Markus Andrews

Some employer-sponsored plans such as 401(k)s allow you to make contributions on either a pretax or a Roth basis.
Unlike contributions to traditional 401(k) accounts, those to a Roth 401(k) are made with after-tax dollars.
Here’s a look at the pros and cons of incorporating a Roth 401(k) into your retirement plan.

Jose Luis Pelaez Inc | Digitalvision | Getty Images

There are a lot of opportunities to minimize your tax burden when it comes to retirement planning. Of course, making the most of tax-advantaged accounts is a key aspect of any retirement strategy.
Some employer-sponsored plans such as 401(k)s allow you to make contributions on either a pretax or a Roth basis. Unlike contributions to traditional 401(k) accounts, those to a Roth 401(k) are made with post-tax dollars.

This means that the money you contribute has already been taxed, so there are no immediate tax deductions. The upside is that qualified withdrawals from a Roth 401(k), including both contributions and earnings, are entirely tax-free in retirement if you meet certain criteria.

More from Your Money:

Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

Let’s cover the basics.
Like traditional 401(k) accounts, in 2023 you can contribute to a Roth 401(k) up to $22,500 if you’re under age 50, and up to $30,000 with catch-up contributions if you’re over 50.
Roth 401(k) contributions are not subject to income limitations that Roth individual retirement accounts, or IRAs, currently have. For people approaching retirement, this can be a really appealing strategy to max out their retirement savings.
Pre-retirees might experience some lower-income years between retirement and when required minimum distributions kick in at age 72, especially if you might be downshifting hours or working part-time.

It makes sense during those periods to make Roth contributions or convert funds from pretax to Roth while in a lower tax bracket. A Roth 401(k) allows a much higher contribution limit to accomplish that than a Roth IRA.

Now, let’s examine the pros and cons of incorporating a Roth 401(k) into your retirement plan:

The pros

Tax-free withdrawals in retirement: The most significant advantage of a Roth 401(k) is that withdrawals made during retirement are entirely tax-free. This means you can allow your investments to potentially grow tax-free for as long as you wish, giving you greater flexibility in managing your retirement income. By having a tax-free source of income you can potentially reduce your overall tax burden in retirement, especially if you anticipate being in a higher tax bracket. This can be a game changer when it comes to managing your cash flow in retirement.
Diversification of tax liability: Having both traditional 401(k) and Roth 401(k) accounts provides diversification in terms of your tax liability. This can be particularly valuable in uncertain tax environments. When you retire, you can strategically choose which account to withdraw from based on your tax situation at the time. Withdrawals from a Roth 401(k) for instance, would not increase your modified adjusted gross income, which would maintain eligibility for programs such as the Premium Tax Credit, if you retire before meeting age criteria for Medicare.
Flexibility in contributions: Roth 401(k) accounts allow for more flexibility in contributions. You can contribute to both a traditional and a Roth 401(k) account simultaneously, as long as you stay within the IRS contribution limits. And unlike Roth IRAs, contributions to a Roth 401(k) are not subject to income limitations, allowing you to better structure your tax liabilities and control your taxable retirement income.

The cons

No immediate tax deduction: Contributions to a Roth 401(k) are made with after-tax dollars, which means you won’t receive an immediate tax deduction. If you’re in a higher tax bracket now and expect to be in a lower one during retirement, this could be a disadvantage.
Complex decision-making: Managing both traditional and Roth 401(k) accounts requires careful planning. Deciding how much to allocate to each account can be a complex decision that depends on your current tax situation, your retirement goals and your investment strategy. To fully maximize the Roth 401(k), you must have a five-tax-year period of participation to avoid nonqualified distributions and you must wait until at least age 59½ to begin those distributions. Unlike with a Roth IRA, a major limitation is that you cannot make tax-free withdrawals from your account at any time without meeting those two conditions, or criteria around death or disability. The same restrictions that apply to pretax contributions also apply here, which can “lock up” your after-tax dollars and complicate your financial situation.
Uncertainty in tax policy: The tax benefits of a Roth 401(k) are contingent on tax laws remaining unchanged. Tax policy can fluctuate over time, which could affect the future benefits of your Roth account. While tax-free withdrawals are a compelling feature, they are not guaranteed to last indefinitely. We saw this with the legislative discussions around eliminating the backdoor Roth IRA loophole in 2021.

Ultimately, the decision may come down to your current and projected future tax situation. Many financial advisors recommend a balanced approach, combining both traditional and Roth 401(k) accounts to maximize flexibility in retirement income planning.
To make an informed decision, consult with a financial professional who can assess your specific circumstances and help you create a retirement strategy that aligns with your financial objectives and minimizes your tax liability. Remember that there is no one-size-fits-all answer when it comes to retirement planning, and your choice should reflect your individual financial needs and goals.
— By Jude Boudreaux, certified financial planner, partner and senior financial planner with The Planning Center in New Orleans. He is also a member of the CNBC FA Council. More

Your Money

While caregiving can be financially, emotionally stressful, Latino caregivers often experience higher financial strain, an AARP report found.
“It’s just not a Latin thing to drop your parents or siblings off in an assisted living facility, it’s not in our culture,” said certified financial planner Marianela Collado.

