2013 spring newsletter

G A I S E RFINANCIAL GROUP

G

moneymattersmoneymattersSPRING 2013

welcomeDear Client –

We hope this letter finds you well and enjoying a happy and prosperous 2013. Winter is nearly

over and spring is here! So far, 2013 is proving to be a great year at Gaiser Financial Group.

For this issue of our seasonal newsletter, we’ve explored some important issues that could

affect our clients and their long-term financial strategies. In particular, we’ve placed a fair

bit of attention on serious debt issues that our country is facing. We believe that America’s

unsustainable debt is one of the critical economic issues of our time. In our report, we’ve

covered some of the history of U.S. debt and discussed prospects for future reform.

In this issue we’ll be covering:

Out of Control: America's Battle Against

Unsustainable Spending and Rising Taxes 3

7 Foods That Keep Your Heart Healthy 10

Enjoy an Alaskan Cruise 11

What is the Best Age to Retire? 12

Better Passwords = Better Security 14

We sincerely hope that you find this journal interesting, informative, and educational. We’re

constantly seeking out new ways to educate our clients and provide them with insight into

the issues behind market movements. We are always interested in hearing your feedback

about our newsletter. If you have any ideas you’d like to share with us or have questions you’d

like answered in one of our issues, please let us know. If you have any family or friends who

would enjoy receiving their own copy, please let us know, and we will be happy to add them

to our growing list of subscribers.

As always, it is an honor and a privilege to serve you. On behalf of all of us at Gaiser Financial

Group, thank you and best wishes for Spring 2013.

Warm Regards,

Out Of COntrOl

AmericA's BAttle AgAinst UnsUstAinABle spending And rising tAxes

/While lawmakers swerved to avoid the fiscal cliff, they left considerable work to be done in tackling America’s serious deficit spending issues and rising national debt. If legislators are not able to develop meaningful long-term spending reform, America may face a future of

rising taxes, high interest rates, and reduced economic growth. This report will discuss the major issues at stake and what they mean for taxpayers and investors./

4 MONEY MATTERS SPRING 2013

Why is high public debt bad for the economy?

An analysis of economic data for 22 countries over more than a century indicates that high levels of government debt result in lower levels of economic growth. A 2012 economic study examined over 110 years of economic data and concluded that advanced economies whose debt levels reach 90 percent of GDP face much slower economic growth. Their research showed that these periods of reduced growth often lasted longer than a decade.1 According to the Congressional Budget Office’s 2013 Long Term Budget Outlook Report, U.S. debt levels may reach 76 percent of GDP at the end of 2013, the highest levels since just after World War II.2

In simple terms, high levels of national debt are bad for several reasons. First, servicing debt is very expensive. The more the U.S. borrows, the higher our interest payments to bondholders are each year. By 2020 the federal government will spend a projected $900 billion each year just to pay interest on existing public debt. That’s more than the government currently spends on Social Security.

Second, our growing debt means that the federal government must increasingly rely on foreign investors to pay its bills. This can give significant bargaining power to foreign governments such as China, the largest foreign holder of U.S. debt and have long-term effects on our strategic and military interests. Third, just as with an individual borrower, growing national debt sends signals to investors (our creditors) that the U.S. is becoming a credit risk. While a person might be able to max out his or her credit cards, at a certain point the interest rates on those cards may jump from 12 percent to 30 percent, sending that individual into a debt spiral of increasingly higher interest payments. Similarly, as our debt grows, the government may have to offer higher and higher interest rates on Treasury Bonds to convince investors to buy.

hoW did We get here?

America has not always operated with such a large public debt. After financing WWII through deficit spending (and selling war bonds to the public), the

America is on the path to a dangerous accumulation

of public debt. Current government spending and debt

levels are perilously high

and future spending is on

track to rise even higher

due to increased spending

on entitlement programs

and interest payments on

existing debt. Projections

show that pressures from

an aging population, rising

healthcare costs, and

federal health insurance

subsidies will only intensify

the problem.

In order to avoid a serious

economic crisis, U.S. policy

makers should learn from

the experiences of Greece

and Japan and address our

public debt issues. The

federal government is

quickly exhausting its ability

to pay its bills. Future debt

debates should focus on

the need to reduce excess

federal spending while

protecting our still-fragile

economic recovery.

