Monday, November 22, 2021

As inflation jumps, here's a look at how much more Americans are paying for food and fuel

 Americans are paying higher prices this year than in roughly three decades. Inflation surged 6.2% in October, paced by steep increases in heating fuel, gasoline and food, labor data showed last week.

As inflation rises, here's a closer look at the rise in costs for two major household expenses — food and fuel — that have spiked compared with a year ago ...

Read more at CBS News - 3 minute read

Monday, November 15, 2021

NFTs and Blockchain: What You Should Know About the Digital Collectibles Craze

 In March 2021, a digital image by a graphic artist known as Beeple was sold in the form of a nonfungible token, or NFT, for $69.3 million, making him the third-most-valuable living artist. This was the first sale in history by a major auction house of a purely digital work of art that doesn’t exist in physical form.1



A nonfungible token is a unique digital asset authenticated by blockchain, the underlying record-keeping technology relied upon to certify its originality and ownership. NFTs first appeared in 2018, but the market took off in 2020 and early 2021 when a flurry of digital collectibles — including images, videos, music, trading cards, sports highlights, virtual real estate in online gaming worlds, tweets, gifs, and even viral memes — were minted as NFTs and traded as assets.

Women Face Challenges in a Post-Pandemic World

 The COVID-19 economic crisis tested the mettle of all Americans, particularly working mothers. Research shows that the pandemic’s impacts on women have been far-reaching and potentially long-lasting. Now that the U.S. economy is picking up steam, it may be more important than ever for women to re-examine their retirement planning strategies.



Effects of the COVID-19 Economy

The COVID-19 recession had a disproportionate impact on working women because sectors that typically employ them — including retail, hospitality, and health care — were hit harder than others.

Net Price Calculators Help Gauge College Affordability

 Fall is the time when many high school seniors narrow their college lists and start applying to colleges. One question that is often front and center on the minds of families is “how much will it cost?” To help answer that question, you can use a net price calculator, which is available on every college website.



How a net price calculator works. A net price calculator can help families measure a specific college’s true cost by providing an estimate of how much grant aid a student might expect based on his or her financial information and academic profile. A college’s sticker price minus grant aid equals a student’s net price, or out-of-pocket cost.

The numbers quoted by a college net price calculator are not a guarantee of grant aid, but the estimates are meant to be close.

Thursday, October 21, 2021

Credit Scores Reach Record High

 The average FICO® credit score in the United States reached a record high of 711 in 2020, despite the financial challenges of the pandemic. In fact — contrary to what might be expected — consumer debt management improved after January 2020, with shrinking debt, decreased use of credit, and a drop in late payments.1

This may reflect more cautious spending by consumers in the face of a struggling economy, as well as support from government stimulus. Even so, credit scores have been steadily increasing for the last decade.2

An Important Number

Your credit score can influence loan approvals and terms for a variety of financial transactions, not only for major purchases such as a home or car but also for credit cards, insurance premiums, and home rentals. It may even affect a job application.

Thursday, October 7, 2021

Fund Retirement and Reward Workers with a Cash Balance Plan

Cash balance plans are defined benefit plans that share some key characteristics with 401(k) plans, which makes them flexible and appealing to a growing cadre of small employers. In fact, there was a 17% increase in new cash balance plans between 2017 and 2018.1

alt=""

The Tax Cuts and Jobs Act helped boost the popularity of cash balance plans, because making deductible contributions can help partners in professional service firms and other business owners reduce their income below certain thresholds to qualify for an additional 20% tax cut.

These hybrid plans have generous contribution limits that increase with age. In 2021, a 65-year-old could save as much as $276,000 in a cash balance plan, while a 55-year-old could save $207,000 on a tax-deferred basis (until the account reaches a maximum accumulation of $2.5 million).2 They can also be stacked on top of a 401(k), which has a maximum contribution of $26,000 in 2021, or $64,500 with a profit-sharing plan.

Having the ability to make larger contributions may allow business owners to reduce their tax burdens, build retirement savings, and reward valuable employees — all at the same time.

Grandparent 529 Plans Get a Boost Under New FAFSA Rules

529 plans are a favored way to save for college due to the tax benefits and other advantages they offer when funds are used to pay a beneficiary’s qualified college expenses. Up until now, the FAFSA (Free Application for Federal Student Aid) treated grandparent-owned 529 plans more harshly than parent-owned 529 plans. This will change thanks to the FAFSA Simplification Act that was enacted in December 2020. The new law streamlines the FAFSA and makes changes to the formula that’s used to calculate financial aid eligibility.



Current FAFSA Rules

Under current rules, parent-owned 529 plans are listed on the FAFSA as a parent asset. Parent assets are counted at a rate of 5.64%, which means that 5.64% of the value of the 529 account is deemed available to pay for college. Later, when distributions are made to pay college expenses, the funds aren’t counted at all; the FAFSA ignores distributions from a parent-owned 529 plan.

By contrast, grandparent-owned 529 plans do not need to be listed as an asset on the FAFSA. This sounds like a benefit. However, the catch is that any withdrawals from a grandparent-owned 529 plan are counted as untaxed student income in the following year and assessed at 50%. This can have a negative impact on federal financial aid eligibility.