Jose Luis Pelaez, Inc. | Getty Images

Caregiving can require a significant investment of time and money, no matter your background, but Latino caregivers — particularly Latinas — tend to have more burdensome expenses.

Lea este artículo en español aquí.

It’s worth being aware of those financial effects, experts say, because caregiving is an important touchstone in Latino culture. It’s expected for family members to step in when someone needs help. 

“It’s just not a Latin thing to drop your parents or siblings off in an assisted living facility, it’s not in our culture,” said Plantation, Florida-based certified financial planner Marianela Collado. “It’s a given that someone is going to take care of grandma or grandpa.”

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

While it may be part of the cultural fabric to take family members under your care, it’s important to make sure that you take the necessary steps to set yourself up before the financial commitment occurs.
“That’s your typical Latino thing: You’re not looking for a home for them, you’re looking for which family member is going to move in and take care of them,” added CFP Louis Barajas, CEO of International Private Wealth Advisors in Irvine, California.

Latino caregivers have high financial strain

Family caregivers spend on average 26% of their annual income on caregiving activities, according to a 2021 report by AARP. The organization calls that measure “financial strain,” and bases it on the caregiving expenses relative to a caregiver’s annual income.
Compared to other races and ethnicities, Hispanic and Latino caregivers have the highest financial strain, AARP found, with caregiving expenses that account for 47% of annual income. Broken down by gender, Hispanic and Latina women have financial strain of 56% — more than twice the overall caregiver average and the highest across all racial and ethnic groups and genders — while Hispanic and Latino men come in second at 38%, AARP found.

Hispanic caregivers are likely to report more financial impacts from caregiving than non-Hispanic whites, an earlier AARP report found. Those consequences might include leaving bills unpaid or paid late, moving to a less expensive area or difficulty affording basic expenses like food. What’s more, Hispanic caregivers are more likely than non-Hispanic whites to have their work affected by caregiving, such as a need to leave work early, arrive late or take time off to provide care.While disappointing, information like this is important, and can serve as a wake-up call for all parties involved. Here are a few financial strategies to better position yourself as a caregiver:

1. Explore claiming your family member as a dependent

There can be financial advantages to claiming a family member you are caring for as a dependent on your tax returns. It’s a strategy you might employ in the U.S., or for a relative you’re sending money to abroad. U.S. residents who routinely send money to family members in Mexico, for instance, may be able to claim them as dependents in their taxes under a treaty between the U.S., Mexico and Canada, said Barajas, a member of the CNBC FA Council.
In order to qualify as a dependent, the family member must meet specific qualifications around their income and their relation to you, said Collado, the CEO and co-founder of Tobias Financial Advisors. Additionally, you must prove that you provide more than half of the person’s financial support for basic expenses.
Claiming your family member as a dependent can also open the door to deduct some of their medical expenses, as long as you meet specific criteria, Collado said.
“Make sure you’re paying those institutions directly, such as doctors or hospitals,” she said.

2. Look into local or state assistance programs 

Some government programs pay a relative to care for an elderly or incapacitated family member, said Roberto and Amanda Corral of California-based special needs planning firm Corral Financial Strategies.
For instance, California offers in-home support services or IHSS, where a qualifying care provider can be paid for caregiving, explained Roberto Corral.
Primary caregivers may also consider respite programs, which pay an outside or secondary caregiver a set amount of hours a month to relieve labor from the primary caregiver.
“It doesn’t give money back to their pocket but it helps with the emotional load,” said Amanda Corral.

Further, if your loved one is eligible for Medicaid, depending on the state, there is a chance a family member can be paid for their caregiving services.
Find out if your loved one qualifies for a Medicaid long-term care program that pays family members. If they are a U.S. veteran, they may qualify for the Veteran Directed Care Program.

3. Build up your own financial safety nets

If you’re a young worker and you anticipate taking care of a family member in the future, now is the time to get your own finances in order. Start by paying down high-rate debt, and install financial safeguards by investing in long-term goals like retirement.
You also should build up your emergency fund to weather unexpected expenses for yourself as well as those you will eventually be caring for. Consider financial products like high yields savings accounts, which keep your money readily available, Collado said.
If you’re the main breadwinner of the family, it will be important to think about things such as disability insurance that help protect that income if you have a medical condition that leaves you unable to work.”Disability insurance can soften the blow because, depending on the policy, you can get partial income,” Amanda Corral said. More

Michael Wirth, CEO of Chevron.
Adam Jeffery | CNBC

Dividend-paying stocks can help enhance portfolio returns, but investors will need to perform their due diligence as they sift through the names.
Investors should carefully assess these companies by paying attention to various factors, including the dividend growth rate and the ability to consistently generate sufficient cash flows to support payments.

