Markus Andrews

The land below many U.S. cities is sinking, including New Orleans, New York City, Miami and south San Francisco.
This phenomenon, known as land subsidence, can severely affect the integrity of buildings and infrastructure. When coupled with a sea-level rise, it can greatly increase the incidence of flooding.

Problems associated with land subsidence can cost U.S. homeowners 6% of their home value. In areas with high subsidence, that number can jump to 8.1%, according to forthcoming research done by assistant professor of public policy Mehdi Nemati at the University of California, Riverside, and his colleagues. Their research focused on the Central Valley of California, but Nemati said the findings could be extrapolated nationwide.
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Standard homeowners insurance usually does not cover land subsidence issues, according to Policygenius, although in some areas, you may be able to purchase specific coverage for subsidence caused by nearby mines or mining activity.
Consumers are likely to see the effect of land subsidence directly, in the form of problems with their home, and indirectly, in the form of issues for their local economy.

What causes land subsidence

Both natural and man-made processes cause land subsidence.

As glaciers are receding from the land in the U.S. and Canada, the process creates a “see-saw” effect where the land in the U.S. falls but rises in Canada, researchers say.
Manoochehr Shirzaei, a professor of geophysics and remote sensing at Virginia Tech, also attributed some land subsidence to tectonic processes.
“For example, earthquakes can make the land rise, but also in some places [make it] fall. So these two are considered to be natural processes,” he said.
Human-induced land subsidence relates to how we have developed our cities, namely groundwater extraction and building practices.
“We use groundwater to drink and for other purposes. And as we take water out from the land, the space beneath it becomes compact because we’ve built on top of it,” said Rob Freudenberg, vice president of energy and environment at the Regional Plan Association. Heavy building materials also compact the land, putting infrastructure at risk.

When designed, most infrastructure does not account for shifting land. This can be dangerous, experts say.
“If you think of something like a rail line and the rail lines running across ground that’s sinking, some of that will sink, some of it will not,” Freudenberg said. “So now you might have kind of erosion beneath the track where you didn’t have it before. You might have to realign the tracks.”
Watch the video above to learn more about how land subsidence is putting U.S. infrastructure in a precarious situation and how much it could cost to fix it. More

The share of people with medical debt in collections that shows up in their credit reports has fallen in the past decade, according to the Urban Institute.
Yet the median medical debt in collections increased in that time.
New efforts, including medical debt forgiveness, may help reduce the burden of high health-care costs.

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The share of people with medical debt in collections that shows up in their credit reports has fallen in the past decade.
Yet unpaid balances due to health-care costs continue to burden individuals and families.

In 2013, 19.5% of Americans had medical debt in collections, while 10 years later, in 2023, that share fell to 5%, according to new research by the Urban Institute. The change is largely due to efforts by the major credit bureaus in 2022 and 2023 that removed paid medical debts from credit reports and delayed reporting of unpaid debts.
Yet the median medical debt in collections increased in that time, to $1,493 in 2023 from $842 in 2013, the Washington, D.C.-based think tank found.
“Consumers had previously had medical debt in collections on their files; since then, their credit scores have increased significantly,” said Breno Braga, principal research associate at the Urban Institute.
That can make it easier for debtors to access other types of credit, apply for jobs or rent housing, he said.

The states where consumers saw the biggest reductions in medical debt in collections from 2021 to 2023 were concentrated in the South, according to the Urban Institute. West Virginia saw its share of residents with medical debt in collections go from 25.8% to 6.7%; South Carolina went from 24.4% to 9.1%; Oklahoma went from 23.7% to 10.1%; Louisiana dropped from 21.3% to 8.1%; and Mississippi dropped from 18.5% to 6.1%.

Colorado had no medical debt in collections in 2023 after it banned credit bureaus from including medical debt on credit reports. Other states with the lowest levels of medical debt in collections in 2023 included Minnesota, with 0.7%; Hawaii, 1.2%; Vermont, 1.2%; and Washington, 1.4%, according to the Urban Institute.

