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July 20, 2017
Jersey Benefits Advisors Investor Newsletter Summer 2017

Market Watch

As I mentioned in my last missive, our current bull market had it’s 8th birthday on March 9th,  so, as June fades into the rear view mirror of history, there are two other noteworthy events worth mentioning at this juncture.  In June, we celebrated the 8th birthday of our current economic expansion, as well as the 10th anniversary of the beginning of the Financial Crisis, when in 2007, two hedge funds managed by Bear Stearns collapsed.  Birthdays and anniversaries are significant in many ways.  Just miss one for a close family member, or significant other and you’ll get it!  Moreover, to ignore the past is perilous to the present & future.

Recent reports by the Bureau of Economic Analysis and the Bureau of Labor & Statistics published in late June gave us a snapshot of the economy and economic expansion at this point.  Gross Domestic Product (GDP) was revised upward to an annual increase of 1.4% for the first quarter of 2017 and an annual increase of 2.1% for the fourth quarter of 2016.  The upward revisions were due to increases in personal consumption expenditures (PCE) and exports.  Growth in GDP is imperative if our current expansion is to reach its ninth birthday.  The national unemployment rate in May was 4.1% and the annual inflation rate was 1.9%, which are significant because they are within the Federal Reserve’s target.  If you remember in mid June, the Fed raised the Federal Funds Rate to 1% - 1.25%, as it continued its efforts to normalize interest rates.

At the mid point of the year, the Dow Jones Industrial Average (DJIA*) closed at 21,349.63 up 1,587.03 points YTD for a return of 8.03%, and the S&P500* finished at 2,423.41 with an increase of 184.38 points and a 8.24% YTD return.  The NASDAQ* notched a 14.07% YTD gain, and finished the first half of the year at 6,140.42 gaining 757.30 points.  The three indices are all lower than their all time high, but remain within striking distance.  Earnings reports and future guidance will be released by many public companies starting in mid July, which will be  another snapshot of the health of the economy.

I’ve read many articles and reports recently, some of which share my cautious optimism that although the economic expansion and bull market may be in the fourth quarter or autumn of their cycles, there still may be some room for growth.  As I mentioned numerous times throughout this recovery and expansion, the cycle could be more prolonged due to the severity of the Financial Crisis from which we’ve emerged.  The benefits of utilizing portfolio diversification, dollar cost averaging and other techniques we’ve discussed over the years, as well as remaining committed to  staying with your investments, and not panicking during a downturn are paramount to all of our collective financial wellbeing.  Remember, you don’t actually lose money when the market goes down unless you sell your investments when it is down.  Again, I am not predicting a correction or bear market, just passing on some of my investment experience.

The following chart depicts the effects of inflation over 60 years on sectors of the economy and the stock market.

Cost of Living in 1957

Gallon of milk                 $1.00

Loaf of bread                 $0.19

Dozen Eggs                   $0.82

Postage Stamp              $0.03

Minimum Wage             $1.00

Gallon of  Gas               $0.24

DJIA*                                435

New Car                  $2,100.00

New Home            $20,000.00

Average Income     $4,454.00



I hope you had a fantastic 4th of July!

Retirement Isn’t Free, But You’re 401k Match Is

Are you making the most of your company's 401k match? Even though half of the year has gone by, you can take steps to make the most of your company's 401k match. Each year, Americans leave billions of dollars in 401k company matches on the table. Here's how to avoid becoming one of the estimated one in four employees who misses out on free money.

Understand the Value of an Employer Match

A 401k or similar employer sponsored retirement plan can be a powerful resource for building a secure retirement, and an employer match can add a substantial amount to an employee's nest egg. Let's assume you are 30 years old, make $40,000 and contribute 3% of your salary ($1,200) to your 401k. For the sake of this example, let's also assume you continue to make the same salary and same contribution each year until you are 65. After 35 years, you will have contributed $42,000 to your 401k.

Now let's assume you get a match from your employer. One of the most common matches is a dollar for dollar match up to 3% of the employee's salary. Taking full advantage of the match literally doubles your savings, even assuming no increase in the value of your investments: Instead of having set aside $42,000 by the time you retire, you will have set aside $84,000. That's $42,000 in free money.

Recognize the Tax Advantages

In addition to offering the potential for free money through a match, employer-sponsored retirement plans can give you significant tax advantages. With a traditional 401k, for instance, your contributions are made with pre-tax dollars, meaning the money goes into your retirement account before it gets taxed. In addition, your contributions, any match your employer provides, and any earnings in the account (including interest, dividends and capital gains) are all tax-deferred. That means you don't owe any income tax until you withdraw from your account, typically after you retire. With pre-tax contributions, every dollar you save will reduce your current taxable income by an equal amount, which means you will owe less in income taxes for the year. But your take-home pay will go down by less than a dollar. Here's how that works. Building on the example above, the $1,200 you contribute to a traditional 401k lowers your federal income tax bill for the year because you owe taxes on only $38,800 rather than $40,000. If you're single, your total federal tax bill using the 2017 IRS tax rate schedule is $3,848 instead of $4,028, a tax savings of $180.