Bearing that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Public Service Enterprise Group

First on this week’s dividend list is Public Service Enterprise Group (PEG), one of the leading electric and gas companies in the U.S. Last month, PEG reaffirmed its full-year earnings guidance, as the company expects growth in regulated operations, the realization of higher average hedged prices and its cost control efforts to offset the impact of higher interest rates and lower pension income.
Earlier this year, PEG increased its quarterly dividend by 5.6% to 57 cents per share (annualized dividend of $2.28), marking the 19th annual increase for the company. PEG’s dividend yield is 3.8%.
RBC Capital analyst Shelby Tucker highlighted that PEG’s subsidiary Public Service Electric and Gas (PSE&G), which is a franchised public utility in New Jersey, enjoys solid cash flows from the nuclear assets in its power generation business.
While the company faces cost and pension expense headwinds this year, the analyst expects a 6% EPS compound annual growth rate through 2027 and 5.5% annual dividend growth.

“We believe the primary attraction to PEG is a strong pipeline of electric and gas investments in New Jersey with low equity dilution risk,” said Tucker.
Tucker reiterated a buy rating on PEG while slightly lowering the price target to $69 from $70. He ranks No. 305 among more than 8,500 analysts tracked by TipRanks. Tucker’s ratings have been profitable 63% of the time, with each rating delivering a return of 9%, on average. (See PEG’s Insider Trading Activity on TipRanks)

Southern Company

Tucker is also bullish on Southern Company (SO), a gas and electric utility giant. Earlier this month, the analyst called SO a “quality utility operating in constructive regulatory environments.” He reiterated a buy rating on the stock and increased the price target to $80 from $78.
With the company’s much-delayed Vogtle nuclear project’s commercial operation date on the horizon, the analyst thinks that investors are finally hopeful of better times ahead. The company expects its Vogtle Unit 4 to be placed in service during late fourth quarter of 2023 or the first quarter of 2024.
The analyst sees the possibility of SO commanding a premium compared to its peers as the year progresses and heads into 2024. Post-Vogtle, Tucker expects the company to accelerate its EPS growth and use the higher cash flows to boost dividends.
Note that in April, Southern announced a 2.9% increase in its quarterly dividend to $0.70. This is the 22nd consecutive year in which SO has raised its dividend. SO offers a dividend yield of 4%.  
“We note that SO’s utilities mostly operate in strong economic environments, which should support investment opportunities throughout the decade,” said Tucker. (See Southern Company Stock Chart on TipRanks)

Chevron

Next up is dividend aristocrat Chevron (CVX). In January, the oil and gas giant increased its quarterly dividend by about 6% to $1.51 per share, making 2023 the 36th straight year with a higher dividend payment. CVX’s dividend yield stands at 3.6%.
On Sept. 13, Goldman Sachs hosted roundtable discussions with Chevron’s senior management. Analyst Neil Mehta said that the firm remains bullish on CVX due to its peer-leading capital returns profile, inflecting upstream operations expected in 2025 supported by higher Tengiz/Permian volumes and relative valuation.
The analyst contends that near-term pressures like risks around the Tengiz project are largely reflected in CVX’s valuation. He highlighted management’s constructive view on the upstream business, reaffirming nearly 3% CAGR forecast for production over the next five years.
“The company reiterated its commitment to competitive shareholder returns, which we believe is a core differentiating factor for CVX over the next few years,” added Mehta, who ranks No. 181 among more than 8,500 analysts on TipRanks. 
The analyst currently expects about a 9% capital return yield in 2024/2025, higher than the U.S. energy majors peer average of about 7%. Overall, Mehta reiterated a buy rating on Chevron with a price target of $187.
Mehta’s ratings have been successful 67% of the time, with each rating delivering an average return of 13%. (See Chevron Hedge Fund Trading Activity on TipRanks)

