The robots are taking over. Can your job be
replaced?
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Fourteen foods you can eat as much of as you want to and not gain weight.
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Five ways in which millionaires and billionaires are
cheap.
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Want a high-paying, in-demand job? Here are twelve skills you will need.
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Here's a no-knead, no-fuss recipe that will get you baking bread every week.
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Do you know people who have trouble telling the truth? Here's what frequent liars actually think and why.
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When you send your children of to college, will they become less religious?
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Do you enjoy your Starbucks coffee? You can cut back on the
high price.
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We are pleased to announce the launch of our new website,
www.Chornyak.com. With the intention of better serving your financial needs, we have designed this site to provide quick and efficient access to our information and services, and it is now mobile friendly. We are
committed to working with you to achieve your financial goals, and we hope that the new website will only enhance our relationship. Please visit the site often, as we will frequently update content and continue to improve our online presence.
Student-loan debt is a major concern for a large percent of American families. However, as Commonwealth Financial Network points out there is a major program that will
forgive the student loans of borrowers employed in many public-service occupations. Be sure to read our feature article below for more information on the The Public Service Loan Forgiveness Program (PSLFP)
Did you know that computers and robots are taking over many types of tasks, shoving aside some workers while boosting the productivity of specialized employees, contributing to the gap? Get more information on this situation by clicking on the second link in the What's Happening Now section on the left.
Our second feature article below gives some important information on Social Security payments so that you can effectively manage your expectations regarding timing and spousal benefits.
We enjoy hearing from our clients and newsletter readers. Please contact us with any questions or comments: 614-888-2121 or 877-389-2121 toll free
, or by e-mail at [email protected].
Sincerely,
Joe
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Public Service Student Loan Forgiveness: What you should know
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From Commonwealth Financial Network: The Public Service Loan Forgiveness Program (PSLFP) began in 2007 with a simple idea: forgive the student loans of borrowers employed in crucial but often low-paying government or nonprofit positions after they make timely payments for 10 years.
Guidance from the U.S. Department of Education lists a broad range of jobs that are eligible for loan forgiveness: law enforcement, emergency management, military service, early childhood education, public librarians, health care providers for disabled or incapacitated individuals, and legal aid attorneys. The Department sent letters to borrowers to certify their eligibility for the PSLFP.
Now, the Department is notifying some borrowers who chose their career path based on the PSLFP, worked for 10 years in public service jobs, and made 120 loan payments that their debt does not qualify for forgiveness. The Department maintains that its certification letters are neither binding nor a final determination of a borrower's eligibility. Understandably, borrowers are reacting with anxiety, outrage, and litigation. And, because of a pending lawsuit brought by the American Bar Association, the Department hasn't clarified what types of loans, employment, and payments qualify for loan forgiveness.
What should you do if you thought your student loans would be forgiven under the PSLFP? Or, what if your child or grandchild is pondering an altruistic career choice that might qualify for the PSLFP? A good starting point is to review the Department's
current guidance, which outlines four criteria: loan, payment, payment program, and employment.
What type of
loan qualifies for the PSLFP?
It's imperative for borrowers to understand the terms of the loan and verify that it will qualify for loan forgiveness. Only
direct federal student loans qualify for the PSLFP. The name of the loan will identify whether it is a direct loan. Look for these specific titles: "direct subsidized loans," "direct unsubsidized loans," "direct PLUS loans," and "direct consolidation loans."
If you have other types of federal student loans, such as a Perkins, Stafford, or Federal Family Education Loan, ask whether it will be possible to consolidate that debt into a direct consolidation loan. If you consolidate direct and indirect loans, only loan payments made after the consolidation is complete will qualify for the 120-payment threshold. Note that consolidation effectively resets the count, and prior payments made on direct loans will not count.
What type of payment qualifies for the PSLFP?
All 120 loan payments must be made in full and on time while the borrower is working full time in a qualifying public service position. The payments do not have to be consecutive. If, however, a borrower pays more than required, the additional amount will not be applied either to the next payment or the 120-payment goal. Also, payments made while the borrower is still in school or in a grace, deferment, or forbearance period are not qualifying payments.
What type of loan repayment program qualifies for the PSLFP?
