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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

There’s still time for some tax filers to qualify for a tax break known as the retirement saver’s credit, or saver’s credit, for 2023 taxes.
Despite the incentive, only 5.7% of taxpayers claimed the saver’s credit for tax year 2021, according to IRS estimates.

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Some retirement savers can still snag an extra tax incentive for 2023. However, most eligible filers don’t claim it, according to the IRS.
The retirement savings contribution credit, or “saver’s credit,” can help low- to moderate-income filers offset part of the funds added to an individual retirement account, 401(k) plan or other workplace plan.

You can still make a 2023 contribution to an IRA before the April 15 filing deadline to “earn a special tax credit,” according to the IRS.

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

How the saver’s credit works

You can claim as much as 50% of retirement contributions up to $2,000 for single filers or $4,000 for married couples filing jointly, for maximum credits of $1,000 or $2,000, respectively.
The tax break offers a dollar-for-dollar reduction of levies owed, which could reduce your tax bill or boost your refund.
But there are income limitations.
For 2023, your adjusted gross income can’t exceed $21,750 for single filers or $43,500 for married couples for the 50% credit. The percentages drop to 20% and 10%, respectively, as earnings increase, with a complete phase-out above $36,500 for individuals or $73,000 for joint filers.

Still, if you qualify for the saver’s credit, you could score multiple tax breaks for a last-minute deposit, including a possible deduction for pretax IRA contributions or future tax-free growth for Roth IRA deposits, said Mark Steber, chief tax information officer at Jackson Hewitt.

Why few filers claim the saver’s credit

Despite the incentive, only 5.7% of taxpayers claimed the saver’s credit for tax year 2021, according to IRS estimates. There are a few reasons for the slim percentage, experts say.  
Millions of low-earning Americans have little or no tax burden, and the saver’s credit isn’t refundable, meaning you can’t get the credit without owing on your taxes.
“If you don’t have much of a tax burden, or any tax liability at all, the value of the credit is extremely limited or potentially zero,” said Emerson Sprick, associate director for the Bipartisan Policy Center’s Economic Policy Program.

If you don’t have much of a tax burden, or any tax liability at all, the value of the credit is extremely limited or potentially zero.

Emerson Sprick
Associate director for the Bipartisan Policy Center’s Economic Policy Program

Plus, “most people don’t know this credit exists,” Sprick said.
Indeed, fewer than half of U.S. workers are aware of the saver’s credit, according to a recent survey from the Transamerica Center for Retirement Studies. 
However, even if someone has a tax liability and knows about the credit, they need to have enough money to save, Sprick said.
In 2027, the saver’s credit is scheduled to convert to a saver’s match from the federal government, which could address some of the current restrictions. But retirement savings barriers remain, experts say.
“The most effective way to bring people into the retirement savings ecosystem is through employer-sponsored retirement plans” with automatic contributions, Sprick said.
While access has improved, many Americans still don’t have a workplace retirement plan.

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Would-be homebuyers need to earn $113,520 a year to afford the typical house in the U.S. — 35% more than what the typical household earns annually, which is $84,072, according to a new analysis by real estate site Redfin.
February 2021 was the last month when the typical household earned more money than they needed to afford the median home. They’ve been in a deficit ever since, said Chen Zhao, a senior economist at Redfin.

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Housing costs are outpacing median household incomes in the U.S., further straining affordability.
Would-be homebuyers need to earn $113,520 a year to afford the typical house in the U.S. That is 35% more than what the typical household earns annually, which is $84,072, according to a new analysis by Redfin, a national real estate brokerage site.

“Since the pandemic, affordability has just totally collapsed,” said Chen Zhao, a senior economist at Redfin. 
February 2021 was the last month when the typical household earned more money than it needed to afford the median home. There’s been a deficit ever since, Zhao said.
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“That deficit hit a peak in October of 2023,” she added. “The reason why it hit a peak then is because that’s when mortgage rates peaked as well.”
Meanwhile, home prices also remained high because of an inventory crunch: the median sale price for a house was $412,778 in February 2024, according to Redfin.