Broadcom

Semiconductor company Broadcom (AVGO) managed to beat the Street’s fiscal third-quarter estimates. However, investors seemed unsatisfied as the quarterly outlook was in line with the analysts’ expectations, unlike that of chip giant Nvidia (NVDA), which crushed estimates on artificial intelligence tailwinds.
Broadcom generated $4.6 billion in free cash flow in the fiscal third quarter of 2023. It paid a cash dividend worth $1.9 billion in the quarter and repurchased 2.4 million shares.
Earlier, AVGO increased its quarterly dividend for fiscal 2023 by 12% to $4.60 per share (annualized $18.40). This hike reflected the company’s twelfth consecutive increase in annual dividends since it initiated dividends in fiscal 2011. It offers a dividend yield of 2.2%
Baird analyst Tristan Gerra recently reiterated a buy rating on AVGO stock while boosting the price target to $1,000 from $900 to reflect solid growth opportunities, mainly in the company’s custom application-specific integrated circuit (ASIC) business for AI applications. Gerra also noted that the company’s free cash flow remains strong.
The analyst said that recent channel checks revealed a surge in Broadcom’s custom ASIC business to over 2 million units for next year, which was more than 2.5 times his unit base expectation for 2023. He added that generative AI investments are accounting for nearly all the growth in Broadcom’s semiconductor business, with AI-related revenue now exceeding $1 billion.
Gerra holds the 514th position among more than 8,500 analysts tracked on TipRanks. Moreover, 54% of his ratings have been profitable, with each generating an average return of 8.7%. (See Broadcom’s Financial Statements on TipRanks)

Bristol-Myers Squibb

We end this week’s list with biopharmaceutical company Bristol-Myers Squibb (BMY). The company repurchased 17 million shares for $1.2 billion and made dividend payments of $2.4 billion in the first six months, ended June 30.
The quarterly dividend of $0.57 per share for 2023 indicates a 5.6% year-over-year increase, marking the 14th consecutive year of dividend hikes. BMY’s dividend yield stands at 3.9%.
Following the company’s Research and Development (R&D) Day held in New York on Sept. 14, Goldman Sachs analyst Chris Shibutani reaffirmed a buy rating on BMY stock with a price target of $81.
At the event, management highlighted how new product launches and the acceleration of research and development productivity would drive future revenue growth, addressing concerns about the Inflation Reduction Act and loss of exclusivity of key drugs.
Shibutani noted that management expressed continued confidence in the 2030 new product launch revenue goal of more than $25 billion (non-risk adjusted), based on currently visible late-stage and already commercializing opportunities.
Commenting on BMY’s capital allocation program, Shibutani said that management’s priority remains business development (BD). “Beyond BD, the company remains committed to growing its dividend and will continue to be opportunistic with share buybacks,” the analyst added.
Shibutani holds the 271th position among more than 8,500 analysts tracked on TipRanks. In all, 44% of his ratings have been profitable, with each generating an average return of 20.5%. (See BMY Options Activity on TipRanks) More

The IRS has unveiled plans to crack down on tax preparers with “questionable practices.”
This news comes amid heightened scrutiny of a popular small business tax credit.
The agency’s research suggests “bad actors” may disproportionally file tax returns for “vulnerable filers,” which may contribute to higher audit rates.
“I think it’s something that [the IRS] definitely needs to make a high priority,” said enrolled agent Josh Youngblood, owner of The Youngblood Group.

IRS Commissioner Daniel Werfel testifies before the Senate Finance Committee on April 19, 2023.
Chip Somodevilla | Getty Images

IRS scrutiny of the employee retention credit

The plan is part of the agency’s elevated focus on employee retention credit claims, according to April Walker, lead manager for tax practice and ethics with the American Institute of CPAs.
A pandemic-era tax break, the employee retention credit, or ERC, was designed to support small businesses that kept employees on payroll during shutdowns or revenue declines in 2020 and 2021.

Worth thousands per employee, the program sparked a cottage industry of specialist firms pushing businesses to amend payroll returns to claim the complicated tax break.
Roughly one week ago, the IRS announced plans to halt processing for the popular credit amid a “surge of questionable claims,” a move that the AICPA applauded. The processing pause for new claims will last at least through the end of 2023.

IRS shifting enforcement to higher earners

Meanwhile, the agency has also announced plans to reduce the number of audits on lower-income filers, while targeting unpaid taxes from higher earners, partnerships and large corporations.
In the same letter, Werfel shared IRS plans to “substantially” decrease the volume of so-called correspondence audits, or exams conducted by mail, for certain credits. He included the earned income tax credit, a tax break claimed by low- to moderate-income filers, which has been prone to mistakes due to complex eligibility requirements.

It’s long been recognized that correspondence audits have a lot of problems.

Chuck Marr
Vice president for federal tax policy at the Center on Budget and Policy Priorities

“It’s long been recognized that correspondence audits have a lot of problems,” said Chuck Marr, vice president for federal tax policy at the Center on Budget and Policy Priorities, noting that many filers don’t receive or understand the notices.
During fiscal year 2020, more than $16 billion of the credit was claimed improperly — over one-quarter of the total paid — according to the National Taxpayer Advocate’s 2022 report to Congress.
While IRS audit rates have dropped overall, the rates have declined more slowly for filers claiming the earned income tax credit than higher earners. “The IRS audits a higher percentage of taxpayers with the earned income tax credit than any other taxpayers, except those with at least $5 million of total positive income,” National Taxpayer Advocate Erin Collins wrote in her 2022 report.

