How Is Wall Street Changing?

Long considered one of the major financial powerhouses of the United States, as well as home to some of the richest tycoons ever to snack on caviar, Wall Street’s reputation looks to be on the decline. The financial crisis it helped create certainly hasn’t helped matters. Public opinion towards the institution is at its lowest point in 40 years. Films like “The Wolf of Wall Street” and “Wall Street” depict brokers as greedy, infantile, and nearly subhuman. Occupy Wall Street seems to have made its point. We Americans simply aren’t big on banks right now.

And now it seems like we’ve finally spoken enough truth to power. Wall Street firms are losing business to an upstart new brand of broker known as a Registered Investment Advisor, or RIA. The rise in RIAs has caused a significant siphoning of Wall Street cash flow. Nearly 4.75 trillion dollars has been pulled away from Wall Street’s four largest firms, with Morgan Stanley Smith Barney, Wells Fargo, UBS Financial Services, and Bank of America Merrill Lynch all reporting underwhelming profits, all thanks to a new brand of investor with a healthier, more impartial business model.

RIA’s Change With The Times

RIAs don’t operate on the usual commission-based model, meaning they’re under no impetus to sell you anything special. RIAs are legally bound to put client interests first and are by all accounts effective at it. They take a one or two percent fee that stays steady, win or lose, and Wall Street firms are tripping over themselves to adopt this bold new strategy.

Of course, the financial crash of 2008 cost them some serious goodwill in the public eye, and reforms have been few and far between. The most important reform attempt came with the Dodd-Frank bill, signed into law by President Barack Obama in 2010. In essence, the bill called for more oversight and transparency on Wall Street, which had been allowed to essentially self-govern up until that time. In practice, it’s been a mixed bag. As is usual in our hyper-partisan new world, many from one side of the aisle claimed the bill does far too little, whereas those on the other side claim it’s too much.

In theory, the bill makes sense. Many Wall Street firms have been deemed “too big to fail”, such that their closing would have catastrophic effects on the U.S. economy. The Dodd-Frank bill created several committees intended to monitor these companies and even break up ones that are deemed too massive and dangerous. Caps have also been placed on fees for mortgage brokers who might benefit from overselling property to misinformed consumers. While all this seems reasonable in theory, the actual execution of these powers has sometimes been suspect. In addition, smaller banks and startups have struggled to stay afloat in this new world of heightened caution. It’s a volatile time on Wall Street that will likely continue for years to come.

Be Wary Of Wall Street, Choose Your Investment Team Wisely

Basically, if you’re thinking of investing, keep a wary eye on Wall Street. These banks have cost us all a lot with unhealthy business practices and the attempts to reform them are a mixed bag. RIAs are a growing alternative. Consider pouring your money elsewhere, at least until Wall Street can do some serious housecleaning.

Strategies to Make Higher Levels of Social Security Benefits – Retirement Planning Atlanta GA Calandra Financial Group

The moment you turn 62, the government takes you under its wing and allows you to claim social security benefits each month. While it can be tempting to accept them the day you become eligible, it isn’t always a good idea to do so. Using a strategy where you put off filing your benefits for even a couple of years can help you collect thousands more. With the concept of private pensions disappearing, it can be serious mistake to neglect such options.

Understanding the basics

As far as the Social Security Administration is concerned, age 62 isn’t the official full retirement age; age 66 (or 67 in some cases) is. Being allowed to collect benefits at 62 is a special concession. To avail yourself of it, you need to agree to a penalty: you receive 25% less each month than you would if you waited to full retirement age.

Waiting past the age of full retirement is an option, too: you are rewarded for your patience with an impressive 8% increment for each year. This can boost benefit levels significantly.

These percentages can make more sense with actual numbers. If you are eligible for a $2,000 benefit filing at age 66, you will only get $1,500 filing at age 62 (25% less). If you wait exactly one year past full retirement to age 67, you stand to make $2,160: an extra 8% over the standard $2,000. Waiting still longer to age 68, your second 8% bonus brings your benefit up to $2,332: calculated as an additional on the $2,160.

The basic Social Security strategy for married couples

If you’re single, filing for Social Security doesn’t come with many options. There’s little you can do to boost your income other than to put off filing for a few years past full retirement age. When you file as a married couple, though, you have access to special additional Social Security benefits.

If you make less than your spouse, filing as a couple allows you to collect your own benefit and also half of your spouse’s higher-level benefit (once you subtract your own benefit from it). As an illustration, if you are eligible for a $400 benefit and your spouse is eligible for a $1,000 benefit, filing as a couple allows you to collect your own $400 first; then, for your spousal benefit, you subtract your $400 from half of your spouse’s $1,000 to arrive at $100. You get to collect this amount in addition to your own $400. In other words, when you file as a married couple, you get $500, instead of $400.

Another useful benefit to delaying filing

The surviving spouse benefit is one of the most lucrative parts of the Social Security system for married couples: if the higher earning spouse dies first, the surviving spouse gets to collect 100% of their benefit for life. Since this benefit also includes delayed retirement credits, putting off filing until the age of 70 results in the best possible benefit for the surviving spouse.

The file-and-suspend strategy

A little-known filing method allows married couples to have their Social Security cake and eat it too. It’s called the file-and-suspend method.

To deploy this plan, both spouses need to wait at least until full retirement age to file for their benefits. Once they both file, the lower earner begins to collect their own benefit and also a spousal benefit. When the spousal benefit begins to arrive, the higher earner right away files with the Social Security Administration to have his benefit suspended. This makes sure that he earns credits for deferring retirement.

The lower earning spouse, though, continues to receive their spousal benefits as if the suspension never happened. The higher earner goes on to have the suspension lifted at age 70 to receive enhanced benefits. This plan allows the lower earner to collect additional spousal benefits for a few extra years.

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