Financial Thoughts Spring 2018

In a recent survey, those who claimed Social Security benefits before full retirement age did so primarily because they stopped working (Source: National Bureau of Economic Research, 2017).

It seems children have a negative effect on retirement preparedness. Each child increases the risk of not being able to fund retirement by two percentage points. The increased risk is due to women with children having lower labor participation rates and earning lower wages. At the same time, consumption is higher. The cost for a family of four is 40% greater than the cost for two adults (Source: Center for Retirement Research at Boston College, 2017).

Postponing claiming Social Security benefits from age 62 until age 70 increases the size of benefits by about 75%. Delaying impacts not only the benefits at the time of claiming, but also the survivor benefit for married couples. The Society of Actuaries says nearly half of widows have no income other than Social Security (Source: Society of Actuaries, May 2017).

A recent study found that a preference for value, growth, large, or small stocks is related to an investor’s personality (Source: AII Journal, October 2017).