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February News from MOAA

Dateline: 2/1/2017

New Travel Services Partner for MOAA Members

MOAA announced a new travel partner in Brennco Travel Services Inc., of Overland Park, KS, effective Jan. 1.   


Members can benefit from Brennco's concierge-level customer service, access to world-class destinations via cruises, resort vacations, guided tours, and military-themed trips, and best travel value for MOAA members.    


“Our members have expressed the importance of travel services as a MOAA benefit.” said retired Air Force Lt. Gen. Dana Atkins, president and CEO of MOAA. “We are truly privileged to partner with Brennco who offers a gold standard for the travel business and customer responsiveness.” Atkins continued, “This is a valuable benefit enabling MOAA to provide a broad array of travel opportunities coupled with first-class customer service for our members.” 


Brennco is no stranger to MOAA. Brennco served the nation's largest officers' association from 1998 to 2009. MOAA has again partnered with a company familiar with MOAA members' travel preferences and expectation for superior customer service.  


“On behalf of myself and everyone at Brennco, I want to thank MOAA for this outstanding opportunity” said Jon Brenneman, president, Brennco Travel Services Inc. “We consider it an honor to serve MOAA members and are fully committed to doing an exemplary job. It is our intention to earn your business and offer you travel and customer services you expect from a MOAA partner,” said Brenneman. 


All MOAA members are invited to visit or call (800) 211-5107, or email Brennco at to book their upcoming adventure.  As a special introductory offer, MOAA members are asked to sign up from now to Feb. 15, 2017, at for an opportunity to win a complimentary eight-day European river cruise for two by Viking River Cruises.


Trump selects new VA secretary, reaffirms promise to improve veterans’ health care

(This article was written on Jan. 11, 2017, prior to the inauguration.)


President-elect Donald Trump has selected Dr. David Shulkin to head up the Department of Veterans Affairs - and if confirmed, he will become the first non-veteran to lead the agency.

Shulkin, currently the VA's under secretary for health, was selected to lead the massive department after a lengthy search process. So far, he is the only government official from the current administration to be tapped to serve under the president-elect. Trump announced the nomination during a Wednesday press conference - his first since being elected in November. 

“He's fantastic - he will do a truly great job,” Trump said of Shulkin. “We're going to straighten out the VA for our veterans. I've been promising that for a long time, and it's something I feel very, very strongly.”

Shulkin will oversee the VA's more than 1,700 facilities and 300,000 employees that serve millions of veterans each year. Before taking on his current position at the VA in 2015, Shulkin held numerous chief executive, physician leadership, and academic roles. He also has a background in entrepreneurship, having founded DoctorQuality, an online information source for quality and safety in health care, according to his official bio.

He received his medical degree from the Medical College of Pennsylvania, interned at Yale University School of Medicine, and was a resident at the University of Pittsburgh Presbyterian Medical Center. 

In a statement, Shulkin called the opportunity to lead the VA an honor. 

“President-elect Trump's commitment to caring for our veterans is unquestionable, and he is eager to support the best practices for care and provide our Veterans Affairs' teams with the resources they need to improve health outcomes,” Shulkin said. “We are both eager to begin reforming the areas in our Veterans Affairs system that need critical attention, and do it in a swift, thoughtful and responsible way.”

All of the previous VA secretaries have had military experience, including the current director, Robert McDonald, who was an Army officer. During his press conference, Trump said his transition team had interviewed at least 100 people for the job before choosing to nominate Shulkin for the duty. 

Trump also reiterated his commitment to improve the VA. 

“Our veterans have been treated horribly,” the president-elect said. “They're waiting in line for 15, 16, 17 days. [There are] cases where they go in and have a minor, early-stage form of cancer and they can't see a doctor. By the time they get to the doctor, they're terminal.”

That's “not going to happen” on his watch, Trump said. His plans for reform include a 24-hour White House hotline that veterans can call if they have complaints about their VA care. He also wants to improve accountability within the department and allow veterans to seek care outside the VA system. 

Trump said Shulkin will work with “top of the line” hospitals that are going to “align themselves” with the VA. 

“We think this selection will be something that will - with time, with time - straighten it out, and straighten it out for good because our veterans have been treated very unfairly,” he said.   

What Do Rising Interest Rates Mean to Investors?

In December, the Federal Reserve raised the federal funds target rate, the first increase since December 2015. (That 2015 increase was the first in nearly a decade, since June 2006.) 


You might be wondering, what do rising interest rates mean to investors? It’s a simple question — with an involved answer. Interest rates are a key variable in a complex mix of factors that impact our financial lives, influencing both the interest rate we earn on fixed-income accounts and the amount we are charged to borrow money or use credit. 


Understanding the bigger picture may help you get a better handle on your money management. 


The Board of Governors of the Federal Reserve, through the Federal Open Market Committee, controls the federal funds rate — the rate banks are charged to borrow money. The management of the interest rate is a tool used to help manage the nation’s economic situation. 


It’s all about supply and demand: Interest rates help control the availability of money. Open up the supply of money, and it kick-starts the economy. If the money supply dries up, the economy slows down. 


