Our Thoughts

FJY News to Know #37

The S&P Topped The 3K Mark Recently — But This Number Can Be Deceiving

Lowering interest rates and new highs can create excitement. However, the S&P 500 has also dipped significantly three times in the last nine months, thanks in part to the Oval Office’s tariffs. Commercial paper debt has reached new highs, as long-term corporate loans are getting rarer. The price of oil is another thorn in the side of the S&P’s cheery zenith: Corporations will spend more on production and transportation as a result. Read more here about other factors to be watching in the current economic and market environments.

Turning 65 Ain’t What It Used to Be … And Other Tales of the Changing Retirement Landscape

Each day in the U.S., roughly 10,000 baby boomers are turning 65. Most of them are marking time until they can leave the workforce and enjoy the freedoms of life. Without some major action from Congress though, the current excess trust fund revenue will be depleted by the year 2034. If this occurs, it is estimated that Social Security would only be able to pay less than 80% of the promised benefits from payroll taxes. However, waiting until 70 years of age could increase your Social Security benefit by 32% — compared with starting benefits at 66. For more perspective on retiring in our era, read more here

Corporations Are Hiding Trillions to Avoid Taxes — It’s an International Thing

Although leaders of many countries have tried to keep companies from avoiding taxes, the amount has been going up. A new study by the International Monetary Fund shows that $15 trillion is held in shell companies across the world for that specific purpose. One of the biggest problems with this is that it’s depriving economies of tax revenue.

However, according to the study, phantom capital is being funneled as FDI (Foreign Direct Investment) into shell companies that have no real business activity — a type of financial engineering to avoid paying taxes on that money. This makes it harder for economists to accurately measure international FDI amounts. Many countries have lowered their corporate taxes to attract companies for more FDI. Ireland, for example, has lowered its corporate tax rate from 50% in the 1980s to just 12.5% today. For more insight into this phantom capital, read this article.

A Penny Saved is a Penny Earned — And Saving Still Speaks Volumes for Retiring

A new survey from NerdWallet finds that people are retiring at an average age of 59. Historically, 65 was the magic number for retirement. Many of those retirees, roughly 36%, said they didn’t have a choice. 18% mentioned health as the prime reason for cessation, and 9% said a job loss forced them into retirement. Saving money is perhaps the best financial strategy — regardless of your planned retirement age. “Americans aren’t saving enough for retirement,” said Ariella O’Shea, investing and retirement specialist at Nerd Wallet. Want to crunch some numbers? Click here to read about possible retirement scenarios.