Affordability deficit narrowed in February

The average household fell short $29,448 to afford a home in February, according to Redfin. In October 2023, households were short by $40,810. At that time, buyers needed an average income of $120,500 to afford a home.
The affordability deficit narrowed because mortgage rates have been on a consistent decline since the last peak in October, according to Zhao. At that peak, the average 30-year fixed mortgage rate hit 8% for the first time since 2000.

“It’s been a pretty big change since last October,” Zhao said. 
Other reasons such as seasonal pricing may be reflected, as home prices tend to decline in the winter months, said Jeff Ostrowski, a housing analyst at Bankrate.
However, potential buyers are still on the sidelines, said Veronica Fuentes, a certified financial planner at Northwestern Mutual.
“They’re either holding off or they’re taking their time,” she said.
Recent layoffs in the technology industry have affected some of her clients’ attitudes, Fuentes said. While her clients may not be on the chopping block, seeing their co-workers get laid off has made many of them more cautious.
“If you were laid off, could you still afford this mortgage? Do you have six months [of] emergency savings or even a year [of] emergency savings? … Can you still afford the mortgage for six months if you have no job?” Fuentes said.

Navigating high costs in the housing market

In a time when a potential buyer needs to earn about $114,000 a year to afford a median-priced house in the U.S., a starter home would make the most sense for price-sensitive buyers, experts say.
A potential buyer should make about $76,000 a year to afford a starter home, which Redfin defines as a home in approximately the bottom 1/3 of the housing distribution in terms of price.
Starter homes are hard to come by. Home builders over the past 15 years or so have moved away from building entry-level homes, said Ostrowski.
For almost the entire second half of the 20th century, someone could buy a home for $120,000 in many parts of the U.S., he said.
“That just doesn’t exist anymore,” Ostrowski said.
Buyers could seek lower costs in certain markets in the U.S. There are 13 metropolitan areas where buyers might afford the typical home without earning six figures, Redfin found. 
In Detroit, the typical household needed to earn $46,168 to afford the median-priced home in February, making it the most affordable market in the country. It was followed by Cleveland ($58,186), Pittsburgh ($61,603), St. Louis ($66,755) and Philadelphia ($73,182). The other metros where homebuyers making less than $100,000 can afford the typical home are Indianapolis, Cincinnati, Milwaukee, Warren, Michigan; Kansas City, Missouri; Virginia Beach, Virginia; San Antonio, Texas, and Columbus, Ohio.

What’s to come for the housing market

Experts say borrowing costs should come down as the Fed solidifies its plans to cut back interest rates. Home price growth is also expected to soften as inventory increases.
New listings climbed 5% during the last four weeks ended March 17, the biggest year-over-year jump since May 2023, Redfin found.
“People are getting kind of tired of waiting, so we’re starting to see a lot more inventory come on,” Zhao said.
However, take this with a grain of salt, Ostrowski said, as the outlook six months ago was very different from how things played out.
“If you’re ready and you can afford it, buy now,” he said. “Conditions probably aren’t going to get significantly better.”
Indeed, while the combination of lower rates and boosted supply should help with affordability, “it’s not going to completely change the picture,” said Zhao.

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The “quiet luxury” trend has been hard to shake, even though, these days, most Americans are more likely to live paycheck to paycheck.
As more Americans are put off by fast fashion, investing in quality clothing that lasts longer than one season makes economical and environmental sense, some experts say.
Budget-conscious consumers can still achieve an “old money” look by shopping secondhand.

Actress Gwyneth Paltrow enters the courtroom for her trial in Park City, Utah, March 24, 2023.
Rick Bowmer | Getty Images

“Quiet luxury” is back under a new name: old money style.
The quiet luxury trend, marked by expensive materials in muted tones, caught on in a big way after Gwyneth Paltrow’s ski accident trial last March, even when most Americans were living paycheck to paycheck.

At the start of the new year, “loud budgeting” was seemingly the antidote — encouraging consumers to take control of their finances and make money-conscious decisions, rather than modeling purchase behaviors after celebrities and their bottomless pockets.  
But experts say quiet luxury is still alive and well, although the emphasis is now on “old money,” which is still expensive but grounded in a timeless, classic look and lifestyle — with or without the generational wealth.

