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Fed Reaffirms its Dovish Stance: The Fed unveiled significant changes to its policy goals following its 18-month, comprehensive framework review. As anticipated, the Fed formally adopted flexible average inflation targeting. But, somewhat unexpectedly, it tweaked its employment mandate to be more asymmetric, so that low unemployment presents less need for tightened policy so long as inflation remains close to the 2% target.

This codifies the extremely dovish policy strategy the Fed is already following. However, it signals the Fed is willing to let the economy “run hot” to promote broad and inclusive employment gains even if inflation, temporarily and moderately, rises above 2%.

Fading Federal Pandemic Support is Hurting Households: President Trump’s executive orders are providing even less relief to households than initially expected in the absence of a more comprehensive fiscal aid package. The steep decline in federal support for unemployed workers and heightened uncertainty will depress consumer confidence and spending.

The failure of lawmakers to extend the federal top-up of $600 per week to unemployed workers is dealing a significant blow to household income. Only a fraction of the $600 in weekly federal supplemental unemployment benefits will be offset by the new $300 in weekly benefits that President Trump’s executive actions provide. We estimate outlays for unemployment insurance benefits will decline at least $45 billion in August.

Renters are increasingly at risk, with as many as 15 million Americans estimated to be vulnerable to eviction. The eviction protections that Trump’s executive actions provide are vague. Even if the moratorium that expired on July 24, is extended, renters need direct financial assistance. Homeowners are faring better than renters during the pandemic, but more homeowners may fall behind their mortgage payments if direct support to households is not forthcoming.

The Week on Wall Street: Last week, the Standard & Poor’s 500 rose 3.29% along with the MSCI ACWI Index, a broad measure of equity-market performance throughout the world, at 2.75%. The Barclays Global Bond Index also rose 0.06%.

Our Near-Weekly Look at the Concentration of Returns from the FAANMG’s:

Pandemic Accelerates Reliance on Large Companies: The below chart from Bianco Research shows that consumer spending has picked up and is trending toward pre-pandemic levels. However, revenue is not finding its way to small business. The acceleration of spending going to large, e-commerce savvy companies has strained small businesses even further. The pandemic has hit the fast-forward button on our dependence and preference for internet shopping.

Planning Corner: We stumbled across a MarketWatch article about a 57-year-old nurse with no retirement savings wondering if it is too late to make plans to retire within seven years. The article touched some common topics we discuss with clients every day.

Generally speaking, it’s never too late to start saving for retirement. What clients and prospective-clients often find surprising as we walk through their specific financial plan is the crucial role Social Security plays in funding life in retirement. It is common for us to build plans where Social Security provides 30%-50% of the cash flow retirees will live on in retirement—even with substantial nest eggs saved away. Planning around when to take your benefits and how they fit into your plan is an important conversation we’d be happy to have with you. If you haven’t already opened your portal on the Social Security website, keep reading and find the link below.

As the article states relative to the nurse in the story:

Working longer also means your Social Security benefits will continue to grow. The longer you wait to claim Social Security, the more money you will get. Comparatively, if you were to claim before your Full Retirement Age (FRA), you’d see a reduction in your benefit. If you are 57 now, your FRA is likely around 67 years old. You can check your FRA as well as your expected benefits at various ages and your employment history on the Social Security Administration’s site.

Speaking of Social Security: think carefully before you decide to claim it, especially if you choose to leave the workforce in your early 60s and intend to have that money offset your savings deficit. And of course, if you can afford to wait. Beneficiaries don’t always realize that when they begin to claim Social Security benefits at 62, which is the earliest a retiree can do so, or anytime before their FRA, they’re going to get a permanent reduction in their benefits. By creating an account with the Social Security Administration, and checking what your estimated benefit will be, you can also get a picture as to how much that money will really help you live comfortably in retirement.

More important than the intricacies of Social Security or savings and investing, this article highlights the hardest part: facing one’s fear of the unknown about retirement, especially if you’ve been ignoring it for years. It can be scary for people who have stuck their heads in the sand to begin anew with an honest assessment of where they are and where they are going.  Helping people on this journey is the heart of our motivation at Compass Ion Advisors, so contact us if you think this may be relevant to you. We’d be happy to help.