Controlling interest rates helps manage the supply of money, which helps manage the nation’s business cycle. The business cycle is the roller-coaster movement of our economy: businesses grow, peak, fall, hit bottom, and start back up. 


Good and bad things happen as we go up and down with the cycle. Realize the down periods are natural and expected occurrences. 


Let’s start at the bottom.


The media paint a picture of the country augering in, but in reality, it’s all part of the business cycle. Every down period of a cycle hits a bottom and rebounds. 


At the bottom, interest rates usually are low. Inflation is low. Unemployment might be high, but businesses are starting to hire as they see a light at the end of a tunnel. 


Low Federal Reserve rates allow banks to fill their cash reserves with cheap money, to encourage borrowing. Consumers and businesses borrow to spend, and spending creates growth in the economy. 


Investors are poised for nice gains in the stock market as businesses begin to flourish. Bond holders and savers are not as happy because interest rates are low. Fixed-income savers look for other forms of investment returns, because interest rates can’t support them. 


The growth phase.


The early part of the up-cycle is a positive time. Unemployment drops. Wages increase. More consumers consume more. Businesses profit. Inflation creeps in, with rising prices, as markets expand and business booms. Interest rates rise. Businesses and people continue to borrow before interest rates get too high. 


Rising interest rates cause fixed-income investments to lose value: No one wants a bond that pays less interest than the new ones on the market. Plus, people don’t want an interest rate that falls too far behind the rate of inflation. It might help to consider money-market, short-term, or floating-rate fixed–income vehicles to stay up with rising interest rates. 


Stocks tend to appreciate, with positive revenues. Commodities rise; housing, resources. 


Eventually, inflation and higher interest rates cause businesses to struggle with increased operating costs, fewer consumers, and decreased revenues. Although businesses can increase prices for a while to stay profitable, before long, interest rates and inflation squeeze their profits. As a result, higher interest rates can contribute to decreasing stock values. 


Some inflation can be a good thing, if it is a factor of a strong economy. However, inflation in excess of healthy growth is not a good thing. Higher interest rates can help control inflation. 


Over the top and sliding down the hill.


At the top of the cycle, inflation and interest rates are high. Spending is in decline, businesses cut costs, and borrowing dries up. Eventually, interest rates drop to slow the economic decline and inflation starts to comes down. 


Interest rates fall and fixed-income values rise. Fixed-income investors find rates decreasing, and the older higher-interest rate bonds provide better income but cost more. Fixed-income investors switch to long-term vehicles to lock in higher rates. 


Stocks decline in value as business revenues continue to fall. Commodities start to decline. Then we start all over again. 


So where are we now?


Just as no battle plan survives first contact with the enemy, academic models don’t always accurately predict the real-world economy. 


We’ve been on a stock-market hot streak since March 2009, with only a hiccup in 2015. We are in the second-longest bull stock market in history. Good, right? Business must be great. So we are on the upswing? 


However, the country’s growth rate is anemic. Business is OK but not robust. The gross domestic product (GDP), a measurement of the nation’s economic growth, is only at 2.9 percent, below the average of 3.2 percent. So we are heading down or at the bottom? 


Interest rates are extremely low, indicating an unhealthy economy near the bottom. Inflation is also very low, indicating a slow business environment. 


Unemployment is low, but with a caveat: Some unemployed, who want work, are not counted because they haven’t looked for a job in a while or because they work part-time because they can’t find full-time employment. These people make up 9.3 million unemployed. 


So what does this mean to me?


The academic exercise above is nice, but it provides only a general sketch of possibilities. Have separate accounts based on your life objectives. Your objective will determine the style of management and the type of savings or investments. Manage those accounts by first considering the risk you are willing to assume and then balancing that against your expected returns. If we try to manage by returns only (do any of us really know where returns are going?), we could be surprised by the unexpected risk that bites us later. Visit to learn more.

MOAA Welcomes Former Members of NAUS into Membership Ranks
MOAA is pleased to welcome more than 2,000 former members of the National Association for Uniformed Services (NAUS) into its membership.


The leadership of both organizations worked closely to ensure the needs and interests of NAUS' officer members would continue to be well-served following NAUS' cessation of operations on Dec. 31, 2016.


The membership agreement with MOAA was first approved by MOAA's leadership last fall.  NAUS membership then approved the measure by an overwhelming vote on Dec 27, 2016.


In welcoming the former NAUS members, MOAA's President and CEO Lt. Gen. Dana T. Atkins, USAF (Ret), said, “MOAA has had the privilege of working closely with NAUS as longtime members of The Military Coalition. During this time, we have gained a great understanding of NAUS' mission and position on key issues, which have been closely aligned with MOAA's.” Atkins continued, “Our Chairman of the Board Gen. John “Jack” Sheehan and I are confident MOAA will not only meet, but exceed, the needs of NAUS' members.”     


This membership arrangement enables former NAUS members to continue to serve the military community and as new MOAA members, take full advantage of all benefits such as first-in-class advocacy for the military community and access to all MOAA publications, member programs, and products and services.

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