What is ‘old money style’?

“We are enamored with the old money style and its easy-to-wear classic clothes, it’s familiar and comforting,” said Sonya Glyn, editor of Parisian Gentleman, an online fashion blog, and host of “Sartorial Talks” on YouTube.
Quiet luxury, classic prep and even “mob wife” all fall under the old money aesthetic, which is reflective of the current economic climate, according to Glyn.
In the wake of the Covid pandemic, Americans’ financial circumstances became increasingly divided during the so-called K-shaped recovery, which left the wealthiest Americans even better off than before.

Unlike other periods of prosperity, quiet luxury is rooted in understated colors and high-end craftsmanship rather than the bold color palette and flashy logos of previous economic peaks that were felt more broadly nationwide.
“It was a combination of discretion and snobbery,” Glyn said.
At the same time, the trend hit on a formula that works and is easily replicated with neutral tones or completely monochromatic looks.  

Why quiet luxury won’t go away

Young adults, especially, are becoming more conscious about buying pieces that can survive more than one season, according to Thomaï Serdari, professor of marketing and director of the fashion and luxury program at New York University’s Stern School of Business. 
In many ways, it’s the antithesis of fast fashion, which has a very well-known sustainability problem and environmental toll largely due to significant greenhouse gas emissions and the introduction of cheaper plastic fibers. 
“That is the new mindset that has allowed quiet luxury to stick around a little longer,” Serdari said.

Even budget-conscious consumers can achieve a “big money” look by shopping for vintage clothing and accessories secondhand, Glyn said. “The idea is to buy things that last,” she said.
“It’s still quiet luxury because you are still buying high-level items,” Glyn added. “It’s glamorous.”
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This type of quiet luxury is “overdue,” Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, recently told CNBC.
As persistent inflation makes many Americans feel stretched too thin, it’s time to shift away from a “keeping up with the Joneses” mentality.
“Find quality things that last a lot longer — that’s better than throwaway pieces,” said McClanahan, who also is a member of CNBC’s Advisor Council.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

 Last year, the IRS received 294,138 complaints of reported identity theft, the second most in its history — and the agency’s criminal investigation agents identified more than $5.5 billion in tax fraud. 
 If you receive an email, text or call from an unknown company offering to assess your potential tax savings or get you a bigger refund, be wary.
The IRS says it will “never initiate contact with taxpayers by email, text, or social media regarding a bill or tax refund.” 

Karl Tapales | Moment | Getty Images

As the April 15 federal tax deadline draws near, most taxpayers have less than two weeks to submit their 2023 individual tax return or file an extension — but for scammers, that’s still ample time to try to steal filers’ personal and financial information. 
Last year, the IRS received 294,138 complaints of reported identity theft, the second most in its history. The agency’s criminal investigation agents identified more than $5.5 billion in tax fraud. 

As of its March 22 report, the IRS has processed 79.2 million federal returns — almost half of the 167 million individual tax returns it expects to be filed this season, according to IRS spokesman Eric Smith. 

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

Taxpayers who have yet to submit their return or tax payment need to take precautions, fraud experts say. 
“File electronically or go directly into the post office to mail out your tax returns or a tax payment,” said Jennifer Hessing, fraud analytics director at Wells Fargo. “External mailboxes can be targets for theft as scammers look to steal personal information or checks being sent out for tax payments.”
Here are three common tax scams and ways to avoid them: 

Beware of unsolicited emails, texts, phone calls

If you receive an email, text, or call from an unknown person or company offering to assess your potential tax savings or get you a bigger refund, be wary.

The pitch could go like this: “We would love to get that [refund] to you as easily and as quickly as possible. All you need to do is provide us with some information, and we’ll make that happen,” said Steve Earls, head of consumer data security at IDShield. “If you’re like, ‘I don’t trust you, do you have a phone number I could call?’ They even have fake call centers. It’s all the same kind of conglomerate.”  
Calls, emails or text messages from scammers posing as legitimate tax or financial organizations may also ask you for valuable personal and financial information that can lead to identity theft. 