Because the loan repayment term for student loans is 10 years, borrowers who are not in an income-driven program will repay their loans in 120 payments. Consequently, only income-driven programs that base repayment on the borrower's monthly income will qualify for loan forgiveness under the PSLFP. Graduated and extended repayment plans, which extend the repayment term, are not based on monthly income and do not qualify as income-driven repayment programs. The primary income-based repayment programs are:
- Revised Pay As You Earn Repayment Plan (REPAYE Plan)
- Pay As You Earn Repayment Plan (PAYE Plan)
- Income-Based Repayment Plan (IBR Plan)
- Income-Contingent Repayment Plan (ICR Plan)
Continue reading here.
© 2017 Commonwealth Financial Network®
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Six reasons your Social Security benefits may be smaller than you expect
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Kiplinger warns that with this program timing is everything.
The check isn't in the mail -yet
Your expectation
: You're going to throw yourself a big birthday party with your first Social Security check.
The reality: Don't hold your breath to blow out the candles. Social Security pays the first benefit the month after you file (and the government doesn't send paper checks anymore).
If you were born in November, for instance, you'd generally get your first benefit, via electronic deposit, in December. If you claim Social Security as soon as you turn 62, however, you must be 62 for the entire month to be considered eligible. Thus, if you turn 62 on November 15, you're first considered eligible in December and won't collect your first benefit until January.
An exception to the exception: Social Security, in its wisdom, considers you to be a year older the day before you actually celebrate your birthday. If you turn 62 on November 2, your eligibility date is November 1, making you eligible for the entire month. Likewise, if you turn 62 on November 1, the eligibility date is October 31. In both cases, because you would be 62 for the full month of November, your first benefit would arrive in December.
If you were born on the first through the 10th of the month, your first check will be deposited to your account on the second Wednesday in December; if your birthday falls on the 11th through the 20th, the check goes into your account on the third Wednesday; for people born on the 21st through the 30th or 31st, the payday is the fourth Wednesday. (A couple more exceptions: If your benefit is based on the work record of a spouse, his or her birthday-not your own-controls when you'll be paid, and if you were receiving benefits prior to May 1997, you'll get your payment on the third of the month.)
Extra credits take extra time to appear
Your expectation: You filed for Social Security benefits at age 68, rather than your full retirement age of 66, knowing you'll get an 8% boost in benefits for every year you wait after full retirement age, until age 70.
The reality: When you receive your first payment, it won't reflect the 16% bump-up.
If you delay taking Social Security after your full retirement age (66 if you were born between 1943 and 1954) but file for benefits before reaching age 70, you may have to wait almost a year after filing before some of that extra money kicks in. That's because the delayed credits for the year in which you file aren't added to your benefit until January of the following year.
Say you turned 66 in June 2015 and file for benefits in June 2017. Your first Social Security benefit should reflect your delayed credits for July 2015 through December 2015, plus all of 2016. But you'll have to wait until January 2018 to get the credits for January through June 2017. Starting in January 2018, your benefit will include the full 16% bump.
Restrictions on a restricted application
Your expectation: You want to take advantage of a provision that lets you file a restricted application to claim benefits based on your spouse's record, so you can collect some cash while your own benefit grows at 8% a year between age 66 and age 70. You file your claim several months in advance of your full retirement age to be sure it goes through on time.
The reality: Only workers who reached age 62 on or before January 1, 2016, can use the restricted application strategy, and it's open to them only when they reach full retirement age (which is 66 for those born from 1943 through 1954).
Unless you specify on your application the date you want your claim to be processed, Social Security might jump the gun, precluding your ability to file a restricted application and giving you your own benefit instead of the spousal benefit.
Payment for the month a beneficiary dies
Your expectation: Your spouse, who died on March 30, received his final Social Security benefit as an electronic deposit to your joint bank account on April 3. You'll get to keep the deposit.
The reality: Uncle Sam wants his money back. The rules say a beneficiary must live for the entire month to qualify for a benefit for that month (it's not prorated by the date of death).
You or the funeral director who handled your spouse's funeral should have notified Social Security of the death to stop future payments. Contact the bank and ask that the money be returned to Social Security.
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Chornyak & Associates honored in Financial Times Top Financial Advisers 2017
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We are pleased to announce that Joseph A. Chornyak, Sr.,
CFP®,
Joseph A. Chornyak, Jr.,
CFP®, and
Robert A. Mauk,
CFP®
have all been named to the 2017 edition of the Financial Times 400 Top Financial Advisers. The list recognizes top financial advisers at national, independent, regional and bank broker-dealers from across the U.S.