‘Lots of people can’t afford health care’

The Consumer Financial Protection Bureau in June proposed banning medical bills from credit reports. The independent government agency estimates the rule would remove up to $49 billion in medical debts from credit reports.
“There’s an increasing recognition that most people have health insurance, but lots of people can’t afford health care,” said Matthew Rae, associate director of the Health Care Marketplace Program at KFF, a nonprofit organization that provides health policy research. “We’ve got to think about affordability differently.”
While efforts to erase medical debts from credit reports will help debtors, it isn’t the heart of the issue, according to Rae.
Recent KFF research found people who carry medical debt are more likely to be financially vulnerable in other ways compared with adults who do not carry those unpaid balances.
Of adults with medical debt, 72% reported carrying a credit card balance, 68% had no rainy-day fund, and 58% said they were just getting by financially, according to KFF’s analysis of 2021 data.
In comparison, just 37% of adults with no medical debt said they carry a credit card balance, while 37% had no rainy-day fund, and 28% said they were just getting by.

A protestor at the 2022 March for Medicare for All in Washington, D.C.
Probal Rashid | Lightrocket | Getty Images

Adults with medical debt were also more likely to overdraw their checking accounts, to have been contacted by a debt collection agency, to use a pawn shop or to use a short-term payday loan one or more times, KFF’s research found.
“We find that people who have medical debt end up fighting all sorts of other debt,” Rae said.
However, it’s unclear where the problem starts — if people with, say, credit card debt are more likely to go into medical debt or vice versa, he said.
Medical debt is “absolutely” a cause of bankruptcy, Rae said, especially when the high debts are combined with an inability to work.

About $7 billion in medical debt to be canceled

Certain states, cities and counties are canceling about $7 billion in medical debt through the American Rescue Plan Act, federal legislation that was enacted in 2021.
The move will cancel medical debt for up to 3 million Americans, the White House estimated in June.
“Today, I am issuing a call to states, cities, hospitals across our nation to join us in forgiving medical debt,” Vice President Kamala Harris said during a June press call.

Vice President Kamala Harris delivers remarks on medical debt relief at an event at the Eisenhower Executive Office Building, in Washington, D.C., April 11, 2022.
Stefani Reynolds | AFP | Getty Images

The move is politically popular, according to a recent study from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research.
More than half of adults — 51% — said it is extremely or very important for medical debt to be forgiven, versus just 39% who said the same for student loan debt, the groups’ May poll found.
For debtors who are currently struggling with balances, there are some steps they may take to try to get financial relief, according to Rae.
With network providers, you “absolutely should” try to negotiate and don’t take the first number, Rae said. There may be less room to reduce a bill if you’re on a high-deductible plan or have a high co-pay.
Prescriptions are also an area where patients tend to face burdensome costs, Rae said. It’s wise to shop around to find the best price a pharmacy or mail order plan can provide, he said. More

More than half of investors (57%) surveyed by investment company Betterment said they are feeling anxious about the upcoming election.
Keeping a diversified portfolio and putting more in savings can be smart strategies, experts say, rather than moving investments in response to political news.

US President Joe Biden and former US President and Republican presidential candidate Donald Trump participate in the first presidential debate of the 2024 elections at CNN’s studios in Atlanta, Georgia, on June 27, 2024.
Andrew Caballero-reynolds | Afp | Getty Images

Presidential election outcomes don’t significantly affect market performance, but many investors still feel nervous about what this year’s presidential matchup between President Joe Biden and former President Donald Trump could mean for their money.
More than half of investors (57%) surveyed by investment company Betterment said they are feeling anxious about the upcoming election and 40% expect to move or pull investments based on the election outcome.