‘Bad actors’ target tax returns for ‘vulnerable filers’

The agency’s research suggests “bad actors” may disproportionally file tax returns for “vulnerable filers,” such as lower earners, filers of color or those with limited English proficiency, according to Werfel’s letter. He said this may contribute to higher audit rates for these filers.
The IRS in May said Black Americans are significantly more likely to face an audit, confirming findings published by economists from Stanford University, the University of Michigan, the U.S. Department of the Treasury and the University of Chicago.
“Over time, we believe stepped-up efforts to stop unscrupulous preparers that target this population, will lead to higher quality tax preparation and increased return accuracy, thereby reducing the number of individual taxpayers at risk of audit,” Werfel wrote. More

Delta Air Lines is giving employees up to $1,000 to boost their emergency savings — and more than 90,000 workers are eligible.
Other companies, including Best Buy, Levi’s and Starbucks, have also introduced an emergency-savings benefit.
The ability to reduce financial stress and boost productivity will encourage many more employers to follow suit, according to John Hope Bryant, chairman and CEO of Operation Hope.

Between inflation and economic instability, Americans have depleted most of what they had in their savings accounts.
More than half of all Americans now live paycheck to paycheck and most adults — 57% — cannot afford a $1,000 emergency expense, a Bankrate survey from earlier this year found.

Meanwhile, experts say having a cash reserve is key and can prevent workers from turning to high-interest credit cards or taking hardship withdrawals from their retirement accounts.
To address the savings crisis, a growing number of employers are stepping in.
Already, Delta Air Lines, Starbucks, Best Buy and Levi’s, among others, have introduced some type of emergency-savings benefit, many as a result of the new retirement legislation in Secure 2.0 — a law enacted in December that focuses on improving retirement security by making it easier for workers to build and access emergency cash.
More from Personal Finance:Credit card rates are practically in ‘loan shark’ territory3 money moves millionaires are more likely to makeMoney market funds vs. high-yield savings accounts
“The legislation has definitely started more conversations,” said Katie Taylor, vice president of planning and engagement at Fidelity Investments.

“The ability for an employer to help their employees to feel they have solutions in place to manage their overall finances is really important,” Taylor said.

Delta is offering workers up to $1,000

Delta Air Lines planes at Hartsfield-Jackson Atlanta International Airport.
Jeff Greenberg | Universal Images Group | Getty Images

Under Delta’s emergency savings program, which is available to all employees below the director level, workers receive $750 directly deposited into a Fidelity account after completing one financial coaching session.
The airline will then match up to $250 of an employee’s contributions made with payroll deductions to that account for a total of $1,000.
“Financial literacy is the civil rights issue of this generation,” said John Hope Bryant, chairman and CEO of Operation Hope, a nonprofit that worked in partnership with Delta and Fidelity Investments.
“It’s as important as the right to vote,” he said. “It’s the lifeblood to being able to operate a dignified life.”
The pandemic underscored how valuable these programs could be.
When the economy stalled, Delta workers tapped roughly $1 billion in hardship withdrawals from their retirement accounts, Bryant said.
“People were suffering quietly,” he said.
Delta recently expanded the initiative globally, making more than 90,000 employees eligible. So far, more than 33,000 workers are participating, according to the company.

“I didn’t have a strategy in place on how to save money,” said Loretta Day, a Delta flight attendant based in Atlanta. “If I got an email that said there was a sale on candles, it was disrespectful not to take advantage of the sale.”
But it didn’t take long for Day, 51, to practice better money habits once she completed a financial education class, she said.
“It made me think about everything I’m spending money on that I already have at home,” Day said.
Since then, Day paid off her credit card debt and has started putting one paycheck a month toward savings. She still buys the occasional candle, she said, but she has a bigger purchase in mind: Owning her own home.
“I’ve given myself a year,” she said. “I feel confident now that when I’m ready to retire, I’ll be in a better place than I was.”

“At the end of the day, we believe investing in our people is good for our customers and our shareholders,” said Kelley Elliott, vice president of Delta’s total rewards program.
Employees who are financially well are 10 times more likely to be focused at work than employees who are not, added Fidelity’s Taylor.
“There is a notable benefit to employers too,” she said.

‘Emergency savings is the new health insurance’

The ability to reduce financial stress and boost productivity will encourage many more companies to follow suit, according to Bryant.
“Financial literacy coaching and counseling tied to emergency savings is the new health insurance — this is what every company will be doing in the next decade,” he said.
With the additional support, workers “are going to come in earlier, stay longer and go the extra mile,” Bryant added. “It’s actually cheaper to treat your people better — that’s why it’s going to be sustainable.”

If your employer is offering you something akin to free money, take it.

