060 it is projected to be 42.2

The shifting age in the U.S. is going to lead to some interesting policy decisions in the future. With fewer young workers to fund Social Security, how will we meet the obligation? The U.S. will have to increase revenue or decrease benefits. (There are a number of unpopular ways it can be done: raise taxes, increase retirement age, etc.)

It is more important than ever to ensure that you are doing everything you can to prepare for retirement.

Now is as good of a time as any to talk to our wealth advisors about how you can maximize your retirement savings. No one can predict the future (especially when it comes to congressional action) so all you can do is prepare for it.


(1) Graphical data provided by Federal Reserve Bank of St Louis.

(2) The World Bank. (2017, September 14). Birth rate, crude per 1,000 people. Retrieved from The World Bank: https://data.worldbank.org/indicator/SP.DYN.CBRT.IN?locations=US.

(3) Singha, K., & Jaman, S. (2013). Does population growth affect economic development: A study in India. Journal of International Economics, 4(2), 41-51. Retrieved from


(4) Organization for Economic Cooperation and Development. (2017, September 14). Better Life Index: United States. Retrieved from Better Life Index: http://www.oecdbetterlifeindex.org/countries/united-states/.

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Forge a New & Powerful Financial Paradigm

By | 2017, Executive Message, Money Moxie | No Comments

Dear Friends and Financial Partners!

How can you improve your savings and investing before and during your retirement? Here are some nifty (some might say awesome) tips to immediately change your personal money paradigm.

Change Your Money Mind-set: Chris Reining, who lives in Madison, Wisconsin, became a millionaire at age 35 by doing one thing differently. Chris started working to save and invest, rather than working to spend. By going through a self-imposed paradigm shift, your life can also transform from a working-to-spend environment to a savings-and-investing world. The outcome speaks for itself. This is one powerful idea.

Get Professional Financial Help: Ours, of course. When you are accumulating assets in your 401(k) or 403(b), you are in an automatic investment mode. If you don’t know what the sequence-of-returns risk is or how dollar-cost averaging works against you during your withdrawal years, you are already behind and need our help. Social Security has over 2,700 rules and hundreds of exceptions to these rules. Medicare is filled with land mines. Distributing assets during the decumulation phase is exponentially more complex than adding assets.

Take Charge of Your Emotions: Don’t let your emotions take charge and dictate your actions. Specifically, when the stock market is dropping or has dropped, don’t lock in your losses! Remember: Stock market drops are temporary. Locking in losses is permanent. Locking in losses by selling at or near the bottom of a market may be a mistake you and your loved ones will pay for the rest of your lives.

Ignore the Media: Call us. We know your specific financial goals. We manage money and segment your accounts by time to avoid the sequence-of-returns risk. Even when the media is all doom and gloom, there’s a good chance your accounts will be doing just fine with respect to your own financial goals. “The Sky is Falling” mentality illustrated by Henny Penny, more commonly known in the U.S. as Chicken Little, may cause you to want to lock in your losses. Don’t do it. Even well-meaning friends and family members can push you away from financial goals.

Remember: Contrary to many, investing is not about beating the market. Financial planning and investment management are about meeting your goals, including having a sustainable income stream during retirement. At Smedley we strive to help you forge a powerful, yet personal financial paradigm. As always, we are on your side.

Bullish Best Wishes,

Roger M. Smedley, CFP®

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Make 2016 Pay off Big!

By | 2016, Newsletter | No Comments

Make 2016 Pay off Big

Social Security – Beginning April 30, 2016, the “File and Suspend” and “lump sum payment of suspended benefits” will no longer be available. If you are married, age 66 or older, and have not started taking Social Security, now may be the time to talk about maximizing your benefits before time runs out.

Currently a filer who is at or past full retirement age can file for individual benefits but suspend receiving them, allowing a spouse or dependent to collect based on the filer’s record. In doing this, the filer can capture the delayed benefit increases of 8 percent each year that benefits are delayed, beginning at full retirement age and available up to age 70.

After April 30, 2016, in order for a spouse or dependent to collect benefits based on the filer’s record, the filer must begin to collect his or her own benefits, thus forgoing the delay benefit increases. Furthermore, filers who have suspended benefits will no longer have the option to request a lump-sum payment of all suspended benefits. This strategy can be complex. We suggest that you start the process immediately to take advantage of this opportunity before time runs out.

Make up for lost time – Boost your retirement contributions. Living comfortably in retirement is largely determined by what you are willing to save today. Make the years before you retire really count by increasing your 401(k) or other retirement account contributions. This chart to the right illustrates the difference that setting aside 6, 10, or 15 percent of income can make. Even better, maximize your contributions, and make a significant difference.

The unseen result is what these contributions can do to supplement income at retirement. Using a 4 percent distribution rate, the difference in this illustration is $1,120 each month.

Decide today to make living comfortably in retirement a priority.

big in 2016 graph

Financial diary – This is not a typical diary. Keeping track of your spending goals and checking in on your finances regularly will keep you focused on your real financial goals.

Use the diary to list items you want or need and keep track of spending, investing, and savings. This will help you prioritize your spending. The result–focused spending and saving. Monitoring your diary will give you the emotional boost to keep you on track. When you see that you’ve accomplished a goal, you feel satisfied with your financial decisions. If you see that you are getting off track, this will be the silent kick to get you back on track.

Keeping a financial diary will help prevent emotional spending–a compulsion to buy something right now. Retailers are excellent at getting us to buy things we didn’t know we needed by simply placing an item strategically in view and setting the mood with a little shopping music. Keeping track of your spending can help you outsmart the retailers.

Looking at the financial diary weekly, even if you think nothing has changed, can help keep you on track and out of trouble.

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Social Security Changes

By | 2015, Money Moxie, Newsletter | No Comments

With the stroke of a pen, a favorite Social Security filing strategy has been taken off the table. The Bipartisan Budget Act of 2015 was signed November 2nd and eliminated most of the “File and Suspend” options after April 30, 2016. Below is a summary of the recent changes.

File and Suspend
• Currently: A person who is at or past their full retirement age (FRA) can file for their benefits but suspend receiving them, allowing a spouse to collect off of their record.

• Through April 30, 2016: Anyone age 66 or older can still file and suspend to allow an eligible spouse to collect a benefit off their record.

• After April 30 2016: “File and Suspend” will no longer allow a spouse to collect benefits off of the filer’s record unless the filer takes a benefit. For a spouse to collect a benefit, filers must collect their own benefit and forgo delayed retirement credits. If an individual suspends benefits, all spousal and dependent benefits will be suspended.

Restricted Application for Spousal Benefits
• Currently: A spouse who is at or past FRA, and who has not received any benefits, can choose either a spousal benefit only (referred to as a Restricted Application) or his or her own individual benefit.

• Anyone 62+ by the end of 2015 is grandfathered and retains the ability to restrict their claim to spousal benefits only if they wait to collect until they reach their FRA.

Individuals who are younger than 62 will not have the choice of which benefit they collect when they reach FRA. Regardless of their age, they will be “deemed” to have filed for the highest benefit. They will no longer have the option to restrict their benefit to their spousal benefit only.


Smedley Financial and its advisors do not provide personal tax advice. It is important to coordinate with your tax advisor regarding your situation.

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