Third-party offers to set up your IRS account

Other schemes may help you set up an online account at IRS.gov to fill out and process your return more quickly. You may be asked for your Social Security number or Individual Taxpayer Identification Number and a photo ID to set up the online account.
Then the fraudster can sell that information or use it themselves to file fraudulent tax returns, open credit card accounts or get loans.  

‘Ghost tax preparers’

A “ghost tax preparer” may prepare your return but fail to sign the document or provide their address or tax ID number. They may assume you’ll sign a return without verifying this information and have then already captured your personal and financial information. 
One of the easiest ways to spot a scam is when a taxpayer hires someone to prepare a return and information on the paid preparer section of the return is missing or says “self-prepared,” said Los Angeles-based certified public accountant Miklos Ringbauer.
“That should be the very first and utmost red flag for a client when they are looking at the return to review,” he said. “A taxpayer should never file a return and just sign without reviewing their returns.”

Tips to avoid tax scams

The IRS will usually contact you through regular mail, not by phone. The agency says it will “never initiate contact with taxpayers by email, text, or social media regarding a bill or tax refund.” 

Only use the approved authentication process available on IRS.gov. 

Reporting tax scams
If you believe you are a victim of a tax scam, immediately report it to government officials. 

The IRS advises reporting all unsolicited emails claiming to be from the IRS or an IRS-related entity to phishing@irs.gov. 

If you’re a victim of identity theft, the Federal Trade Commission offers a step-by-step guide on what to do at identifytheft.gov.

CNBC’s Stephanie Dhue contributed reporting.
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Singapore, Denmark and U.S. are the best places in the world to conduct business, according to the Economist Intelligence Unit business environment ranking.
EIU’s ranking is measured based off indicators such as inflation, cost of living, economic growth, and fiscal policies. 
Some notable “big improvers” that scored well in the index were countries like Greece, Qatar and India.

Singapore topped the list on the Economist Intelligence Unit’s business environment ranking.
franckreporter | E+ | Getty Images

Singapore, Denmark and U.S. are the best places in the world to conduct business, according to the Economist Intelligence Unit business environment ranking.
“Singapore will remain the best geography in the world to do business, as it has for the past 16 years,” EIU’s Country Forecast Manager and Europe analyst, Prianthi Roy, told CNBC.

Factors driving the Southeast Asian nation’s place as a premier business destination is its political stability and the government’s focus on helping domestic private-sector companies upgrade technologically, she said.
The EIU’s ranking assesses the attractiveness of doing business across 82 countries and territories, and is measured based on indicators such as inflation, cost of living, economic growth, and fiscal policies. 
The gauge also offers insights to which economies are better placed for growth than others, and an “effective way to identify where an uptick in investment spending may soon be coming,” said EIU’s analysts.

Top 10 economies

Behind Singapore are Denmark and the U.S., which took the second and third spots respectively.
Denmark, with its “solid macroeconomic fundamentals” and high quality transport and digital infrastructure lends itself as one of the world’s most attractive business locations, Roy said.

Market opportunities will remain favorable in the U.S., especially with few restrictions to foreign trade and investment in the U.S., she added.

“Singapore, Denmark and the U.S. are projected to have the best business environments over the next five years,” the report showed.
Germany and Switzerland placed fourth and fifth, while Canada, Sweden, New Zealand, Hong Kong and Finland make up the rest of the top 10 best places in the world to do business.
“These are all advanced economies and long-standing strong performers in our index, so tend to be safe bets for investments,” the report stated, but cautioned that both headline and per-capita GDP growth rates are likely to remain stable and relatively slow.

Countries making the biggest improvements

Some notable “big improvers” that scored well in the index were countries like Greece, Qatar and India.
Greece saw the biggest improvement in business climate in the EIU’s index due to the reforms brought about by a pro-business government, the report showed.
Free market reforms promised by Argentina’s President Javier Milei, aimed at boosting private enterprise and attract foreign investment, propelled the country’s sharp improvement in rankings to the second most improved business environment.
“India is the only single-country market that offers a potential scale comparable to that of China,” the report said, adding that the country’s young demographic profile bodes well for its labor force and future demand. India ranked third on the list of most improved business environments. More

Social Security beneficiaries who have to pay back excess benefits to the agency may have less money withheld from their monthly checks, as new policies take effect.
Affected beneficiaries may also qualify to have those repayments waived.