Key Termsdeficit spending: Government spending that is in excess of revenue, using funds raised by borrowing rather than from taxation.

public debt: Total debt owed by a government or a nation to its creditors. The national debt of a country is often measured as a percentage of GDP.

gdp: Gross Domestic Product, a measure of the total value of goods and services produced within a nation’s borders. GDP growth is a measure of economic growth.

debt ceiling: A debt limit introduced during World War I designed to give the U.S. Treasury the flexibility to borrow without having to get Congressional approval to pay for expenses Congress has already approved. It has been raised 78 times since 1960.

u.s. treasury securities: The U.S. finances its deficit spending by issuing short-term and long-term Treasury securities. These notes, bonds, and bills are sold to individual, corporate, and government investors around the world. Since the U.S. is the largest economy in the world, Treasury bonds are considered by many to be “safe haven” investments with very low risk. In this report Treasury bonds and Treasury securities will be used interchangeably.

national debt held mostly stable for the next 25 years, rising from $242 billion in 1946 to $283 billion in 1970. However, over the last 30 years, overall U.S. public debt has increased under every president, Democrat and Republican. The largest increase in history was under President George W. Bush who, faced with the post-9/11 recession, cut taxes, added new benefits to Medicare, and fought wars in Iraq and Afghanistan.3

As our national debt has grown, so have our interest payments to creditors. In 2003, the federal government paid out approximately $150 billion in interest costs; in 2012, the government paid nearly $360 billion in interest,4 or approximately 2.38 percent of GDP.5 These interest payments cost more than federal spending on education, transportation, housing, and urban development – combined. Fortunately for Americans, our interest costs have remained relatively low because the world has continued to lend money to the U.S. at very low interest rates, even as our national debt has increased.6

However, in 2011, Standard & Poor’s, an international credit rating agency, downgraded America’s long-term sovereign credit rating (similar to a credit score) for the first time in history with a warning that further downgrades were possible if the U.S. did not address debt reform.7 Losing our AAA credit rating is significant since it means that the U.S. government must pay higher interest rates to bondholders to compensate them for the higher risk. According to some estimates, the

downgrade to our credit rating may increase interest costs by as much as $100 billion over time.8 U.S. Treasuries have long been considered the gold standard among investments and have been historically treated as essentially risk free. If their security is questioned, investors may shift away from them.

The financial crisis exacerbated America’s debt problem. The federal government’s response to the financial crisis included some of the most aggressive fiscal and monetary policies in history, adding (by one 2010 estimate) over $1.5 trillion to the national debt.9 These funds were spent on a variety of activities, from bailouts to banks and debt guarantees, to TARP funds, and the various economic s t imulus acts. To put that number into context , some economists estimate that the government’s extraordinary actions prevented the additional loss of $5.2 trillion from the economy and kept the Great Recession from becoming the second Great Depression.10

Once the worst of the financial crisis had passed and the economy seemed on its way to recovery, economists and lawmakers turned their attention to addressing the country’s debt problems. We last confronted our debt problem in 2011, when the debt ceiling became the central battleground of budget talks between Republicans, who had taken control over the House in the 2010 elections, and

Key Players

the federal reserve: The Fed is the central banker for the U.S. government and attempts to promote and stabilize economic growth by buying and selling Treasury securities on the open market. Its mandate is to achieve maximum employment, price stability, and moderate long-term interest rates. Fed chairman Ben Bernanke has stated that debt reduction is critical to long-term economic growth.

the treasury department: The Treasury manages federal finances once Congress and the President have set fiscal policy. It does this by collecting taxes via the I.R.S. and financing deficit spending by selling Treasury bonds. When public debt hits the debt ceiling, unless Congress votes to raise it, the Treasury must stop issuing Treasury bonds and can only finance spending by relying on incoming tax revenues or through extraordinary measures such as borrowing from federal retirement funds.

congress: The Constitution gives Congress the power to control federal spending and borrowing, meaning that legislators are responsible for making final decisions about the federal budget each year.

the president: The President creates a budget proposal and sends it to Congress for approval each year. Although Congress holds the power to modify the budget, since the President must approve each bill Congress passes, they are usually reluctant to ignore the President’s priorities.

congressional budget office: The CBO is a nonpartisan advisory agency to Congress that produces reports on the long-term economic outlook of the U.S.