Matches and Roth IRA’s

A growing number of employers offer a Roth 401k option, where employees make contributions with after-tax money, and neither the contributions nor any earnings they generate are taxed when the money is withdrawn. While employers can match Roth-directed contributions, IRS rules require that all matched funds reside in a pre-tax account, just like employer-contributed matching funds in a traditional 401k account. As a consequence of this rule, the matching funds your employer contributes to your Roth 401k (and any earnings on those funds) will be taxed as ordinary income when you withdraw them. If you contribute to both a Roth and a traditional 401k, the match is applied first to the traditional 401(k) amount and then, if necessary, to any Roth-directed funds.

Play Catch Up

Not all employers provide matches so if you are uncertain, ask your company's human resources or benefits department. Find out what the maximum percent of salary your company will match, and increase your contribution amount if you find that you are not contributing enough to achieve the full match. Also, be aware that even contributing at the match threshold may not be enough to fund a secure retirement. Most investment professionals recommend a savings level of 10 percent or more to generate enough replacement income during retirement to maintain your standard of living, and to start saving at this level as soon as you begin working.  For more information, feel free to contact me .

Our Privacy Policy at Jersey Benefits

At Jersey Benefits Group, Inc. and Jersey Benefits Advisors, we collect and use information from you on applications and other forms as well as information about financial transactions with us and from non-affiliated third parties.  This “nonpublic personal information” is obtained in connection with providing a financial product or service to you.

We do not disclose any nonpublic personal information about you without your express consent, except as permitted by law and only to provide services to you.  We may disclose the nonpublic personal information we collect to persons or companies that perform services on our behalf for your benefit. 

We restrict access to your nonpublic personal information and only allow disclosures to persons and companies as permitted by law to assist in providing products or services to you.  We also maintain physical, electronic and procedural safeguards to protect your nonpublic personal information at all times. If you have any questions or concerns, please feel free to contact me to discuss the them.

Company Information:

John H. Kaighn is an Investment Advisor Representative with and offering Investment Advisory Services through Jersey Benefits Advisors.

P.O. Box 1406

Ocean City, N.J.  08226

Phone:  609 827 0194

Fax:  856 637-2479



John H. Kaighn is a Registered Representative with and offering Securities through Signator Investors, Inc.  Member FINRA SIPC

197 Clarendon Street

Boston, MA 02116



Signator Investors, Inc. is not affiliated with Jersey Benefits Group, Inc. or Jersey Benefits Advisors 

Third Party Administration and Insurance Services offered through: Jersey Benefits Group, Inc.

P.O. Box 1406

Ocean City, N.J.  08226

Phone:  609 827 0194

Fax:  856 637-2479



All opinions expressed in this newsletter are  independent of Signator Investors, Inc. and solely those of John Kaighn & Jersey Benefits Advisors.

* The S&P 500, the DJIA, the NASDAQ and others referenced are unmanaged indices that are widely used as indicators of Market Trends.  Past performance does not guarantee future results.  The performance of these indices does not reflect fees and charges associated with investing.  It is not possible to invest directly in an index.

*Dollar Cost Averaging through a systematic savings plan is an excellent way to build an account without a sizeable initial investment.  Saving a portion of our pay each month is very important.  Company sponsored pension plans are one method to save and should be used for retirement.  Other systematic investment accounts, SUCH AS ROTH IRA’S, TRADITIONAL IRA’S, COVERDELL ACCOUNTS, 529 PLANS, BROKERAGE ACCOUNTS AND ANNUITIES  can also be opened, and debited directly from your checking or savings account. For more information, just call to set up an appointment. REFERRALS ARE ALWAYS WELCOME. 

John H. Kaighn 




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*Jersey Benefits Advisors is a trade name for J/M Kaighn, Inc. a corporation registered in the State of New Jersey, and Jersey Benefits Group, Inc. is a corporation registered in the State of DE.

*John H. Kaighn is a Registered Representative and an Investment Advisor Representative of Signator Investors, Inc. Securities and Investment Advisory Services are offered through Signator Investors, Inc., member FINRA, SIPC and a SEC Registered Investment Advisor. Jersey Benefits Group, Inc. and Jersey Benefits Advisors are independent of Signator Investors, Inc. Insurance services provided by Jersey Benefits Group, Inc., a Licensed Insurance Producer in the State of New Jersey.

*John Kaighn is licensed to offer securities through Signator Investors, Inc. in the states of CO, DE, FL, IL, MD, NC, NJ, NY, and PA., as well as investment advisory services in NJ. This Website should not be considered a solicitation for securities business or investment advisory services in any other state.

*This web page offers links to other companies. Once a hyperlink is activated, you will be leaving Jersey Benefits Group, Inc., and operate outside Jersey Benefits Group, Inc. Website. Jersey Benefits Group, Inc. is not responsible for the validity, completeness or accuracy of any information provided on those sites to which you may link. Furthermore, Jersey Benefits Group, Inc., Jersey Benefts Advisors and Signator Investors, Inc. shall not be liable for any direct or indirect system damage or other problems you may incur as a result of linking to any other website, including any consequences arising from your accessing third party technologies, sites, information and programs made available through Jersey Benefits Group, Inc.

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