This is the fifth annual FT 400 list, produced independently by the Financial Times in collaboration with Ignites Research, a subsidiary of the FT that provides business intelligence on asset management.
Financial advisers from across the broker-dealer channel applied for consideration, having met a set of minimum requirements. The applicants were then graded on six criteria: assets under management (AUM), AUM growth rate, experience, advanced industry credentials, online accessibility, and compliance records. There are no fees or other considerations required of advisers who apply for the FT 400.
Approximately 800 qualified applications were received; 400 advisors were selected, representing 50 percent of all applicants.
The final FT 400 represents an impressive cohort of elite advisers, as the "average" adviser in this year's FT 400 has 27 years' experience and manages $1.7 billion in assets. The FT 400 advisers hail from 38 states and Washington, D.C.
With more than 35 years' experience in the financial planning field, Joe, Sr. has served as the Managing Partner of the firm since its incorporation. Bob Mauk has been with the firm over 30 years and Joe, Jr. over 25 years. The firm's financial advisory philosophy is based upon broad investment diversification and conservative risk taking. All three hold Series 7 securities registrations and are Investment Adviser Representatives of Commonwealth Financial Network.
The Financial Times 400 Top Financial Advisors is an independent listing produced annually by the Financial Times (March, 2017). The FT 400 is based on data gathered from advisors, broker-dealer home offices, regulatory disclosures, and the FT's research. The listing reflects each advisor's status in six primary areas: assets under management, asset growth, compliance record, experience, credentials, and online accessibility. This award does not evaluate the quality of services provided to clients and is not indicative of this advisor's future performance. Neither the brokerages nor the advisors pay a fee to the Financial Times in exchange for inclusion in the FT 400.
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Market Update
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Mixed month for markets ends with gains
April was a volatile month for financial markets, but early declines turned to gains at the end. Investors reacted positively to U.S. tax reform proposals and the potential for a pro-European Union (EU) outcome in the French presidential election. The S&P 500 Index was up 1.03 percent for the month, the Dow Jones Industrial Average rose 1.45 percent, and the Nasdaq gained 2.35 percent.
Markets were also supported by improving fundamentals. The blended earnings growth rate for S&P 500 companies for the first quarter was 12.5 percent, according to FactSet. Although just over half of companies have reported earnings so far, this healthy rate is well above expectations and the highest number we've seen since the third quarter of 2011. This level of earnings growth is expected to continue over the next several quarters.
Because fundamentals drive performance in the long run, the earnings number represents encouraging news for future equity results. All three major U.S. indices stayed above their 200-day moving averages in April, which was a positive technical sign for markets as well.
Foreign equity markets fared even better than domestic ones. The MSCI EAFE Index rose 2.54 percent, with most of its gains occurring after the first round of the French election. Reports of faster-growing economies around the world also helped markets. Although the MSCI Emerging Markets Index experienced a bit more volatility in April, it finished with a 2.21-percent gain. Technical indicators were also positive for both indices throughout the month.
Fixed income also did well in April. The Bloomberg Barclays Aggregate Bond Index ended the period with a 0.77-percent gain, and the Bloomberg Barclays U.S. Corporate High Yield Index returned 1.15 percent. High-yield spreads remain near their post-recession lows.
Interest rates dropped slightly during the volatile month. The 10-year Treasury rate started April at 2.35 percent, declined to 2.18 percent mid-month, and ended the period at 2.29 percent.
Economy improves amid signs of slowing growth
Much of the economic news was positive in April, although overall growth appeared to slow. Differences between strong sentiment and weak spending continued to be a concern.
Gross domestic product (GDP) growth for the first quarter of 2017 was estimated at 0.7 percent, down from 2.5 percent at year-end. Although this is something to watch, slower growth in the first quarter has been the norm during the current recovery. Since 2010, first-quarter GDP growth has averaged 0.9 percent, before rebounding to an average of 2.4 percent for the other three quarters of the year. This pattern suggests that seasonal factors are at play and that growth may accelerate for the rest of 2017.