Source: “Public Debt Overhangs: Advanced-Economy Episodes Since 1800,” Journal of Economic Perspectives, Vol 26, No. 3 (Summer 2012), pp. 69-86

SPRING 2013 MONEY MATTERS 5


President Obama and the Democrats, who controlled the Senate. Worried about the long-term effects of high levels of public debt, Republicans refused to raise the debt ceiling without a deficit-reduction package. The debt ceiling is an administrative tool used by the U.S. Treasury to pay for federal expenditures included in the year’s budget. When the U.S. government reaches its debt ceiling, the Treasury loses the authority to finance any more spending through the sale of Treasury bonds.11

The political impasse was resolved at the last minute in July 2011 by a temporary extension of the debt ceiling and a plan to force mandatory federal spending cuts (sequestration) if large-scale deficit reduction had not happened. This failure by politicians to address spending issues is considered by many analysts to have contributed to the slowing of the economic recovery in late 2011 and the downgrade of U.S. debt. The mandatory sequestration instituted as part of the 2011 deal was scheduled to take effect on January 1, 2013 and formed part of the fiscal cliff. However, the American

Taxpayer Relief Act of 2012 pushed the deadline back to March. Although the federal government was not forced into sequestration, the government officially reached its authorized borrowing limit on December 31, 2012, pushing the debt ceiling showdown until mid-February, when the Treasury Department’s extraordinary borrowing measures would run out.12

The fiscal cliff deal raised $620 billion in new revenue

by allowing the Bush income tax cuts for upper income

Americans to expire, raising estate taxes, and limiting

deductions and exemptions.13 By making permanent

the Bush-era tax rates for 98 percent of Americans, it

avoided the fiscal woes that might have pushed America

back into recession. However, it did not address the

debt ceiling or make provisions for deficit reductions,

leaving much work left undone.

In mid-January, Congress passed legislation to eliminate the debt ceiling until May, allowing the Treasury to resume ordinary operations. However, the bill includes

Source: CBO Budget and Economic Outlook 2013 to 2023

government budget hypothetical family budget

Tax Revenue/Annual Income $2,900,000,000,000 $29,000

Current Spending $3,803,000,000,000 $38,030

Annual Deficit $903,000,000,000 $9,030

Accumulated Debt $16,530,000,000,000 $165,300

Source: NationalPriorities.org

The compromise reached during the fiscal cliff debates

in December 2012 and January 2013 left many key

budget issues unresolved. However, the good news is

that we are beginning to have the difficult conversations

that we hope will lead to meaningful budget reform

in the near future.

Where are We heading?

In the short term, lawmakers must deal with a series of fiscal policy decisions that could have far-reaching effects on America’s financial future. In the near term, lawmakers will have to confront the debt ceiling and sequestration cuts, which were only temporarily put off by the fiscal cliff deal. Americans appear to have mixed opinions. A January 2013 Associated-Press GFK poll found that 39 percent of Americans think any debt ceiling increase should come with a serious plan to reduce spending. Another 21 percent believe that the ceiling should not be raised at all.18

In the coming months, lawmakers will have a number of important deadlines to confront:

Although it is possible that lawmakers may continue to kick the can down the road and put off confronting the country’s deficit spending issues, doing so would send the message that the U.S. is not willing or able to get its spending under control. This could lead to a further downgrade of U.S. debt and risk our still-fragile economic recovery.

While both political parties approach America’s debt problems from different angles, just about everyone agrees that today’s trajectory is unsustainable, so the question is not whether the debt and deficit need to

a provision that would withhold the pay of lawmakers who failed to pass a budget blueprint by April 15.14

Where are We noW?

In fiscal year 2013, the U.S. government anticipates

taking in $2.9 trillion in tax revenues and has requested

$3.803 trillion to meet its budget obligations. This

means that our projected budget deficit for 2013 will

be approximately $900 billion; another way of looking

at this is to say that for every dollar of tax revenue,

the federal government anticipates spending $1.31.15

Other estimates account for the tax increases under

the fiscal cliff deal and put the budget deficit at closer

to $845 billion.16 Regardless of the number you choose

to accept, we are adding nearly a trillion dollars to the

national debt this year.

To put things in perspective, let’s strip away a few zeros

and compare what your household finances would look

like if they resembled the U.S. government budget. The

United States budget process anticipates outspending

revenue, creating a deficit budget, and increasing the

level of federal debt. This would be as if a household

earning $29,000 per year were to overspend each year

by nearly $9,000. Over time, this deficit would lead

to an accumulation of debt far greater than annual

income. In most cases, a family would find it difficult to

acquire this much debt, as creditors would eventually

stop lending members money. However, due to the

strength of the dollar and the status of U.S. Treasury

securities as “safe haven” investments for much of the

world, the U.S. has nearly unlimited access to credit.