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Social Security beneficiaries who owe money to the Social Security Administration may see much lower default withholding rates from their monthly checks, thanks to new policies that are going into effect.
As of March 25, the Social Security Administration will no longer collect 100% of a total monthly Social Security benefit payment to recoup the money a beneficiary owes due to overpayment of benefits.

Instead, the agency will collect either 10% of a beneficiary’s total monthly benefit or $10 — whichever is greater.
But there may be a short period where beneficiaries are still affected by the old policy, the agency announced Friday.
If that happens, affected beneficiaries should call the Social Security Administration at 1-800-772-1213 to lower their withholding rate, the agency said.
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The new rules apply to overpayments, which are triggered when the amount of benefits due is miscalculated and checks are sent for higher sums than what beneficiaries are owed.

When that happens, the Social Security Administration is required by law to seek repayment of the excess money paid to beneficiaries. But it might not be clear that an overpayment has happened for years, sometimes resulting in overpayment notices for tens of thousands of dollars.
In recent years, the problem with overpayments has become worse, said David Camp, CEO at the National Organization of Social Security Claimants’ Representatives.
“There were always far too many overpayments,” Camp said, as the agency has struggled over the years with limited or outdated resources. “Although in the last few years, it’s been a steady, though shockingly high, sum total of overpaid individuals.”
Supplemental Security Income, or SSI, beneficiaries who face strict limits on their income and assets are particularly vulnerable to overpayment issues, Camp said.
The Social Security Administration said it is working to curb the burden to affected beneficiaries.
“We are no longer going to have that clawback cruelty of intercepting 100% of a payment if people do not respond to our notice,” Commissioner Martin O’Malley said during recent testimony before the Senate.

While the new repayment threshold applies to new overpayments, beneficiaries who currently have an overpayment withholding rate greater than 10% can contact the Social Security Administration to have that lowered, the agency said.
All affected beneficiaries should call the agency about the 10% repayment rate, Camp said, but they need to approach the process with patience. The Social Security Administration does not have enough staff to answer a high volume of calls, so beneficiaries should expect a hold time, Camp said, as well as processing time.
The Social Security Administration is also implementing other new policies to address overpayments, including shifting the burden of proof away from Social Security claimants when determining who is at fault for the error.
The maximum time for repayment plans is being extended to 60 months, up from 36 months. It will also be easier for beneficiaries to request a waiver so they don’t have to pay back the sums.
“The great majority of claimants never request a waiver, although many of them could qualify,” Camp said.
That’s particularly true for beneficiaries who are struggling to meet their basic needs or who are at risk of being evicted because they are repaying Social Security, he said.
“Claimants ought to know that they can also ask for not having to pay it back at all if it wasn’t their fault and they can’t afford to repay,” Camp said.
To request a waiver, a beneficiary must fill out a form.
Since O’Malley was sworn in as commissioner in December, he has taken some “very aggressive steps” toward addressing the overpayment issues that vex beneficiaries, said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
“They’re so reasonable, it makes you wonder why no one did it before,” said Richtman, referring especially to the end of the policy of withholding all of a beneficiary’s monthly payments until the entire overpaid sum is repaid.
“That’s a huge burden on most beneficiaries who live on Social Security or the majority of their income is Social Security,” Richtman said. More

The Powerball jackpot officially hit $1 billion on Monday, the game’s fifth-largest grand prize.
There are two payout options for the lucky winner: a lump sum of $483.8 million or an annuity worth $1 billion. Both are pretax estimates.
The next Powerball drawing is Monday at 10:59 p.m. ET.

Scott Olson | Getty

Between Uncle Sam and the winner’s home state, that headline number could be cut in half by the time it reaches their hands.

Landon Buzzerd
Associate wealth advisor at Grant Street Asset Management

Eight states don’t tax lottery winnings. They are: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
The next Powerball drawing is Monday at 10:59 p.m. ET, and the chances of hitting the jackpot are roughly 1 in 292 million.