Supporting this notion, consumer sentiment has improved substantially since last year's election-up to its highest levels since the end of the dot-com boom. Although it has started to stabilize recently, it remains high. These developments appear to be related to expectations of policy changes in Washington, DC.
Business confidence is also strong. Though the ISM Manufacturing and Non-Manufacturing indices-important indicators of overall business sentiment-decreased slightly in April, they remain at high levels. This signals the likelihood of further expansion. Durable goods orders, which are a proxy for business investment and therefore confidence, also increased in April, suggesting that business investment may start to accelerate.
Hard data lags soft numbers
Unfortunately, this optimism hasn't translated into increased spending. Consumer spending was especially disappointing in April. Retail sales dropped unexpectedly, and the previous month's gain was revised to a loss. Weather and low gas prices played a part in the decline, but ultimately increases in consumer spending will be critical for faster growth. Consumer prices, personal consumption, and personal spending also came in weaker than expected for the month.
On the business side, hard data also continues to lag sentiment. Manufacturing output missed expectations and declined for the first time in seven months. In addition, results for the previous two months were revised downward. The positive numbers from the last six months indicate that the slowdown may be temporary, but this gauge should be monitored.
The March jobs report also was quite weak, as the headline number of 98,000 new jobs fell well below expectations. On the other hand, the unemployment rate and the underlying data surrounding wage growth were positive. When combined with the strong January and February employment reports, these factors may indicate that the disappointing March results were an aberration. A healthy job market is essential for continued high levels of consumer confidence, so this will be an important indicator going forward.
Overall, the economy is still growing, and we may see growth accelerate in the remainder of the year once consumers and businesses translate their optimism into spending.
Housing continues to shine
One of the bright spots in the economic recovery has been the strength of the housing market. The trend continued in April, as housing data came in largely better than expected.
Home builder confidence remains near post-recession highs in large part due to rising wages and affordable pricing. And, although housing starts declined slightly during the month, the long-term trends are positive. An increase in building permits should lead to more growth in new home supply.
Existing and new home sales increased more than expected in April, exhibiting continued strong demand. The growth in new
home sales was particularly impressive because this measure was expected to decline. Strong demand despite low supply bodes well for future growth in housing. It indicates that, at least in this sector of the economy, consumer confidence is translating into spending.
Political risks continue to drive markets
Domestically and abroad, political risks appear to be playing a larger part in financial markets. This was certainly the case during April.
In the U.S., the major political news was the Trump administration's release of its first proposal for comprehensive tax reform. The plan includes a dramatically lower corporate tax rate, a change in the way companies are taxed on earnings in foreign countries, fewer personal income tax brackets-from seven to three-and a lower top rate. Given the broad scope of the proposal and the current political climate, the proposal will likely lead to vigorous debate between the legislative and executive branches. Because much of the strength in consumer and business sentiment can be attributed at least in part to the promise of tax reform, the negotiation will be watched closely.
In Europe, the news was also dominated by politics. World stock markets bounced higher following first-round results in the French presidential election-widely seen as a referendum on the future of the EU. Emmanuel Macron, a strong EU proponent, moved into the second round and is expected to win the election against the far-right nationalist candidate Marine Le Pen. A surprise win by Le Pen, however, would likely create volatility in global financial markets.
Meanwhile, tensions surrounding North Korea continue to escalate. The topic was a key concern during the early April meeting between President Trump and China's President Xi. So far, the U.S. and China appear to be working diplomatically to defuse the crisis. The cooperation between the U.S. and China has not only served to reduce worry about North Korea but also to ratchet down the level of tension regarding economic issues.
Risks remain, but the future is bright
Despite the very real risks domestically and globally, the current outlook for the rest of 2017 is solid. Multiyear highs in consumer sentiment, as well as the potential tailwinds of looser regulations and tax reform, point toward the possibility of accelerated growth. How much this confidence will translate into increased spending remains to be seen. From a political standpoint, concerns remain, but so far actual results have been much less worrisome than analysts had expected.
As always, the possibility for shocks and instability continues. Therefore, a well-diversified portfolio designed around long-term needs is still the best strategy for meeting personal investing goals.
Co-authored by Brad McMillan, senior vice president, chief investment officer, and Sam Millette, investment research associate, at Commonwealth Financial Network®.
All information according to Bloomberg, unless stated otherwise.
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