A February 2013 report by the Congressional Budget

Office laid out the issue starkly: If Congress leaves

current laws unchanged, the debt will be 76 percent

of GDP by the end of 2013, after which it will stabilize

for a number of years (reaching 77 percent of GDP by

2023), until the burden of our entitlement spending

and interest payments cause the debt to balloon

to dangerously high levels. This could put the U.S.

in a downward spiral of rising interest rates and

slowing economic growth similar to what Greece is

experiencing today.17



improve, but when, and by how much. As with a household budget, in order to get deficit spending under control, one needs to either cut spending (federal spending cuts), or increase income (increase taxes). Unfortunately, neither choice is risk-free and comes with consequences to individual Americans and the economy.

Congressional Budget Office (CBO) projections suggest that the debt ratio will be temporarily stabilized for several years. However, as more Americans retire, changing demographics will soon cause spending on entitlement programs such as Social Security, Medicare, and Medicaid to rise. These spending increases will combine with higher interest payments on existing debt and cause the national debt to skyrocket by the mid-2020s.

Some analysts argue that, with the economy still recovering and unemployment high, further fiscal cuts should wait. They fear that significant austerity measures could threaten economic growth and set the country back. Arguments on the other side claim that cuts need to be made now, before more damage is done to our country’s balance sheet. The simple reality is that there will never be a perfect time in which to reduce government spending and tackle our debt problem. The longer we wait, the more politically difficult it will be. Using CBO data, the Committee for a Responsible Federal Budget estimates that, using current policies, the national debt will rise above 100 percent of GDP by the early 2030s. According to some experts, we need a package of at least $2.4 trillion in cuts or revenue increases today in order to sustainably put the national debt on a downward path; if we wait, this number will only rise.19

Currently, there are no clear bipartisan proposals to address either deficit spending or the national debt.

Without getting into the politics of deficit reduction, there are three main viewpoints with respect to curbing our debt problem:

entitlements: Proponents of this approach believe that Americans are already paying enough in taxes (currently close to an historical average of 18.1 percent of GDP) and want to address our debt problems through cuts to entitlement programs. According to Stuart M. Butler of the Heritage Foundation, inflation-adjusted federal spending per household has increased 36% over the past decade to more than $30,000 per year – two-thirds of which is on programs such as Medicaid, Medicare, and Social Security.20

Currently, these programs are unfunded, meaning that Congress does not vote on a budget for each program or specifically tie spending to tax revenues. Many proponents of this approach recommend putting all entitlement programs on a long-term budget that would require Congressional approval to be increased. In order to realistically reduce entitlement spending, American retirees would have to accept some belt tightening with respect to Social Security and Medicare benefits.

Keep spending and raise taxes: Advocates of this approach believe that continued government spending is required to maintain economic growth; under this theory, temporarily high spending deficits are required to sustain employment and growth until private sector demand increases. Once the economy is back on a healthy track, the deficit will decrease and increased taxes (typically on corporations and wealthy taxpayers) will help pay down public debt.

Cut Spending and Raise Taxes: This viewpoint is perhaps the most realistic, given the different political priorities at

march 27 "Mini-sequester" of around $7 billion begins.

march 27 Continuing resolution funding ends: If no additional funds are appropriated, nonessential federal functions will shut down.

april 15 Pay suspension deadline for Congress members if no budget resolution has been passed.

may 18New debt limit deadline: The Treasury will be able to continue borrowing for a short time using extraordinary measures; however, the debt ceiling will need to be adjusted to avoid a national default on debt.

Source: CBO Budget and Economic Outlook: Fiscal Years 2013 to 2023

play in America, and proposes both spending reductions and tax increases. The bipartisan Bowles-Simpson Plan, which falls into this category, suggested cutting federal spending by $2 for every $1 in tax increases. Since Congress already approved spending cuts of over $1.5 trillion over the next decade as part of the budgetary deal in 2011, the government only needs about $500 billion in spending cuts and $1 trillion in tax increases over the same period to be consistent with the Bowles-Simpson Plan.21

If we assume that entitlement reform is coming, spending cuts will likely include major reforms to Social Security and Medicare. This could include raising the retirement age, linking benefits to income, or raising the payroll tax. It would also likely include slowing the growth of healthcare costs, which are a major expense.