Douglas Boneparth
president and founder of Bone Fide Wealth

“If your employer is offering you something akin to free money, take it,” said Douglas Boneparth, a certified financial planner and president and founder of Bone Fide Wealth, a wealth management firm based in New York. “That’s always going to be beneficial.”
“However, if it’s not being paired with an appropriate amount of discipline, it doesn’t matter,” added Boneparth, who is a member of CNBC’s FA Council.
Above all else, use this as an opportunity to make the most of the financial education being offered, he advised.
Subscribe to CNBC on YouTube. More

The “summer of strikes” needs a new name — there is no sign of a slowdown in workers walking off the job.
Some 362,000 workers have gone on strike so far in 2023, compared with 36,600 over the same period two years ago.

Bloomberg | Bloomberg | Getty Images

The “summer of strikes” needs a new name — there is no sign of a slowdown in workers walking off the job.
Some 362,000 workers have gone on strike so far in 2023, compared with 36,600 over the same period two years ago, according to data by Johnnie Kallas, a Ph.D. candidate at Cornell University’s School of Industrial and Labor Relations, and the project director of the ILR Labor Action Tracker.

“We have found that many workers are increasingly frustrated with decadeslong rising income inequality,” Kallas said.
If the United Auto Workers’ work stoppages expand to include most, or all, of the 150,000 workers who could strike, “then 2023 could end up being the highest since 1986,” Kallas said.

Employees who withhold their labor can face a number of consequences, including losing their job and health insurance, experts said. As a result, they should learn what protections may be available to them.
“Strikes are a powerful tool for exercising power, but because our labor law is so weak it comes with great risk for workers,” Sharon Block, a professor at Harvard Law School and the executive director of the Center for Labor and a Just Economy, said in a previous interview with CNBC.
Here’s what to know.

Many, but not all, workers have the right to strike

The National Labor Relations Act of 1935 codified the right to strike into law. As a result, all workers covered by the NLRA can participate in lawful strikes, Block said.
What is a lawful strike?
The National Labor Relations Board defines two classes of lawful strikers: those protesting unfair labor practices at their workplace and those who are fighting its economic conditions.
“If workers are standing together in a strike for better wages and working conditions, they should feel confident that their strike is protected,” Block said.
That includes workers who are not in unions, she added, “as long as they act collectively.”

That last part is important.
“Strikes have to be ‘collective action’ to be protected,” Kenneth Dau-Schmidt, a law professor at Indiana University Bloomington, told CNBC earlier this year. “Generally, that means you have to do it as a group.”
Two people can constitute a group, he said, but “the larger, the better.”
Even then, there are exceptions.
Those in the private sector covered by the Railway Labor Act, which includes most railway and airline employees, are subject to that law rather than the NLRA.

“Workers covered by the Railway Labor Act are also allowed to strike, but there are many more obstacles and procedures for them to get through before they can strike,” Dau-Schmidt said.
“The RLA system is set up to facilitate mediation and presidential or congressional intervention before a strike, so big railway strikes are rare,” he added.
Most government employees are prohibited from striking in the U.S. Only a handful of states — about eight — have passed their own laws permitting certain public sector workers to strike.
Meanwhile, Dau-Schmidt said: “No state allows police or firefighters to strike.”

Job security at risk for strikers

Under the NLRA, workers can’t be fired or discriminated against for participating in a strike.
However, economic strikers can be permanently replaced if their employer hires someone else to do their job, Dau-Schmidt said. “Permanent replacement looks a lot like firing from the employees’ perspective,” he said.
If a striker’s replacement leaves the job for whatever reason, the worker who was on strike must be offered the position before anyone else is hired, though, Block said.

UPS reached a tentative agreement to renew a five-year labor contract with the Teamsters ahead of a July 31, 2023 deadline, averting a costly strike.
Bloomberg | Bloomberg | Getty Images

“Strikers just have to make an unconditional offer to return and wait for an opening,” she said.
If workers were on strike due to unfair labor practices, they may have a right to reinstatement, but that process, Dau-Schmidt said, “can often take a long time, and people often move on to other jobs.”
And employees “can never be sure their strike will be found to be an unfair labor practice strike,” he cautioned.

Pay and health insurance is ‘a real problem’

Workers who go on strike generally lose their wages, Dau-Schmidt said. “If you don’t work, you don’t get paid.”
Yet if the strike was over unfair labor practices, which was confirmed to be caused by violations of the law by their employer, they may qualify for back pay once the strike resolves, he added.

Strikes have to be ‘collective action’ to be protected. Generally, that means you have to do it as a group.

Kenneth Dau-Schmidt
law professor at Indiana University Bloomington

Economic strikers typically also get their other workplace benefits, including health insurance, nixed.
“Health insurance is a real problem,” Dau-Schmidt said. “Employers can suspend or end coverage.”
But, he said, “sometimes employers won’t kick employees off of the health insurance right away because it escalates the conflict and almost ensures an unhappy ending.”

