Given that our annual review of the AAII Stock Screens is featured on the cover, it would seem logical for me to say something about stock screening in my Editor’s Note. Instead, however, I’m going to start with Washington politics.

This is the third time in five years I’m discussing our legislators in a January issue of the AAII Journal. It shouldn’t be this way, but our elected officials’ procrastination and bickering have turned into a habit of passing end-of-year legislation that impacts the taxes we pay. In December 2010, the U.S. House of Representatives passed a tax bill three days before we sent the January 2011 issue to the printer. As some of you may remember, we had to delay publishing our tax guide by a month because of the legislative uncertainty. Two years later, we again had to postpone publishing our tax guide. We entered 2013 with Congress pushing the United States to the edge of the fiscal cliff before agreeing to a budget.

Last month, Congress retroactively reinstated many so-called tax extenders, including the ability to make charitable contributions from individual retirement accounts in lieu of required minimum distributions and the option to deduct state and local sales taxes. Many of the reinstatements are permanent. While legislators might pat themselves on the back in front of constituents, some of these breaks came too late for individuals to actually take advantage of them in 2015. For example, the cap on paying for transit benefits with pretax dollars was retroactively raised from $130 to $250 per month. This change occurred too late for those who commute by public transit (including myself) to take advantage of it for 2015.

Compounding matters, I saw one news article say that by reinstating the tax breaks, Congress made it easier to reform the tax code in the future. How? By making it more complex, politicians have more room to simplify the tax code in the future. This is logic that only works inside the halls of Congress and the White House.

The renewal of tax extenders had been the source of scuttlebutt, so it wasn’t surprising to see them reinstated. (I wasn’t expecting a permanent reinstatement, however.) What was surprising were the changes to Social Security that legislators slipped into a budget act that was passed in November.

Restricted applications for spousal benefits are now only limited to those who attained the age of 62 at the end of 2015. You’re either grandfathered in or you’re not. This spring, you will no longer be able to file and suspend to allow your spouse to claim benefits on your earnings record. Treat the deadline as April 29 unless the Social Security Administration states otherwise. I discuss the changes and their implications here.

When to claim Social Security benefits ranks among the biggest financial decisions a person or a couple can make. Even a few years’ difference between claiming earlier or later can have a very significant impact on retirement income. Unmarried individuals have the easiest choice: delay as long as is reasonably possible unless you have good reason to expect a shorter life span. The decision is far more complex for couples, where both spousal and survivor benefits must be considered. Make the most informed decision you can and don’t hesitate to spend the money to consult with an adviser or to use a service for help.

I want to quickly go back to stock screens. Slightly less than half of the 64 stock screens AAII tracks posted gains in 2015 as of November 30, a sign of how tough the year was for stock pickers. (The results can be seen here.) There just wasn’t much breadth, with a small number of stocks keeping the S&P 500’s 2015 return near breakeven as of press time. While it’s frustrating, be careful not to let the frustration get the better of you. Constantly switching to the latest hot strategy is never a recipe for long-term success.

Wishing you a healthy and prosperous 2016,

Charles Rotblut, CFA
Editor, AAII Journal
@CharlesRAAII