Betterment polled 1,200 individual investors this spring across four demographic cohorts: Generation Z, millennials, Generation X and baby boomers.
Financial experts, however, don’t encourage making investment decisions for political reasons as markets tend to react to economic factors that politicians have no control over. Even in a contentious election year, they advise keeping a diversified portfolio and saving more instead of making money decisions based on politics.
“The economy keeps chugging along whether we have a Democrat or Republican in office, so to place big bets against one candidate winning over another is not a good investment strategy,” said Cathy Curtis, a certified financial planner and founder of Curtis Financial Planning in Oakland, California.

Blending political opinions and portfolios

Curtis, who is a member of the CNBC Financial Advisor Council, said she has seen her clients express more confidence in the market overall this year. The Nasdaq Composite, S&P 500 and Dow Jones Industrial Average have continuously broken records in 2024.
“We’ve got a very stable market,” Curtis said. “People realize that. I get no anxious emails or even questions [from clients] about the market. In really volatile years, people really pay attention to when things go down.”

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Still, clients visiting Curtis have expressed concerns about the idea of Trump winning the election. 
She attributes the anxiety she’s seen more of in recent years to a rise in polarization. Still, Curtis encourages her clients not to move their money in response to these feelings.
“Most of my clients are scared to death of another Trump presidency,” Curtis said. “So that creates a lot of anxiety around investing, but most of my clients are educated people. Once you show them the facts, they tend to calm down.”
Nevertheless, it is becoming more common for investors to blend their political opinions with their portfolios, according to Dan Egan, vice president of behavioral finance and investing at Betterment. Egan said he is seeing investors altering their portfolios because they believe the winning candidate will influence the economy or stock market more now than those in the recent past.
Despite this change in investor behavior, he said the outcome of presidential elections hasn’t historically affected the stock market in a significant way.
Dating back to 1928, the S&P 500 has returned an average 7.5% in presidential election years, compared to an average 8% in nonelection years, according to an analysis in March from J.P. Morgan Private Bank.
“Regardless of who you look at, be it Democrat or Republican or whoever, the stock market goes up on average,” Egan said. “There’s not a big impact to, especially the president, in terms of what they can do to the economy, to things like inflation. This is why we have checks and balances and separations in terms of the Federal Reserve, and so on.”

When considering the potential impact of the election on their portfolios, 29% of investors surveyed by Betterment said they planned to increase holdings in savings accounts.
Experts say that having a cash reserve can be smart given current high rates on savings accounts and other low-risk investments, but caution investors from keeping too much on the sidelines and out of the market.
“Right now you can get really good rates on your money, so I encourage people to hold bigger cash reserves,” Curtis said. “If they don’t want to put everything into the market, it’s OK.”

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President Joe Biden could forgive the debt of millions of student loan borrowers weeks before voters decide between him and former President Donald Trump at the ballot box.
“The conflict between Democrats and Republicans over forgiving student debt will be in effect during the election,” said higher education expert Mark Kantrowitz.

Two federal judges in Kansas and Missouri on Monday at the urging of several Republican-led states blocked President Joe Biden’s administration from further implementing a new student debt relief plan that lowers payments.
Bloomberg | Bloomberg | Getty Images

President Joe Biden could try to forgive the debt of millions of federal student loan borrowers just weeks before voters decide between him and former President Donald Trump at the ballot box in November.
In the Biden administration’s Spring 2024 Unified Agenda, the U.S. Department of Education disclosed that it will publish its final rule on student loan relief sometime in October.

Due to the timeline of regulatory changes, that would normally mean the administration wouldn’t be able to carry out its program until July 2025, said higher education expert Mark Kantrowitz. However, the department could act sooner simply by publishing a notice in the Federal Register, he noted.
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“I expect publication [of the rule] to occur in early October, so that the conflict between Democrats and Republicans over forgiving student debt will be in effect during the election,” Kantrowitz said.
A spokesperson for the Education Department said the Biden administration has already made historic changes to “a broken student loan system.”
“This administration is committed to providing relief to as many borrowers as possible as quickly as possible, and these regulatory efforts would help provide tens of millions more borrowers with financial breathing room,” they said.