Unemployment benefits for strikers

There is no federal law guaranteeing workers on strike jobless benefits. But two states — New York and New Jersey — provide some unemployment coverage to strikers.
There is also a bill working its way through the Massachusetts Legislature that would offer unemployment benefits to those who have been on strike over a labor dispute for 30 days or more. More

Regardless of the outcome, the United Auto Workers strike threatens to put pressure on already-high car prices.
Although anyone shopping for a new car won’t be immediately affected, expect discounting to decline and fewer incentives down the road, experts say.
For new cars, the average transaction price was $47,941 in August, near an all-time high, according to Edmunds.

Members of the United Auto Workers union hold a practice picket in front of Stellantis headquarters in Auburn Hills, Michigan, on Sept. 20, 2023.
Bill Pugliano | Getty Images

Regardless of the outcome, the United Auto Workers strike threatens to cause already-high car prices to escalate.
After the Big Three automakers — Ford, GM and Stellantis — failed to reach a deal on a new contract with the union, UAW-represented workers walked out of several assembly plants in Missouri, Michigan and Ohio, and warned it will strike additional plants at some, if not all, of the automakers at noon Friday.

More from Personal Finance:Buy holiday airfare in OctoberTruck buyers are driving up car payment costsWhy it’s hard to find a cheap new car these days
Up until this point, the strikes targeted only certain models, such as Ford’s midsize Ranger and the Jeep Gladiator, which are also not considered the best-selling vehicles, according to Ivan Drury, Edmunds’ director of insights.
“It’s a ‘chess not checkers’ mentality,” he said.
However, if the strike expands, or alternatively, if the striking autoworkers’ demands are met for a 40% pay raise along with other benefits, that could put pressure on automakers, dealers and, ultimately, car shoppers.
“It’s kind of a toss-up what’s going to happen,” Drury said.

Either way, consumers will pay more down the road, he added. “Inevitably yes, no matter what.”

Car shoppers won’t see an immediate effect

Buying a car was already expensive. Not only are new vehicle prices near an all-time high, but the interest rate to finance a purchase has also jumped dramatically.
For new cars, the average transaction price was $47,941 in August, near an all-time high, according to Edmunds.

For now, anyone shopping for a car won’t see an immediate effect from the strike, Drury said.
“There’s enough inventory on dealers’ lots,” he said.
Heading into the fall, vehicle supply had nearly stabilized, according to Cox Automotive, a source of auto industry information, although it is still low by historical standards.

The three automakers grew their inventories in August in anticipation of a potential standoff. They have about 50 to 60 days’ worth of inventory on hand, Cox Automotive said, up roughly 80% from a year ago.
This buffer may prevent dealers from feeling a significant effect, at least initially, according to separate data from Lotlinx, a dealership inventory management firm.

‘Dealers could see shortages within weeks’

In the longer term, “work stoppages ultimately lead to fewer vehicles built and lower inventory,” Cox Automotive Chief Economist Jonathan Smoke wrote in a blog post last week.
Discounts may decline as a result, depending on the model, Smoke noted.
“Ford only has 18 days’ supply of the popular Maverick pickup and 47 days of Broncos. Jeep only has 62 days of Grand Cherokees, and Chevy dealers are likely worried about their 28 days of Tahoes,” he wrote.
“If production of one of those products is disrupted, dealers could see shortages within weeks,” Smoke added.
With that in mind, consumers in the market for a car will likely find better deals now than later this fall.
“If you are thinking of making a purchase in October or November, you might as well do it now,” Drury said. With the added pressure from the strike, dealers are likely to pull back on incentives, including discounts on financing, he also noted.
“You are not going to find better deals later,” Drury explained.

Used car prices may be next to rise

Instead of getting a new car, buyers on a budget may find more value in purchasing a used car, experts often say. However, prices of wholesale used vehicles may have bottomed for the year, research shows.
“With potential new car production slowing, used car values have nowhere to go but up,” Drury said.
Subscribe to CNBC on YouTube. More

Social Security benefits are at risk for a “crisis” of cuts in the next decade.
Here’s what lawmakers say now about addressing the program’s funding woes.

Ascentxmedia | Istock | Getty Images

WASHINGTON — Millions of Americans look forward to claiming Social Security retirement benefits after years of paying into the program.
But Social Security beneficiaries face the possibility of an across-the board benefit cut of at least 20% in the next decade, due to a looming funding shortfall the program faces.

