January 2017
Capital Advantage Employee Spotlight: Amy Langell
Understanding and Managing Your Credit Score
Social Security: Income Replacement Trends Declining for Working Couples

Capital Advantage Employee Spotlight: Amy Langell

Capital Advantage was extremely fortunate to welcome Operations Assistant, Amy Langell, to our team in March 2016. Known for her organized approach and friendly demeanor, Amy has become a key player on the Operations team, and her main responsibilities include: internal account management, managing the billing for both custodians (Schwab and Fidelity), running investment reports, and conducting internal compliance and operations audits. Amy also handles the daily download from custodians for our portfolio management database and submits trades prepared by the Director of Investment Management, as well as providing support to our Chief Compliance Officer.

Meet Amy!

Q: Where did you grow up?
I grew up in Santa Rosa and I’ve lived in California my whole life. I love it here.

Q: Before working at Capital Advantage, what was the most interesting/unusual job you’ve ever held?
Before starting my career in finance (in 1999), I worked as a dispatcher at a well-known plumbing company, which was both fun and hectic. 

Q: What are three words you would use to describe the culture at Capital Advantage?
Efficient, Motivated, Fun

Q: Do you have an office nickname?
Amy G.

Q: Any favorite line from a movie?
How about a favorite song lyric? “Stuck in a storm? Do a rain dance!” from “Sunrise” by Ryan Bingham.

Q: What is your favorite vacation destination?
Jazz and Heritage Festival in New Orleans is always a favorite. Although Hawaii is nice, too…

Q: What do you like to do when you’re not working?
Besides spending time with my family? I enjoy reading and going to the movies. I also love most outdoor activities and spending time with friends.

Q: What are three places you hope to visit in the near future?
Memphis (my favorite band, Lucero is from Memphis). Majorca, Spain. And Costa Rica.

Q: What is your definition of success?
Success, to me, means feeling good in your skin and knowing that you did the best you could do with the day that you were given.

Q: Favorite board game?

Q: If you could live in another time period, what would it be?
I’d say the ‘70s because of the music and the culture. It may not be true, but it seems like life was simpler back then.

Q: What’s the most important thing you have learned in the past five years?

Q: What is your favorite part about working at Capital Advantage?
The people, the level of professionalism and the positive, fun energy.

Understanding and Managing Your Credit Score

Your credit score is a number that lenders use to gauge how likely you will be to repay your debts on time. As an informed consumer, you can make yourself more attractive to lenders by taking steps to boost your credit score.

Your FICO®Score: The Standard Measure

The FICO® Score (an acronym for its creators, the Fair Isaac Corporation) is a standard gauge lenders use to measure a consumer’s credit risk. According to myFICO.com, 90% of top lenders use FICO scores when making lending decisions. A typical credit score will range between 300 and 850 points. Although all lenders make decisions based on the particulars of the lending situation, generally speaking, the higher your credit score, the lower the perceived risk to the lender, the more attractive the interest rate you may be offered, and the more money you may save over time.

For instance, at current rates, a borrower with a credit score of between 760 and 850 can expect to pay a rate of 3.174% on a 30-year, $200,000 fixed-rate mortgage, according to myFICO.com’s Loan Savings Calculator. By contrast, an individual with a score of between 620 and 639 can expect a rate of 4.763%, which amounts to an extra $183 in monthly payments and an additional $65,797 in total interest paid over the life of the mortgage.1

Key Factors

The three major credit reporting agencies—Equifax, Experian, and TransUnion—compile credit scores based on information provided by creditors. These agencies generate scores using a proprietary formula that assigns weightings to five main factors:

  • Payment history (whether you have missed or been late with any credit payments). On-time payments are an important component of your credit score. Using your credit responsibly and paying bills on time are great ways to maintain a good credit score.
  • Credit utilization. Credit utilization is defined as the total debt you have divided by the total available credit that is available to you. High credit utilization can be a warning sign of credit risk.
  • Length of credit history (how long various accounts have been open). Credit history is a significant component of your credit score. Accordingly, the average age of your credit cards can be a strong indication of your credit history. Care should be used in keeping old accounts open and in good standing.
  • The amount of new credit on your record. While opening one new credit card might be normal, opening several in a short span of time could be a warning sign to potential creditors that something is amiss in your financial life.
  • Mix of credit accounts. Both the total number of credit accounts you have and the mix of credit you have will affect your credit score. A healthy mix of revolving credit cards, charge cards, installment loans and mortgages will also impact your credit score.

What’s in a Score?

The percentages in the chart below reflect how important each of the five main categories is in determining how your FICO score is calculated.

Your FICO Score







Source: 1myFICO.com. Interest rates as of October 17, 2016. The rates shown are averages based on thousands of financial lenders, conducted daily by Informa Research Services, Inc.

Social Security: Income Replacement Trends Declining for Working Couples

In a way it seems counter-intuitive. Yet a recent report published by the Center for Retirement Research at Boston College found that as more women have left their posts as full-time homemakers and joined the workforce, the income replacement rate that Social Security provides to two-earner married couples has been in steady decline.

Demographic Shifts

The study found that as more women went to work, the “family benefits” component of Social Security—i.e., spousal and survivor benefits—began to decline sharply as a source of household retirement income. For instance, more than half of all women born in the early years of the Depression who became eligible for Social Security benefits in the 1990s were entitled to a spousal and/or survivor benefit in their initial claim. By contrast, fewer than a third of the oldest baby boomer women were entitled to family benefits when they first became eligible for Social Security benefits between 2010 and 2015. 1

This decline in family benefits has been the main catalyst behind the erosion in household Social Security replacement rates, which have dropped from about 50% for older couples born in the early 1930s, to 45% for the oldest baby boomer couples. Another steep decline in replacement rates (to just 39% of pre-retirement income) is forecast for Generation Xers when they begin to retire after 2028. 1

The study summed up the factors driving the trend quite simply:

“The labor force activity of women has a significant effect on the couple’ replacement rate, which is the household’ total Social Security benefit as a percentage of pre-retirement earnings. As women work, they increase the couple’ pre-retirement earnings more than their Social Security benefits, so the household’ replacement rate declines.” 1

Estimate Your Benefits Annually

The declining income replacement rate is a critical issue to keep in mind as couples plan for their retirement years. Make a point of checking out your estimated benefits at least annually so you know how much to expect — and how much you’ll need to provide from your own savings. You can estimate your retirement benefits online at SSA.gov, using one of the following methods:

  • The Retirement Estimator gives estimates of your retirement monthly benefit, based on your actual Social Security earnings record. The calculator shows early (age 62), full (ages 65-67 depending upon your year of birth), and delayed (age 70). The Retirement Estimator also lets you create additional custom estimates by inputting different stop-work ages and future earnings.
  • If you do not have an earnings record with Social Security or cannot access it, there are also other benefit calculators that do not tie into your earnings record. The calculators will show your retirement benefits as well as disability and survivor benefit amounts if you should become disabled or die.Social Security should be a part of your retirement income planning. Also, remember that Social Security benefits don’t automatically increase every year. They typically are raised to reflect an increase in the cost of living.

    Source: 1 Center for Retirement Research at Boston College, “How Work and Marriage Trends Affect Social Security’ Family Benefits,” June 2016.