Loan forgiveness a sharp partisan issue

Conservatives typically question the fairness of forgiving the debt of those who’ve benefited from a higher education, and saddling taxpayers with the costs of doing so. Just over a third of Americans aged 25 and older have a bachelor’s degree, according to an estimate by Kantrowitz.
“We are proud to stand with taxpayers in demanding the Biden administration abandon plans to force all Americans to take on the debt of a select few, something the Supreme Court has already deemed unconstitutional,” said Ryan Walker, executive vice president of Heritage Action for America.
“Biden’s latest debt transfer gimmick is an illegal, unfair election year stunt that is backfiring — and should cost him at the ballot box,” Walker said.

Almost half of all voters — 48% — say canceling student debt is an important issue to them in the 2024 presidential and congressional elections, according to a recent survey from SocialSphere, a research and consulting firm. It polled 3,812 registered voters, including 2,601 Gen Z and millennial respondents, between March 15-19.
Additionally, 70% of Gen Z respondents said the action was “very” or “somewhat” important in the election, while 72% of Black voters surveyed and 68% of Hispanic voters believe the same.
Many young conservatives also support student loan cancellation, with 49% of Gen Z and millennial Republicans surveyed saying some or all outstanding education debt should be erased.
As president, Trump called for the elimination of the U.S. Department of Education’s existing loan relief programs, including the popular Public Service Loan Forgiveness initiative. He also wanted to slash the department’s budget, and his administration halted a regulation aimed at providing loan forgiveness to those defrauded by their schools.
Now, as he runs for president again, Trump seems poised to make even deeper cuts to financial aid programs for students. He has repeatedly attacked Biden’s loan relief policies, and he said in a campaign video in late 2023 that he wants to close the Education Department altogether.

Republicans may try again to stop relief plan

Ever since the U.S. Supreme Court rejected Biden’s first attempt at wide-scale loan cancellation last summer, his administration has been working on its do-over plan. While the Education Department attempted to make the relief more targeted this time in an effort to increase its chances of survival, up to 20 million people still stand to benefit.
For critics of broad student loan forgiveness, Biden’s new plan looks a lot like his first.
After Biden touted his revised relief program, Missouri Attorney General Andrew Bailey, a Republican, wrote on X that the president “is trying to unabashedly eclipse the Constitution.”
“See you in court,” Bailey wrote.
Missouri was one of the six Republican-led states — along with Arkansas, Iowa, Kansas, Nebraska and South Carolina — to bring a lawsuit against Biden’s first sweeping debt relief effort.

The red states argued that the president overstepped his authority, and that debt cancellation would hurt the bottom lines of lenders. The conservative Supreme Court justices agreed with them.
Once the Biden administration publishes its new student loan forgiveness plan in October, more legal challenges are inevitable, Kantrowitz said.
“Lawsuits seeking to block the final rule will follow soon after it is published,” he said.
A recent Supreme Court ruling could also make it harder for Biden’s revised plan to survive those broadsides.
The high court in late June overruled the so-called Chevron doctrine, a 40-year-old precedent that required judges to defer to a federal agency’s interpretation of disputed laws. The 6-3 ruling, which split the conservative-majority court along ideological lines, is expected to undermine the federal government’s regulatory power.

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Today, 46% of Gen Zers rely on financial assistance from their family, according to a new report from Bank of America.
Inflation’s recent runup and specific challenges related to housing costs and college affordability are largely to blame.

To keep up with the high cost of living, many young adults turn to a likely safety net: their parents.
Nearly half, or 46%, of Gen Zers between the ages of 18 and 27 rely on financial assistance from their family, according to a new report from Bank of America.

Even more — 52% — said they don’t make enough money to live the life they want and cite day-to-day expenses as a top barrier to their financial success.
“The high cost of living is certainly impacting Gen Z,” said Holly O’Neill, president of retail banking at Bank of America.
The financial institution polled more than 1,000 Gen Z adults in April and May.