Lump sum distribution could be ‘a mistake’

“Virtually everybody who wins the lottery picks the lump-sum distribution,” Andrew Stoltmann, a Chicago-based lawyer who has represented several lottery winners, previously told CNBC. “And I think that’s a mistake.”
Without a team of experts, or “infrastructure,” such as a financial planner, tax advisor and attorney, a big winner could easily mismanage the lump sum windfall, he said.
“Any sizable lotto win will often lead to a huge change in lifestyle,” said Houston-based CFP Crystal McKeon, chief compliance officer at TSA Wealth Management. “People buy mansions, boats, planes, invest in bad business deals or give money away because they think they have more than enough.” 
The 29-year annuity could offer guardrails, which may be appropriate for certain winners, experts say. Of course, the opportunity cost for the annuity is less money to invest upfront.

The latest Powerball jackpot comes less than one week after a single ticket purchased in New Jersey won Mega Millions’ fifth-largest grand prize of $1.128 billion.
That grand prize is back down to $36 million and the chances of winning are roughly 1 in 302 million. More

Roughly two dozen colleges and universities have “no-loan” policies, which means they will meet 100% of an undergraduate’s need for financial aid with grants rather than student loans, according to The Princeton Review.
Now more students from middle-class families will be able to graduate debt-free after some schools further expand their financial aid programs, experts say.

Amid arguably the worst year to apply for financial aid, some colleges are implementing new strategies to entice students wary of the high cost.   
Vanderbilt University announced it is expanding Opportunity Vanderbilt to include full-tuition scholarships to students of families with an annual income of $150,000 or less. Meanwhile, Dartmouth also said it is nearly doubling its current income threshold for a “zero parent contribution” for parents with an annual income of $125,000, up from $65,000.

“As costs continue to escalate we think it’s so important there is access,” said Doug Christiansen, Vanderbilt’s dean of admissions and financial aid.
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In a year plagued by problems with the new Free Application for Federal Student Aid, students who were already struggling under the weight of the tab now face additional barriers, Christiansen said, which could ultimately hurt college enrollment.
“I am concerned on a national level that we will have a portion that think they can’t afford it,” he said. “Students who may be in a lower-income situation are throwing their hands up and saying, ‘I just can’t go.'”

Dartmouth College
Cheryl Senter/Bloomberg | Getty Images

“College affordability is a serious issue for these families,” Lee Coffin, Dartmouth’s vice president and dean of admissions and financial aid, said in a statement.

“Increasing the threshold for expected parent contributions for a greater number of families is a strong, important commitment to addressing the college affordability concerns for middle-income families,” Coffin said.
Dartmouth’s expansion of financial aid awards for undergraduates, which goes in effect in the next academic year, was funded by a $150 million donation from the late Glenn Britt, marking the largest gift dedicated entirely to scholarships in the school’s history.

Colleges with ‘no loan’ policies

Roughly two dozen schools already have “no-loan” policies, which means they are eliminating student loans altogether from their financial aid packages, according to data from The Princeton Review.
Among the schools on The Princeton Review’s “The Best 389 Colleges” list, 23 promise to meet 100% of their undergraduates’ financial need with grants rather than education debt.

‘No loan’ doesn’t always mean debt-free

Of course, even without loans, students may still be on the hook for the expected family contribution, as well as other costs, including books and fees. There could also be a work-study requirement, depending on the school.
Even if a school has a no-loan policy, that also does not prevent a student or family from borrowing money to help cover their contribution, according to Jerry Inglet, a family legacy advisor at Wilmington Trust in Buffalo, New York.
“No loan is a misnomer at best,” he said.

Have a more affordable backup

When picking colleges, Inglet advises students and families to also consider a “financial safety school” in the application process, which could offer more merit-based aid and bring the total cost down.
“I would have a wide net of possibilities that include a number of schools that are both academic and financial safety schools,” he said.
To determine which schools may be the more affordable options, the U.S. Department of Education’s college scorecard and each school’s net price calculator can help.
Also, have a conversation about your family’s financial capacity at the outset so students have realistic expectations of which schools are within reach, Inglet said.
“Set the guardrails early,” he added.
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