That can be changed if Congress decides to act before the projected 2034 depletion date for the program’s combined funds.
“You cut that 20%, that’s a crisis,” said Tony Vola, 76, a Social Security beneficiary and member of the AARP Iowa Executive Council. Vola spoke on Thursday during a Social Security forum in Washington, D.C., held by AARP, a nonprofit group representing people ages 50 and up.
“We’ve done our part; it’s time for Congress to do their part,” Vola said.
More from Personal Finance:Average Social Security benefit may grow by $57 per month in 202475% of people age 50 and up worry Social Security will run out of moneyBelieving these 5 Social Security myths may reduce your benefits
Social Security faces a shortfall between the income it receives through payroll taxes and the benefits it pays through monthly checks. The program’s trust funds help make up the difference.

But in the next decade those trust funds will dry up, projections show. Without that buffer, benefits would be immediately reduced.

Reform is unlikely before the presidential election

The headlines about the program’s funding woes may prompt Americans to suspect Congress is doing nothing to change the program’s situation.
Two top lawmakers who are working on Social Security reform proposals who spoke at AARP’s forum — Republican Sen. Bill Cassidy of Louisiana and Democratic Rep. John Larson of Connecticut — attributed the lack of action in part to stumbling blocks their proposals have met.
“It will not happen before the next presidential election, because President Biden has made it clear that he’s not going to act,” said Cassidy, who spoke first at the forum.

Republican Sen. Bill Cassidy of Louisiana speaks to the press on Capitol Hill on Feb. 10, 2021.
Nicholas Kamm | AFP | Getty Images

During his State of the Union address in February, Biden called for unanimity from both sides of the aisle to protect Social Security and Medicare.
But while Biden called out a proposal from Florida Republican Sen. Rick Scott that would sunset the program every five years, the president failed to mention a separate bipartisan plan he had been briefed on, said Cassidy, one of the lawmakers involved in that effort.
The White House did not immediately respond to a request for comment.
Meanwhile, Larson has put forward a bill, Social Security 2100, in four sessions of Congress to make benefits more generous. That enhancement would be paid for by increasing Social Security payroll taxes, as well as adding an additional net investment income tax, for taxpayers earning over $400,000.
The bill has had broad support among House Democrats, with 208 co-sponsors for a previous version of the proposal. Yet is has yet to make it to the House floor for a vote.
Recent hopes to advance the bill failed after Democrats worried Republicans would say they’re behind a massive tax increase, Larson said Thursday.
“People got nervous,” Larson said. “The bill was scheduled for a vote in the Ways and Means Committee and got pulled, much to my chagrin.”

How Social Security reform proposals would work

The two lawmakers’ proposals take different approaches to achieving long-term solvency to the program.
Cassidy wants to create a new Social Security fund by raising $1.5 trillion that would be invested in the stock market. This would be separate from Social Security’s existing trust funds, which are held in either cash or Treasury bonds.
The new fund would help the program keep up with inflation, which may run at 6% or 7% annually, while Treasury notes typically earn returns of just 1% to 4%, Cassidy said.
“All we’re doing is what every other 401(k), every other national pension plan does,” Cassidy said. “We invest in the strength of the economy as opposed to Treasuries, which are losing value every day.”
As the fund grows, it would ultimately address 70% of Social Security’s shortfall, Cassidy said. The remaining 30% would have to be resolved through bipartisan compromise.
Any changes to Social Security would require 60 votes in the Senate, and therefore would have to have agreement on from both parties.
Ultimately, that kind of compromise cannot happen without leadership from the top, according to Cassidy.
“We need a president to come up with the final language,” Cassidy said.

Rep. John Larson, D-Conn., speaks during an event to introduce legislation called the Social Security 2100 Act. which would increase increase benefits and strengthen the fund, on Capitol Hill on Jan. 30, 2019.
Mark Wilson | Getty Images News | Getty Images

Larson, who recently reintroduced his Social Security 2100 proposal, criticized one idea that has been floated to create study commissions to evaluate the program’s issues.
“There’s only two ways to go with this, you are either going to cut benefits or increase revenues,” Larson said. “You don’t need to study that.”
Larson’s bill would bring the minimum benefit up, which would lift 5 million people out of poverty, he said.
In addition, it would increase all benefits by 2% across the board, while also making benefits more generous for others including long-term beneficiaries, widows and widowers, and dependent children who are students.
The changes would be the first enhancements to Social Security in 52 years, according to Larson, who said he expects the next Democratic House speaker will make the proposal a priority.
In the meantime, it’s up to voters to put pressure on Congress to act, Larson said.
“Everybody wants to say how much they love Social Security,” Larson said. “You do? Where’s your bill? Where’s your proposal?”
Without action on Capitol Hill, Social Security beneficiaries are left wondering what could happen if benefits eventually do face a shortfall.
“If you take any cut away from any of us who are currently on Social Security, it will have a major effect on us, not just us, but our families,” said Alfred E. Mason, 83, who is the Louisiana state volunteer president at AARP. Mason began paying into the program in 1958 with his first job. More