Hello,

We get regular updates on the Social Security trust fund. In early May, the Social Security Board of Trustees announced that the trust funds had revenue to pay full benefits until 2035. Generally speaking, the headline's tone is very grim and indicates that the fund will be totally depleted in a matter of years, but this isn’t what’s really happening.¹

Social Security has had a pretty good year. More people are working and, as a result, more people making the Social Security contributions you see in every paycheck.¹

If the Social Security trust fund coffers were to disappear completely, it would imply that no action would be taken to correct the matter between now and 2035. It seems more likely that political pressure would be placed on Washington to fix the problem before it got to that point.

If the trust fund were to run out, it doesn’t mean that Social Security payments would come to a screeching halt. The program would still be taking money out of paychecks and using that money to pay those collecting payments. It's uncertain what might happen to payments, but Social Security has suggested they will continue.

The dour headlines may contribute to several persistent myths about the venerable program. A 2023 survey by the Nationwide Retirement Institute discovered that three out of four adults aged 50 and older believe that Social Security will run out in their lifetime.²

This belief may contribute to other decisions they make that affect their Social Security payments, namely that they don’t wait until they can claim all of their benefits. According to the most recent numbers, the most popular age to begin collecting benefits is 62; in 2022, 29 percent of new beneficiaries started collecting as early as possible, while 62 percent claimed before the full retirement age.²

Not waiting to full retirement age can cause up to a 30 percent cut in benefits. Also, waiting a full year past full retirement, up to age 70, can lead to an 8 percent increase in benefits. That’s per year.²

While not everyone can wait that long to start taking benefits, sometimes for very good reasons, the fact that so few do so could be due to a misunderstanding. Even so, only 16 percent wait to full retirement age, and only 10 percent wait until age 70 and take advantage of those larger benefits.²

Despite all the savings and investing, Social Security still provides many Americans the lion’s share of retirement income. A majority of workers (88 percent) anticipate relying on Social Security for retirement income, suggesting it will remain important to retirees' lives for the foreseeable future.³

We consider Social Security options a vital part of our financial planning process, and we make sure to stay up to date in this area. If you have any questions, please don’t hesitate to reach out to us.

Until next week,

Your Eagle Wealth Team

Tips For Keeping A Gratitude Journal  

A gratitude journal is a great way to practice giving thanks for even the small things in life. We all have things we’re thankful for, and regularly acknowledging them helps us stay present and gracious. 

Are you looking to start a gratitude journal? These tips will help you get started and love the practice. 

• The first thing to do is to get some beautiful stationery and pens that make you happy every time you look at them.

• Once you have suitable materials, start with a prompt such as the ones found on this website. Most people initially writing a gratitude journal don’t know where to start. Using a simple prompt will get your gratitude juices flowing.

• When thinking about things you’re grateful for, focus on depth over breadth. Rather than listing several small items, detail the things you’re more grateful for.

• Try subtraction, not just addition, when considering things you’re grateful for. Reflect on what your life would be like without them.

• Don’t overdo it and burn yourself out. Journaling once or twice a week rather than every day may be more effective, especially as you build the habit.

Keeping a gratitude journal encourages us to pay attention to the good things we’d otherwise take for granted.

Tip adapted from Greater Good Magazine¹¹

The Week on Wall Street

Stocks finished the last week of June and Q2 mixed as investors digested a fresh round of economic data.

The Standard & Poor’s 500 Index slipped 0.08%, while the Dow Jones Industrial Average also dipped 0.08 percent. The tech-heavy Nasdaq Composite gained 0.24 percent. The MSCI EAFE Index tracks developed overseas stock markets and rose 0.27 percent for the week through Thursday’s close.⁴

Nasdaq Regains Lead

Last week opened with the S&P 500 and Nasdaq heading lower, while the Dow rallied on momentum from the prior week. But by mid-week, the leadership shifted with the Nasdaq pushing higher.⁵

With the back half of the week packed with fresh economic data, conflicting stories developed about the economy. New home sales fell 11.3 percent in May—the largest month-over-month drop in a year and a half—while the supply of new homes hit a 16-year high. Meanwhile, first-quarter GDP revised slightly to 1.4 percent higher, and durable goods increased in May.^6,7,8

Friday's personal consumption and expenditure (PCE) data showed that core inflation slowed to 0.1 percent in May over the prior month and 2.6 percent year-over-year—its lowest annual rate in three years. Both figures were in line with expectations. Stock prices initially rallied on the upbeat inflation news, but the early gains faded as the trading day progressed.⁹

Divergent Speakers

Federal Reserve officials have worked to communicate that despite the progress made on inflation in recent months, it remains above the Fed’s 2 percent target.

Last week, Fed Governor Michelle Bowman surprised the markets when she indicated, “I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse.” Fed Chair Powell, scheduled to speak on July 2, told investors on May 14, “I don’t think that it’s likely, based on the data that we have, that the next move that we make would be a rate hike.”¹⁰

Source: YCharts.com, June 15, 2024. Weekly performance is measured from Monday, June 10, to Friday, June 14. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.

1. SSA.gov, May 6, 2024, “Strong Economy, Low Unemployment, and Higher Job and Wage Growth Extend Social Security Trust Funds to 2035”

2. CNBC.com, May 19, 2024, “Social Security’s ‘biggest myth’ leads people to claim early, expert says. Even a slight delay can boost retirement income”

3. EBRI.org, April 25, 2024, “Results From the 2024 Retirement Confidence Survey Find Workers’ and Retirees’ Confidence Has Not Recovered From the Significant Drop Seen in 2023, but Majorities Remain Optimistic About Retirement Prospects”

4. The Wall Street Journal, June 28, 2024

5. The Wall Street Journal, June 28, 2024

6. CNBC.com, June 27-28, 2024

7. AP News, June 27, 2024

8. Reuters, June 26, 2024

9. CNBC.com, June 28, 2024

10. CNBC.com, June 25, 2024

11. Eatingwell.com, January 29, 2023

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