What are We doing to prepare our clients?

2013 may be remembered as the year America finally confronted its out-of-control spending, or it may be remembered as a year of volatility and frustrated hopes. We know that market ups and downs create anxiety and great challenges for investors. The question many Americans will be asking this year is: What can investors do to protect themselves and grow their wealth in this environment? While there are no clear solutions to America’s debt issues, there are ways that Americans can prepare for an uncertain future.

When markets are volatile, we advocate a disciplined focus on the proper asset allocation and the flexibility to adapt to changing circumstances. While short-term market volatility can provoke anxiety, we remain focused on your long-term financial strategy and look for unique opportunities in these market movements.

We also focus on building tax-efficient portfolios designed to reduce our clients’ tax burdens when necessary. 2013 brought changes to the tax code that will affect many Americans. While taxes are only part of an overall financial plan, we know that what you keep is just as important as what you earn.

While it’s impossible to know the shape of things to come, if Congress is able to put aside partisan differences and make the hard choices that need to be made, markets could respond very positively. However markets react,

Footnotes, disclosures, and sources:

Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Opinions expressed are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

Consult your financial professional before making any investment decision.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative or named Broker dealer, and should not be construed as investment advice.

1 http://www.wcfia.harvard.edu/node/7955

2 https://www.cbo.gov/sites/default/files/cbofiles/attachments/43907-BudgetOutlook.pdf

3 http://www.nytimes.com/2011/07/28/us/politics/28default.html?pagewanted=all

4 http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

5 http://www.tradingeconomics.com/united-states/gdp

6 http://www.nytimes.com/2011/07/28/us/politics/28default.html?pagewanted=all

7 http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563

8 http://www.reuters.com/article/2011/08/06/us-usa-debt-downgrade-idUSTRE7746VF20110806

9 http://www.economy.com/mark-zandi/documents/end-of-great-recession.pdf

10 http://www.businessweek.com/articles/2012-09-14/tallying-the-full-cost-of-the-financial-crisis

11 http://topics.nytimes.com/topics/reference/timestopics/subjects/n/national_debt_us/index.html


13 http://www.cfr.org/united-states/long-road-us-fiscal-reform/p29976


15 http://nationalpriorities.org/budget-basics/federal-budget-101/revenues/


17 http://online.wsj.com/article/SB10001424127887324900204578286050023564998.html

18 http://ap-gfkpoll.com/uncategorized/our-latest-poll-findings-20


20 http://www.csmonitor.com/Commentary/One-Minute-Debate/2012/1024/3-views-on-best-way-

to-curb-US-debt/Cut-spending-Americans-are-not-undertaxed.-The-problem-is-out-of-control-

spending-on-entitlements

21 http://www.csmonitor.com/Commentary/One-Minute-Debate/2012/1024/3-views-on-best-way-to-

curb-US-debt/Cut-spending-raise-taxes-Follow-the-bipartisan-Bowles-Simpson-formula-and-do-both

we are committed to building strong, flexible financial strategies that can stand the test of time. We hope you’ve found this report informative; should you have any questions about how the national debt affects your long-term financial future, please give us a call, we’re delighted to be of service.



Heart disease causes a quarter of the annual deaths

in the U.S., but often a simple change in diet can work

wonders. By eating heart-healthy foods, you may be

able to reduce your risk of heart disease and even

extend your life. The key lies in knowing what to eat.

1. Oatmeal Forget the boring slop from your

childhood. You can turn ordinary oatmeal into something

special by adding dried fruit, sesame seeds, and flaxseed.

Flax is another heart healthy food and will boost the

amount of omega-3 fats in your breakfast. Of course,

boiling oatmeal isn’t your only option. You can also

bake it for a tasty breakfast or make oatmeal bread to

include this healthy grain in your lunch.

2. nuts Almonds and walnuts lead the pack for being

great for your heart. They are packed with magnesium,

healthy fatty acids, and Vitamin E, among other nutrients.

All of these are useful in promoting heart health. Try a

handful of nuts as a snack, or chop them up and sprinkle

over a salad, chicken, or another dish you enjoy.

3. salmon Omega-3 fatty acids are very important

in keeping your heart running smoothly and salmon

is an excellent source of this. For those who are not

interested in eating salmon, fish oil supplements may

be a good alternative.

4. tofu This soy-based food may be most common

in a vegan or vegetarian diet, but everyone can benefit

from the magnesium, potassium, and niacin that are found

in tofu. Add crumbled tofu to scrambled egg whites or

mix into other foods if you prefer not to eat it plain.

