In this issue: Tax deductions you don’t want to overlook. Fed makes statement on interest rate hikes for 2019. Wall Street awaits a wave of IPO action. More retirees are working after 70. How to adjust to a “surprise” retirement.
2019 Could Be a Big Year for IPOs
One of the ride-share pioneers, Lyft, closed on its initial public offering (IPO) on Friday, and a glance at the IPO calendar shows that as many as 226 companies could soon go public, with Uber and Airbnb possibly among them.
This IPO wave may be a signal of a market top, or it may point to a comeback for risk appetite, which could be healthy for the overall market.
Should some big-name IPOs stumble, it may deter others from moving ahead, which may influence the market psychology. Conversely, an enthusiastic reception may help support further market advances.
[Companies mentioned are for informational purposes and should not be considered a solicitation for the purchase or sale of the securities.]
Fed Sees No Interest Rate Hikes in 2019
On Wednesday, the Federal Reserve held interest rates steady, but lowered its estimate of 2019 economic growth to 2.1%.
Last December, the central bank forecast two rate hikes in 2019. It now expects to leave rates unchanged this year, with one quarter-point hike projected for 2020.
This pivot may acknowledge a slight change in economic conditions. The Fed’s latest policy statement noted that the “growth of economic activity has slowed from its solid rate in the fourth quarter.”
Could Working After 70 Become Routine?
Some baby boomers and Gen Xers hope that they can work into their seventies. Is that hope unfounded? It may not be. Consider the nation’s shifting generational demographics, and how they may reshape the workforce.
In 2035, Americans older than 65 will outnumber Americans younger than 18 for the first time, and by the mid-2030s, the percentage of physically demanding jobs may be lower than it is now. Jobs in information and service technologies could predominate – an ideal environment for highly educated adults who see no reason to stop being productive. Many of these seniors will be aware that the longer you can put off claiming Social Security in your sixties, the larger the monthly benefits are expected to be – currently, they are projected to be as much as 75% larger when claimed at the latest possible age of 70 versus age 62. Evidence suggests that the population of employed Americans is already skewing older. As this Forbes article notes, the percentage of working men aged 65-69 increased 10% from 1995 to 2016; for women aged 65-69, the increase was 12%. Once again, baby boomers could defy expectations.
Dealing with a “Surprise” Retirement
For years, you have imagined the way your “second act” will unfold: when it will start, what you will do, and where you will be. Then life hands you a wild card. You are forced to retire years earlier than you planned and with little notice. How do you adjust?
This turn of events is not uncommon. The respected Center for Retirement Research at Boston College finds that 37% of Americans retire earlier than they anticipated. The big dilemma is that you find yourself potentially having to fund a few more years of retirement with a few years less of accumulated retirement savings. There are ways to respond to that challenge. Many new retirees work a little, and you might be able to find part-time or lower-paying employment, possibly with health care benefits. While not the work you once did, it can help you refrain from tapping your savings too soon. You may want to reconsider when to claim Social Security benefits. You might not want to make big consumer purchases or embark on major vacations until you are confident you can justify them, financially. You may definitely need to run the numbers again, as variables affecting your potential retirement income have changed. This circumstance could call for significant financial adjustments – and a fresh look at where you stand now in relation to your retirement savings and income objectives.
Did You Know?
The westernmost U.S. state is also the easternmost
Alaska holds this distinction thanks to the geographic position of the Aleutian Islands. Part of the Aleutians are on one side of the 180˚ line of longitude, denoting the eastern hemisphere from the western hemisphere, and part of them are on the other side.