Weekly Market Commentary

July 8th, 2019

The three major indexes dropped Friday after June’s surprisingly good jobs report diminished hopes of a rate cut in the near future. The Labor Department’s report showed nonfarm payrolls rose by 224,000 jobs – the biggest increase in five months. For the week, the Dow rose 1.27 percent to close at 26,922.12. The S&P gained 1.69 percent to finish at 2,990.41, and the NASDAQ climbed 1.94 percent to end the week at 8,161.79.

Returns Through 7/5/19
1 Week
1 Year
3 Year
5 Year
Dow Jones Industrials (TR)
NASDAQ Composite (PR)
S&P 500 (TR)
Barclays US Agg Bond (TR)

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

July Fourth — When the Continental Congress approved the Declaration of Independence on July 4, 1776, the population of the 13 colonies was 2.5 million, equal to the population of Houston today (source: Census Bureau, BTN Research).

Young and Old — By the year 2035, the number of Americans at least age 65 (projected to be 78 million) will exceed the number of Americans under the age of 18 (projected to be 76.4 million), the first time in our nation’s history that has occurred (source: Census Bureau, BTN Research).

At the Beginning — The ongoing bull market for the S&P 500, which began on March 10, 2009, has gained 441 percent (total return) over its 10-year, 3½ month duration. The stock index gained 72 percent during the first 12 months of the bull run, including 27 percent during the first month of the bull market (source: BTN Research).

WEEKLY FOCUS – Phased Retirement Can Help Ease Into Life After Work

Whether it’s for financial or emotional reasons, many people reach retirement age only to realize they’re not ready to leave the workforce for good. If you find yourself in this situation, you may consider a phased retirement – transitioning from full-time work to part-time and then gradually reducing your hours until you are ready to retire completely. 

Financial Security: By earning income in retirement, you can stretch your savings and delay claiming Social Security benefits. Because Social Security benefits are calculated based on your average monthly income during the 35 highest-earning years of your life, continuing to work may boost the amount you will receive once you start claiming benefits. Working part-time may also allow you to stay on an employer’s health care plan until you’re eligible for Medicare at age 65.

If you’ve been saving money in a tax-deferred account, you will have to eventually take required minimum distributions (RMDs), determined by your age and the total balance of your accounts. Failure to take an RMD will result in a significant tax penalty on the money not withdrawn. But taking the RMD may push you into a higher tax bracket, which could cost you more than what you had planned for. Continuing to work – even part time – may make you eligible for a Still-Working Exception that allows you to withdraw less than your RMD, so the remainder can continue to grow tax free. 

Emotional Stability: After decades in the workplace, you may miss the camaraderie and sense of purpose a job provides. If you believe you won’t find that same satisfaction in retirement, a phased retirement may be an option for you. By working part-time, you can maintain relationships with coworkers and continue to be a productive member of a team until you can find something to fulfill those needs. 

Talk to Your Employer: If you believe phased retirement will work for you, you’ll need to share your plan with your employer. If they won’t let you move to part-time, you may have to find another employer who will.

If you’re considering phased retirement, call us today, and we can start developing a plan that will put you on the path to success.


This commentary brought to you by J. Graydon Coghlan, CRPC
and the team at CFG Wealth Management, Inc.
4370 La Jolla Village Drive, Suite 630 San Diego, CA 92122
Phone: (858) ­550-3960 Fax: (858) ­550-3969 Toll Free: (800) ­884-5121

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright January 2018. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2629993.1

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