5. Brown rice With Vitamin B, fiber, and magnesium,

brown rice is very good for your entire body, but it

is particularly helpful in keeping cholesterol levels

reasonable and the heart working well.

6. carrots Added to a salad, eaten plain, or blended

into tomato sauce, carrots pack a wallop of fiber and

alpha-carotene, both of which are great for your heart.

7. spinach This leafy green is mild-tasting, so it is easy to add to salads, smoothies, and other dishes. It is full of B-complex vitamins, potassium, fiber, calcium, and lutein, making it a very healthy addition to any diet. Many of these nutrients are also contained in other leafy greens, so pick up a variety to add to your daily meals.

Even a few subtle changes to your diet can mean a healthier heart. When one of the most important parts of your body is functioning well, the rest of your body will often follow. All of the foods listed here have excellent benefits for all your internal organs, so it’s well worth adding them to your diet.

Foods That Keep Your

Heart Healthy

Alaska is a fantastic choice for any cruise enthusiast

seeking a destination vacation full of adventure.

Alaska is home to so many unique natural wonders

and wildlife habitats that it consistently ranks among

the top 10 cruise destinations in the world. From the

Northern Lights, to the majestic glacier and fjords,

Alaska has many natural attractions that can be seen

in one fun-filled cruise.

As a cruise destination with many port cities, travelers

have an opportunity to see the state’s best attractions.

Alaskan cruises typically start on the west coast of the

U.S. at the port of Seattle or in Vancouver, Canada.

The first part of the journey takes travelers past Alaska’s

famed Inside Passage. This rugged frontier spans 500

vertical miles of Alaska’s coast and passes by more

than 1,000 islands.

The next stop on the journey is typically Glacier Bay

National Park. This remarkable roadless park is located

in the largest protected natural area and World Heritage

Site designated by UNESCO. This unforgettable cruise

destination is vanishing at an alarming rate. Every day,

glaciers melt and crash into the sea as the impact of

climate change is becoming more and more evident.

Now is the ideal time to witness the natural beauty

of this cruise destination before it vanishes forever.

The final destination for most Alaskan cruises is the

coastal city of Seward, which is named after the man

who brokered the Alaska Purchase, which is also

called Seward’s Folly. A drive inland brings visitors into

the rugged wilderness of Denali National Park that

surrounds Mount McKinley, the tallest mountain in

North America. Alaska’s diverse attractions and status

as one of the last great frontiers make the state one of

the best cruise locations and regions for experiencing

a destination vacation.

En j oy a n

AlAskAn CruisE


Many professionals agree that a financially comfortable

retirement will require retirees to have an income

somewhere between 70 and 80 percent of their

pre-retirement income. For most individuals this will

require multiple sources of income during retirement

years such as: savings, investments, pensions, and Social

Security. Although the average retiree’s Social Security

will only replace about 40 percent of their pre-retirement

income, the person’s age when they retire can make a

huge difference in the size of their monthly benefit check.

For instance, a retiree’s monthly Social Security check

could be up to a third less than their full benefit if they

retire at the age of 62. Consequently, it is important

for people considering retirement to understand the

advantages and disadvantages of retiring at various

ages before they visit their local Social Security office.

Retirees often ask us, "What is the best age to start applying for Social Security?” Unfortunately there is not a universal answer, and the answer is unique to each potential retiree based upon their specific situation. Conditions such as an individual’s date of birth, health, family history, finances, and even marital status play a big part in determining the best time to apply for

social security.

So what are the retirement ages? Basically, the Social

Security Administration has created three retirement

age categories: minimum retirement age, full retire-

ment age, and maximum retirement benefit age.

What is BESt

Age toretire?

tHe

1. According to the Social Security Administration,

minimum retirement age is age 62. Nearly 60 percent

of the Social Security recipients apply for their Social

Security benefits at age 62. Unfortunately this early

retirement is offset by a reduced benefit check for

the rest of their lives. The actual amount the benefits

are reduced depends upon several factors, but a good

rule of thumb is that the benefits will be reduced by

about one third.

2. Full retirement age is based upon an individual’s

date of birth. At one time, full retirement age was

65 for every retiree, but over the years Congress

has changed the laws, and full retirement age now

varies between age 65 and 67 depending on the year

the person was born. A retiree who waits until full

retirement age to begin drawing their Social Security

benefits will receive a monthly check that will be

about 25 percent higher than if they had retired at

age 62.