Why times are so tough for Generation Z

Many consumers feel strained by higher prices — most notably for food, gas and housing. However, those just starting out face additional financial challenges.
Not only are their wages lower than their parents’ earnings when they were in their 20s and 30s, after adjusting for inflation, but they are also carrying larger student loan balances.

Even compared with millennials, Gen Zers are spending significantly more on necessities than young adults did a decade ago, other reports show.
They also have the debt to prove it. Roughly 15% of Gen Zers have maxed out their credit cards and are at risk of falling behind on payments, more so than any other generation, the New York Fed reported in May. 
“What delinquency rates are showing is that there is increased stress among some segments of the population,” the New York Fed researchers said at the time.

‘The high cost of housing definitely is a barrier’

In the years since the Covid pandemic, homeownership has been one of the greatest tools of wealth creation — and those who have been priced out of the housing market have disproportionately struggled to achieve the same level of financial security, according to Brett House, economics professor at Columbia Business School.
“That is a massive challenge for wealth accumulation among Gen Z,” he said.
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Second only to food and groceries, housing is the expense most young adults today need help with, Bank of America also found.
“The high cost of housing definitely is a barrier for them,” O’Neill said. “We also found that the majority of Gen Z don’t pay for their own housing.”
Experts recommend spending no more than 30% of your take-home pay on shelter, but many young adults covering their own expenses are shelling out far more. Two-thirds of those Bank of America surveyed said they put more than 30% of their paycheck toward housing, and nearly a quarter spend upwards of 50%.
O’Neill said she advises her own Gen Z children to adhere to the 50-30-20 rule, which recommends putting 50% of a paycheck toward necessities, including food, housing and transportation, 30% to discretionary spending and the remaining 20% into savings.

Fewer Americans feel financially comfortable overall

But it’s not just Gen Z struggling. Most Americans believe they don’t earn enough to live the life they want these days, according to a separate survey, by Bankrate.
Just 25% of all adults in the survey said they are completely financially secure, down from 28% in 2023, the report said.

The survey respondents said they would need to earn $186,000 on average to live comfortably, Bankrate found. But to feel rich, they would need to earn a bit more than half a million a year, or $520,000, on average, the survey found.
Similarly, inflation’s recent runup and specific challenges related to housing costs and college affordability were significant obstacles to achieving financial security, according to Bankrate.
“Many Americans are stuck somewhere between continued sticker shock from elevated prices, a lack of income gains and a feeling that their hopes and dreams are out of touch with their financial capabilities,” said Mark Hamrick, Bankrate’s senior economic analyst.
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Inflation is slowing down, but prices are still high — and that has put many Americans under financial stress.
As consumers lean on their credit cards, more borrowers are also falling behind on their payments, recent reports show.

Inflation is slowing down, but prices are still high — and likely to stay that way.
That’s generally considered good news. The economy is expanding amid a lower rate of price growth and a strong job market.

However, even a broad pullback in price increases underscores another bitter reality: We’re still paying more for many goods and services with little relief in sight.
“Cooling inflation is not the same as a substantial reduction in prices,” said Mark Hamrick, senior economic analyst at Bankrate. “Elevated prices have largely persisted, which means that Americans continue to face affordability challenges on a range of things both necessary and discretionary, including homes, vehicles, car insurance, food, electricity and travel.”
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Indeed, the rate of price increases for food has subsided.
Monthly “food at home” inflation has been near 0% for the past four months, according to the latest government inflation data. U.S. gasoline prices fell 3.6% in the month from April to May and even housing inflation is down from its peak over one year ago.

And yet, because in most cases price increases are only slowing — not falling outright — consumers are still seeing their monthly costs rise, especially when it comes to essentials like food, utilities and rent.
On average, 61% of Americans report spending more on groceries and dining out compared to a year ago, according to a recent Wealth Watch survey by New York Life. Costs in those categories rose $209.45 a month on average. Further, 56% of adults said they now spend an average $161.45 more a month on utilities and 48% said rent costs an average $302.94 more a month, New York Life found.
The insurance company polled 2,002 adults in late May.

