Ho, ho, ho, or yo, ho, ho if you’d rather ignore the season and get away from it all by pretending to be a pirate on a desert island. Most of us, however, will spend our holidays around the dessert island deciding between chocolate or cheesecake, but not chocolate cheesecake (bleah, is my advisor input here; sometimes more flavor is too much and destroys the flavor you sought in the first place).
Which is (perhaps) a nice segue into an investing discussion: Diversification is essential, but too much leads to under performance. Monitoring your financial plan is crucial to success, but focusing on balances can lead to too much buying and selling which leads to lower returns. But no, despite the segue opportunity I am going to pass on those topics (I’ve never ridden a Segway either, but that’s a different segue altogether), because nobody wants to talk about money this time of year. That is, unless it’s, “Is there some in the card?”
Nope, no dollar discussions here, but in keeping with the spirit of the season, let’s talk about how we invest our lives and our hearts. I’ll admit at the outset that I’ve turned into a bit of a Scrooge the past few years in spite of my wonderful memories of childhood Christmases. My parents and grandparents were over-the-top in their generosity, in decorations and celebrations, and in the most delicious and joyful feasts imaginable. The years passed and my grandparents up and died on me, and then my parents did the same. Who knew this was going to happen? (Oh yes, that’s right, everyone knows … we’re just never ready no matter when it comes.)
I tried to replicate my memories for my kids. That worked as well as you might expect. Then in the last decade, in-laws, outlaws, challenging finances, broken relationships, and changing times all came to visit; does this sound familiar? Then came some surgeries and I gave up on Christmas trees and outside lights because it was just too physically demanding (I did heal, but now I’m just stubborn). I gave up on presents when I discovered my daughter’s gifts unopened on the top shelf of her closet when I was preparing for Christmas THE NEXT DECEMBER!!! Gifts cards are now the thing. Gas & Groceries!
But I’m not a true Scrooge; I love the Christmas season. I enjoy the season’s sacred music more each year. I hurry less but find time to visit more with folks I haven’t seen nearly often enough. And my house has become the place for non-structured holiday celebrations: There’s food, but no set time to eat. There’re gifts, but those gift cards are often given early to help the kids with their own holidays. The family stops by when their schedules allow and they want a turkey sandwich and a glass of the grape, or some time to play a board game with old Dad, or engage in my favorite holiday pastime: napping.
So there’s some investment advice for you. Invest yourself in those things you love. Cherish the days as they pass all too soon. If shopping and wrapping is your joy, have at it with gusto and happiness. But don’t allow traditions to become burdens; Christmas is a time to celebrate freedom, so celebrate with vigor! And if you find yourself alone, get a little ham from the grocery deli and call some friends to stop by. You can challenge them to a game of Parcheesi. And don’t forget to invest…with all your heart.
PS: That Christmas tree? It’s about 11 feet tall. I now have grandchildren.
Thank you sitting down with me to read a few thoughts about investing. For the last two months, we’ve discussed aspects of having a financial plan; you can find those columns on our website at alleninvestments.com. You can also find bio information for our advisors, including my co-writer this month, Dana Hurley. Dana is very astute regarding social security issues and how they relate to your overall financial plan.
The first question about Social Security is usually, “Will it be there for me?” Most experts predict that it will be…in some form. They expect today’s social security benefits will probably be paid to Americans that are now age 50 and older, but workers age 50 and younger will receive lower payouts and have to work longer than today’s retirees.
The newest question we hear is, “What does the recent Social Security legislation mean to me?” Dana does a great job of shedding light on that confusing topic:
“On Monday, November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015. Among its provisions are changes that shut down two popular Social Security claiming tactics: the-file-and-suspend and the restricted-application strategies.
Section 831(a) has ended the ability for individuals born on January 2, 1954 or later to file a restricted application.
What this means for you:
If you are 62 or older by the end of 2015, you will be able to file a restricted application for your spousal benefit once you reach full retirement age and allow your retirement benefit to grow until you reach age 70.
If you are not 62 or older by the end of 2015, you will not be able to employ this strategy. When you go to file for your benefit, the social security administration will pay you the amount of your benefit or 50% of your spouse’s benefit (whichever is greater). You will not have the ability to collect a spousal benefit and delay your own benefit.
Section 832(b) has ended the ability for individuals to file and suspend their benefits.
What this means for you:
If you were born on or before May 1, 1950, you need to contact the social security administration to file and suspend your benefit if you have not done so already. Those individuals who file and suspend before April 30, 2016 will be grandfathered into the old rules. By filing and suspending your benefit, you will allow for your spouse to file a restricted application for his/her spousal benefit (at full retirement age) and receive that benefit while you delay your benefit. If you do not file and suspend by April 30, 2016, you will have to file and collect your benefit in order for your spouse to receive his/her spousal benefit.
If you are born after May 1, 1950, you will not be able to employ these strategies. In order for your spouse to collect their spousal benefit, you will have to collect your benefit.”
So there you have some facts and figures, as well as some speculation and ideas. And while I’m not sure about you, talk about Social Security leaves me feeling a bit down, even blue. I’m not sure why, perhaps it is because I spend more time worrying about the loss of it than the security of it.
Let’s step back together, though, and gain a little perspective in this season of Thanksgiving. While it is a troubled world and country, we also have blessings and riches in America beyond what we can count. So give a little extra of yourself this season to those in need, and give thanks along the way.