In The Know, Volume IX, Issue 31

Monday, July 28, 2008

A. Market Report

U.S. stocks closed up on Friday – but mixed for the week.

After dropping 283 points on Thursday, the Dow came back to finish in positive territory on Friday as oil continued to drop and a consumer sentiment report showed that people had more confidence in the economy than original suspected. However, the close of business on Friday brought a report of two more mid-size banks being taken over by the FDIC.

Oil prices ended the day down on Friday and down for the week at $123.26 a barrel, a drop of $5.62 a barrel over the previous week’s close. In the past two weeks, oil prices have dropped better than $22 a barrel, bringing some relief even at the gas pumps. Gold prices ended the day on Friday at $926 an ounce, down better than $32 over the week before.

For the week, the major market indexes closed as follows:

For the week, the Dow dropped 1.09 percent, the Nasdaq added 1.22 percent, and the S&P 500 fell 0.23 percent.

B. Social Security Earnings Statement

Now let’s be truthful. Did you trash your Social Security Earnings Statement when you received it? Every year (after reaching 25 years of age), usually about three months before your birthday, you should receive a report from the Social Security Administration called Social Security Earning Statement. This report, four pages in length, provides your projected benefits status. In fact, on page two of the statement your projected benefits are listed based upon your current contribution levels. From the statement, you can determine what Social Security is projecting that you will draw upon reaching retirement age. The statement also provides you with details on your Medicare eligibility.

Besides the information on page two that is helpful for your future financial planning, the most important page of the whole report is your statement of earnings on page three. The report actually details how much you made each year during your working career and how much you paid into the Social Security system each year. It is critical that this information is correct. If not, you will be short-changed on what you draw from Social Security.

It is important to remember that Social Security benefits are calculated based upon your total earnings during your lifetime. There continues to be a myth that your Social Security benefits are based upon your “top three earning years” or your “last three earning years.” That is nothing but a myth. Your Social Security benefits, in fact, are based upon your lifetime of work, or more specifically, on your 35 best years of earnings from work. Therefore, it is critical that all years are properly accounted for on the earnings statement. If not, you should provide the Social Security Administration with data to correct the errors. It also is much easier to make the corrections now than to be forced to make such corrections in the days leading up to the time that you want to draw your first Social Security check. So read that Earnings Statement carefully and make sure that it is correct.

Remember that it is your responsibility to make sure that Social Security has accurately recorded your earning history. To correct your earnings statement – or to obtain an earnings statement, you may call Social Security at 1-800-772-1213 or apply for such over the internet at www.ssa.gov/mystatement.

C. Retirees at Record Levels

According to research by BusinessWeek magazine, there are more than 10,000 baby-boomers retiring every day! It is expected that more than $17 trillion dollars will be withdrawn from savings and retirement accounts over the next 20 years to provide for new retirees.

Are you a baby boomer looking to retire soon? Have you made adequate preparation for retirement? Much thought should be given to how you will survive in retirement well before you accept the “golden watch.” Some planning now will eliminate many hardships in the future.

Art Rhodes
President and CEO
Church of God Benefits Board, Inc.

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The Board of Trustees and the staff of the Benefits Board are not engaged in rendering financial advice, legal advice, or other financial planning services. If such advice is desired or required, the services of a competent professional should be sought.