‘The toll inflation is taking on Americans’ finances’

“We can see the toll inflation is taking on Americans’ finances, as they report higher costs of living on everyday expenses and report lower levels of financial confidence,” said Donn Froshiesar, New York Life’s head of consumer insights.
As more households stretch to cover the increased prices and higher interest rates, there are new indications of financial strain.
“From filling up a tank of gas to making a rental payment to buying groceries, most consumers are paying more today for everyday expenses than they ever have,” Charlie Wise, senior vice president and head of global research and consulting at TransUnion, recently told CNBC.
“And if they’re using a credit card to make these purchases, their interest rates are at much higher levels, so costs also are rising for those consumers carrying a balance,” Wise said.

As a result, more consumers are falling behind on their payments. Over the last year, roughly 8.9% of credit card balances transitioned into delinquency, the New York Fed reported in May. And more middle-income households anticipate struggling with debt payments in the coming months.  
“We’ve gone from an environment where inflation was the focus, and the impact of rising prices has resulted in an affordability crisis, which is now front and center,” Bankrate’s Hamrick said.
However, “if prices continue to normalize and the job market remains stable, further progress can be clawed back on the affordability front,” he added.

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A Roth conversion ladder is a multiyear strategy to transfer pretax funds to a Roth IRA to kickstart future tax-free growth.
You’ll owe upfront levies on the converted balance, but there is no 10% early withdrawal penalty after five years.
However, tapping the conversions after only five years could forgo future tax-free growth.

Svetikd | E+ | Getty Images

Roth individual retirement account conversions are a popular way to reduce future levies on pretax 401(k) or IRA withdrawals — and you can smooth out the upfront tax hit with a “Roth conversion ladder,” experts say.
Roth conversions transfer pretax or nondeductible IRA money to a Roth IRA, which offers future tax-free growth. The trade-off is regular income taxes incurred that year on the converted balance.

By comparison, a Roth conversion ladder is a series of conversions over multiple years, meaning “you’re paying taxes in smaller increments,” said certified financial planner Preston Cherry, founder and president of Concurrent Financial Planning in Green Bay, Wisconsin.
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Roth conversion ladders are a “strategic and tactical approach” involving years of tax projections, including future withdrawals, said Ashton Lawrence, CFP and director at Mariner Wealth Advisors in Greenville, South Carolina.
For example, rather than converting $200,000 from pretax to Roth in a single year, you may break that into chunks over several years, depending on your income. Of course, boosting your adjusted gross income any year can trigger other tax consequences, such as phaseouts for certain tax breaks.
“It’s not a one-time planning engagement” because you need to revisit the planned conversions every year and adjust as needed, Lawrence said.

‘Unlock’ your retirement funds early

Similar to regular Roth conversions, one of the key benefits of the conversion ladder is tax-free “compounded growth on future gains,” said Cherry, who is a member of CNBC’s Financial Advisor Council.
But the strategy is also popular for early retirees who want to tap retirement funds before age 59½ without penalty, he said.
Although you can access Roth IRA contributions anytime, there’s generally a 10% early withdrawal penalty on earnings before age 59½, with some exceptions.
However, you can tap Roth conversions without the 10% penalty or taxes after five years to “unlock some of your money early,” Cherry said. But a separate five-year period applies to each conversion.
There’s also a five-year aging rule for Roth IRA accounts, which requires the account to be open for at least that long to avoid taxes or penalties, even after age 59½.

While tapping your converted IRA balance after five years could be appealing for early retirees under age 59½, you will forgo future tax-free growth, Lawrence said.
Typically, more time for compound growth makes Roth conversions more beneficial, and you’ll want to make sure you break even on the upfront taxes before tapping the account, he said.

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