Calton & Associates Inc.

Scott Coffee

Registered Representative

10205 Westheimer, Suite 500

Houston Tx, 77042


The Downside of Fixed Income in Your 401(k)
Market Update
(all values as of 03.29.2024)

Stock Indices:

Dow Jones 39,807
S&P 500 5,254
Nasdaq 16,379

Bond Sector Yields:

2 Yr Treasury 4.59%
10 Yr Treasury 4.20%
10 Yr Municipal 2.52%
High Yield 7.44%

Commodity Prices:

Gold 2,254
Silver 25.10
Oil (WTI) 83.12


Dollar / Euro 1.08
Dollar / Pound 1.26
Yen / Dollar 151.35
Canadian /Dollar 0.73


These terms apply to the holder of an individual bond, NOT  the holder of a bond Mutual Fund. Most 401(k) accounts only allow you to buy bond Mutual Funds, not individual Bonds. 

Bonds vs. Bond Funds

Bonds are inversely related to interest rates. When interest rates go up the value of existing bonds go down. The reason for this is that the bonds issued at the new higher interest rates are more valuable due to their higher coupon. This inverse relationship between bond prices and interest rates will cause bond mutual funds to go down in value what rates are going up, as they currently are.

In a bond Mutual Fund, the price of your shares will fluctuate with interest rates, and income you get is the average coupon of the bonds in the fund minus all of the funds expenses. There is no fixed maturity, and when interest rates move up, as they have been doing this year, there is a high probability that the value of your shares will go down in value.  If you are holding an individual bond, you know up front what you will receive at maturity.  Individual bonds provide permanence and certainty, a bond mutual fund provides neither.


Bond Basics


Bond  Rates

The interest or coupon rate of a bond is usually determined by:

The advantage: If you buy a bond on the day it is issued, you can expect a fixed income over a certain time period as well as the return of your principal at the end of the term.

The disadvantage: The corporation or government issuing the bond may not be able to paings involve higher risk and usually offer higher interest

You've been told that you can move your 401(k), what now?



Moving Your Retirement Assets


In-Service Withdrawals

Retirement Planning Today




Americans Retire Earlier Than Expected








A Traditional View of Retirement

Your parents likely:

A New View of Retirement


New Retirement Opportunities

New Retirement Opportunities

Many of today’s retirees:

The New Retirement Planning Process

1.Determine the outcome you want to achieve

2.Educate yourself to make informed decisions

3.Analyze your current financial situation

4.Develop a financial plan to address scenarios like job loss, health
problems/ disability, changes to Social Security, death in the family

5.Implement the plan, selecting the financial products necessary for a coordinated portfolio

6.Review your plan and adjust over time


Retirement Planning Roadblocks: Common Areas for Improvement

1.Don’t define how they wish to live their retirement years

2.Don’t set financial goals to achieve their lifestyle goals

3.Don’t make a commitment to be financially successful

4.Don’t invest early in life or on a regular basis

5.Don’t use tax laws to their advantage

  1. Don’t allocate assets properly and adjust as needed
  2. Don’t plan for the unexpected
  3. Don’t take full advantage of employer benefit plans and don’t choose
    the best way to take money out of their retirement plan
  4. Don’t properly plan for their estate
  5. Don’t create a comprehensive financial plan
By the Numbers

What Most Tax Payers Earn -Tax Fact

With tax cuts and IRS simplification proposals on the agenda, tax revenue statistics are focal points as certain taxpayers in various age and income groups may or may not see beneficial changes.

The Internal Revenue Service (IRS) keeps careful detail on tax revenue and how it is broken down. Tax revenue data is based on Adjusted Gross Income (AGI) which is compiled and revised during every tax season. 
Of the more than 134 million tax returns filed for tax year 2016, the bulk of returns fell between the $30,000 to $200,000 income ran

ge. The median income group of taxpayers earning $50,000 to $75,000 comprised the largest segment of tax payers nationwide with over 18 million filers. The second largest group includes those earning between $100,000 to $200,000, with nearly 16 million filers in 2016.

Demographical factors drive tax revenue, such as middle-aged, dual income house-holds tending to earn more for a longer period of time. The amount of income also determines the number of filers in each income group. For 2016, there were only 3,469 taxpayers reporting $10,000,000 or more in income and 1,086,092 filers re-porting no income.

Source: IRS


Social Security Taps Trust Fund – Financial Planning

The Social Security program’s cost will exceed its income this year for the first time since 1982, forcing the program to access a $3 trillion trust fund to cover future benefits. Social Security is funded by two trust funds, one for retiree benefits and another for disability benefits.

The latest annual report issued by the trustees of Social Security and Medicare revealed that by 2034, the program’s trust fund will be depleted. Depletion means that Social Security recipients will no longer be receiving full scheduled benefits. Recipients would receive about three-quarters of their scheduled benefits after 2034. Congress can eventually act to fortify the program’s finances, but it may be years before it actually takes effect and funds.

The report also mentioned that Medicare’s hospital insurance fund would be depleted in 2026, three years earlier than anticipated in last year’s report. The trustees noted that the aging population of the country has placed additional pressure on both the Social Security and Medicare programs. A decade ago, roughly 12% of Americans were age 65 or older, today 16% of Americans have already surpassed 65, the eligibility age for Medicare.

The Social Security Administration considers various factors in projecting its estimates, including fertility, immigration, wages, health, and economic growth. A recent drop in U.S. birthrates along with stagnant wages has placed additional burden on the viability of future benefit payments.




Chinese Products With The Largest Trade Deficits With U.S. – Trade Policy
Electronic devices and computers are the products with the largest trade deficits with the U.S. Over the past few years, American consumers have become accustomed to inexpensive Chinese made products available in every retail and online store across the country.

One of the biggest casualties of the imposed tariffs are auto manufacturers located in the United States. Ironically, there are currently 10 foreign auto manufacturers with plants in the U.S. compared to only two U.S. owned auto manufacturers. These manufacturers all rely on comp

onents primarily imported from Asia and China whose controlled costs are critical to the profitability of the companies.
A list of 1300 identified products imported from China are primarily used as components for larger more expensive products. The question is what percentage of these products are comprised of imported components subject to tariffs.

Foreign manufacturers have skirted tariffs and manufacturing rifts over the years by having certain products assembled in the United States, but comprised of imported components. Hence the controversial tag noting “assembled in the USA”, which many consumers and consumer groups have found to be misleading.

Sources: U.S. Department of Commerce

The Big Picture