3. Maximum retirement benefit age is age 70. If

a person does not apply for their Social Security

benefits at their full retirement age, but instead

delays their retirement, they can increase their

potential Social Security benefits by 8 percent for

every year they delay retirement until age 70. That is

about 30 percent higher than if they retired at their

full retirement age, and it can be about 55 percent

higher than if they retired at age 62.

In theory, Social Security benefits are age neutral.

According to the Social Security Administration, the

average retiree who starts receiving reduced benefits

at age 62 will receive approximately the same amount

of money over their lifetime as if they had waited until

full retirement age to receive full benefits, or even

increased benefits at the maximum retirement age. In

other words, a person who retires at age 62 will receive

a smaller monthly check, but they will receive that

smaller check for several years more than if they had

delayed retirement until full or maximum retirement

age. The Social Security Administration bases their

calculations upon the average lifespan of people in

the United States.

Age 78 to 82 is often identified as the breakeven

point where the Social Security benefits will balance

out. This is very useful information when deciding on

the best age to retire. For instance, if a person is a

female, and the women in her family typically live well

into their upper 80s or 90s, then waiting until full or

maximum retirement age could mean receiving many

tens of thousands of dollars more during her lifetime.

On the other hand, if a person is a male, and the men

in his family rarely live past age 70, then applying for

Social Security benefits at age 62 may make more sense.

Although life expectancy is only one of many things

a person needs to research and understand when

deciding on the best age to retire, it is a good start.

The important point to remember is that each person

is unique. So whether a person decides to retire at age

62, 70, or some age in between, the decision should

only be made after careful research and planning

with the help of a financial advisor. A hasty decision

could mean losing out on money that could make the

difference between a comfortable retirement and one

that is less than desirable. Please let us know if you or

someone you know would like assistance determining

the right age to retire.

"A hasty decision could mean losing out on money that could make the difference between a comfortable retirement and one that is less than desirable."



The days when most of us had one password for everything are long gone. There are thousands of hackers and scammers out there, and using the same password is like giving them your front door key. Depending on the level of security you need, there are various strategies for creating memorable passwords and managing them effectively. Here are a few tips.

Don’t let your browser remember passwords for you. This is a security risk. Instead, create memorable passwords that are sufficiently strong. Example: Work from a template made of several easy-to-recall components. For example, numbers + letters + numbers could be the first four digits of your phone number + an acronym for the site the password is used to access + date, month or year of birth. The result could be a password like 5552hm70 for your Hotmail account. For additional security you could add one capital letter or punctuation point. In this example the password could become: 5552hmE!70.

This template mnemonic can be varied almost infinitely according to your preferences. Make it more complicated if you like (generally speaking, the more letters and letter-number-case combinations, the harder it is to crack). If you have two passwords for one site, try making the second one backwards.

Better Passwords =Better security

other tiPs//1 _ don't leave passwords blank.

2 _ don't use your username as a password.

3 _ Don't use identifiable information by itself (such as a birthday).

4 _ don't write passwords down or store them on your computer.

5 _ Don't use auto-fill for passwords (especially on public computers).

6 _ Use 8 characters or more.

7 _ Use a combination of uppercase, lowercase, numbers, & symbols.

8 _ Memorize your passwords.

9 _ Change your passwords periodically (at least every 60 days).

10 _ Keep your passwords a secret.

sudoku

how to play sudokuSudoku or "single number" is a logic-based, number-placement puzzle. The objective is to fill a 9×9 grid with digits so that each column, each row, and each of the nine 3×3 sub-grids that compose the grid (boxes) contains all of the digits from 1 to 9 once.

6 3 5 98 29 3 4 67 5 3 9 6

9 8 7 12 5 6 9 4

6 1 7 32 64 9 6 2

9 1 6 23 4 2

8 44 1 9

5 2 17 3 9

7 15 8 2

2 3 9 5

G A I S E RFINANCIAL GROUP

G

Investment Advisory Services are offered through Capital Investment Advisors, Inc. (CIA), a North

Carolina Registered Investment Advisory Firm (RIA). Stoneridge Insurance Services, LLC dba

Gaiser Financial Group & Capital Investment Advisors (CIA) are separate entities.

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3300 Battleground Avenue, Suite 270,Greensboro, NC 27410

2013 spring newsletter

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debt levels

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