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Life Expectancy in the United States? Depends.
Last week, the Journal of the American Medical Association published a study* that examined differences in life expectancy rates among US counties. Researchers found a large and growing gap among the highest life expectancy rates (found in central Colorado) and the lowest (found in North and South Dakota). Factors like poverty, education, employment and access to quality health care play a large role in explaining the differences.
While this study certainly has implications for public health experts and policy makers, it made us think about some recent conversations we've been having with clients about life expectancy in general.
Count on longevity
Although
where you live can influence
how long you live, on average, life expectancy rates in the United States have been on the rise. Consider the exhibit below. According to the latest Period Life Tables published by the Social Security Administration, if you are 65 today, there is a 74% chance of you, or your spouse, living at least 20 more years.
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Source: Social Security Administration; JPM, NMWM
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It's important to plan on the
probability of living much
longer (maybe as much as 30 years or more in retirement),
and
invest a portion of your
portfolio for growth in order to
maintain your purchasing
power. Older Americans tend to experience a higher degree of inflation than the headline numbers reported by economists. This is due to spending priorities of the elderly --- primarily in the area of healthcare --- and price increases in those categories. Seniors should fight against the urge to "park" their money in "safe" assets, and instead, embrace a diversified mix of assets that ensures you won't outlive your money.
*Dwyer-Lindgren L, Bertozzi-Villa A, Stubbs RW, Morozoff C, Mackenbach JP, van Lenthe FJ, Mokdad AH, Murray CJL. "Inequalities in Life Expectancy Among US Counties, 1980 to 2014, Temporal Trends and Key Drivers". JAMA Intern Med. Published online May 08, 2017. doi:10.1001/jamainternmed.2017.0918
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Last week's mostly favorable
--- or at least stable
--- stream of earnings reports and economic data helped to compensate for the political turmoil coming out of Washington. Headlines were dominated by the unexpected firing of FBI Director, James Comey, and later in the week, escalating tensions with North Korea. Most of the major equity indices ended the week lower, but the Nasdaq was able to record a gain and reach a new high.
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> Housing: Housing prices hit their peak just over 10 years ago (before the Great Recession), and then declined 20% on average (and much more in some places). In November of 2015, prices surpassed those levels reached a decade ago, and have continued to move higher.
Though housing prices remain at all-time highs,
the market is not experiencing the same excesses that contributed to the crash in 2008. Even though home prices have increased, affordability levels are still high relative to the long-term average, due to low mortgage rates.
> Retail Sales: Last Friday the latest retail sales data was released and while there was a recovery in April, it was less than expected, up just 0.4% for the month. Consumer confidence may be through the roof but retail sales, and consumer spending in general, have been stuck on the ground. And, consumer spending in the second quarter is only off to a moderate start.
> Puerto Rico Debt:
Following several defaults over the past two years, Puerto Rico has filed for debt restructuring under Title III of the PROMESA act, a process similar to bankruptcy. Puerto Rico's issues have been years in the making, so the filing did not come as a surprise. But with over $70 billion in debt, it could lead to the largest municipal restructuring the US has ever faced (Detroit was the previous largest at $18 billion).
The good news for investors is that the reaction in the broader municipal market has so far been muted. Mutual fund flows can be used to gauge the fear of broader contagion. While Puerto Rico distress corresponded with mutual fund outflows in 2013 and 2016, flows
in the general municipal bond market have remained mostly positive recently.
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In what may be the coolest way to buy a collectible car, Autobahn Motors has opened a new showroom in Singapore.
From the street, the building resembles a giant Matchbox toy car set. It features 15 levels and four columns of exotic and luxury cars on display. A high-tech automated system manages the inventory that holds 60 vehicles and retrieves them like a huge vending machine.
Similar to most big cities, Singapore has a limited amount of real estate available for used car dealerships. The vending machine format, in addition to looking cool, is the most efficient use of limited space.
If you can't make it to Singapore,
Carvana
has opened a smaller version of its own car vending machine in San Antonio. You might not find a vintage Ferrari, but you do get to insert a cool oversize coin to release your car!
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New Market Wealth Management offers modern investment solutions backed by extensive research and experience serving the needs of wealthy families. Through our strategic partnership with
Cliffwater LLC
, we provide institutional-quality research, investment due diligence and asset allocation tools. We believe this level of experience and unique access to in-depth, sophisticated research are essential for success in today's complex world markets.
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