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    The 60/40 portfolio ‘certainly isn’t dead,’ says senior wealth advisor

    The 60/40 portfolio is an important investment strategy for the average investor.
    Inflation and higher interest rates have stressed it.
    The strategy is still sound but perhaps needs tweaking, one expert said.

    Cravetiger | Moment | Getty Images

    The 60/40 portfolio — a cornerstone strategy for the average investor — has been stressed by the pandemic-era economy and market dynamics.
    However, “the 60/40 portfolio certainly isn’t dead,” Holly Newman Kroft, managing director and senior wealth advisor at asset manager Neuberger Berman, said Thursday at the semiannual CNBC Financial Advisor Summit.

    While not dead, “it needs to be modernized,” she added.

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

    What is a 60/40 portfolio?

    The strategy allocates 60% to stocks and 40% to bonds — a traditional portfolio that carries a moderate level of risk.
    More generally, “60/40” is a sort of shorthand for the broader theme of investment diversification.
    The thinking is that when stocks — the growth engine of a portfolio — do poorly, bonds serve as a ballast since they often don’t move in tandem.
    The classic 60/40 mix is generally thought to include U.S. stocks and investment-grade bonds, like U.S. Treasury bonds and high-quality corporate debt.

    Why the 60/40 portfolio is stressed

    Through 2021, the 60/40 portfolio had performed well for investors.
    Investors got higher returns than those with more complex strategies during every trailing three-year period from mid-2009 to December 2021, according to an analysis authored last year by Amy Arnott, portfolio strategist for Morningstar.
    However, things have changed.
    Inflation spiked in 2022, peaking at a rate unseen in four decades. The U.S. Federal Reserve raised interest rates aggressively in response, which clobbered stocks and bonds.
    Bonds have historically served as a shock absorber in a 60/40 portfolio when stocks tank. But that defense mechanism broke down.

    How to rethink the 60/40

    That dynamic — stocks and bonds moving more in tandem — is likely to persist for a while, Paula Campbell Roberts, chief investment strategist for global wealth solutions at KKR, said at the summit.
    Indeed, while the Fed is unlikely to raise interest rates much higher (if at all), officials have also signaled they’re unlikely to cut rates anytime soon.
    And there are some risks for U.S. stocks going forward, experts said. For one, while the S&P 500 is up 14% this year, those earnings are concentrated in just 10 of the biggest stocks, Roberts said.
    That said, investors also benefit from higher interest rates since they can “access safer asset classes at a higher yield,” Kroft said. For example, banks are paying 5% to 5.5% on high yield cash accounts, and municipal bonds pay a tax-equivalent yield of about 7%, she said.

    The Fed’s “higher for longer” mentality means bonds should have these equity-like returns for a longer period, Kroft said.
    So, what does this mean for the 60/40 portfolio? For one, it doesn’t mean investors should dump their stocks, Kroft said.
    “You never want to exit the asset class,” she said.
    However, investors may consider substituting part — perhaps 10 percentage points — of their 60% stock allocation for so-called alternative investments, Kroft said.

    That would likely increase investment returns and, given the typical properties of “alts,” reduce the risk of those assets moving in tandem with stocks, Kroft said.
    Within the alts category, high net-worth investors can access certain things like private equity and private credit, Kroft said. The typical investor can gain alts access through more liquid funds — like a mutual fund or an exchange-traded fund — that focuses on alts, or via funds geared toward commodities, she added.
    She cautioned that affluent investors pursuing private equity need to be “very careful” in their selection of asset managers because the difference in performance between top-performing and mid-tier firms is “huge,” Kroft said.
    Within bonds, investors holding bonds with a short duration may want to consider extending that duration to lock in higher yields for longer, she added. More

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    Reality does bite: Why Generation X is falling behind on retirement savings

    According to a recent report by the National Institute on Retirement Security, the typical Gen X household only has $40,000 in retirement savings in private accounts, and most Gen Xers are failing to meet retirement savings targets. 
    When broken down by generation, Gen Xers are most likely to feel behind on their retirement savings, a recent Bankrate study found.
    Here’s how the “sandwich generation” can get back on track.

    Ethan Hawke sits with Winona Ryder in a scene from the 1994 film “Reality Bites.”
    Universal Pictures | Moviepix | Getty Images

    As Generation X knows all too well, “reality bites,” to quote the iconic 1994 film of the same name.
    Most Gen Xers — roughly defined as those born between 1965 and 1980 — are failing to meet retirement savings targets. The typical Gen X household has just $40,000 in retirement savings in private accounts, according to the National Institute on Retirement Security.

    “When we think about retirement preparation, we worry about the large numbers of people who are not on track,” Dan Doonan, executive director of the National Institute on Retirement Security, said Thursday at CNBC’s Financial Advisor Summit.

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    Across the board, many Americans worry about their financial well-being and retirement plans. Over half of working adults feel behind on their retirement savings, according to a recent Bankrate study.
    But when broken down by generation, Gen Xers are most likely to feel this way, followed by baby boomers then millennials and then Gen Zers, Bankrate found. Gen X workers are also most likely to say they are contributing less to their retirement savings this year compared to last year.
    More than half of Gen X workers, or roughly 57%, think it is not likely they will save enough to retire comfortably, according to Bankrate.
    At the same time, the average 401(k) balance among Gen Xers is $153,300, up nearly 15% from a year ago, according to the latest data from Fidelity Investments, the nation’s largest provider of 401(k) plans. 

    Gen X savers have benefited significantly from improved defined contribution plans, including newer plan features such as auto enrollment and auto escalation.

    Why Gen X is falling behind

    Yet, “they still have a big savings gap relative to what they need in retirement,” Fiona Greig, global head of investor research and policy at Vanguard, said at the summit.
    Financial pressure from the rising costs of higher education and health care, as well as ballooning student loan balances, have weighed heavily, Vanguard’s retirement readiness report found.
    This generation is also projected to live longer than boomers, adding another hurdle to their savings shortfall. “They are living a full year longer, but they are not working a full year longer,” Greig said.

    How the ‘sandwich generation’ can get on track

    For clients in their 40s and 50s, “we dig into why they feel behind,” certified financial planner Lazetta Rainey Braxton, co-founder and co-CEO of 2050 Wealth Partners, said at the summit.
    Often, “life has happened and the financial responsibilities have increased,” said Braxton, who is also a member of CNBC’s Financial Advisor Council.

    They are the so-called “sandwich generation” for a reason, she added. “They are supporting the generations ahead of them and also building and expanding their family which requires resources for the generations behind them.”
    Still, there are investment vehicles available that can help, including what your employer offers and individual retirement accounts.
    “If they are coming to us a little later, we put everything on the table so we can move forward in a way that’s realistic,” said Braxton. More

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    Social Security cost-of-living adjustment will be 3.2% in 2024, well below this year’s record-setting increase

    Jozef Polc / 500Px | 500Px Plus | Getty Images

    Social Security beneficiaries will see a 3.2% boost to their benefits in 2024, the Social Security Administration announced on Thursday.
    The annual cost-of-living adjustment for 2024 will affect more than 71 million Social Security and Supplemental Security Income beneficiaries. These benefit adjustments are made annually to help benefits keep place with inflation.

    The change will result in an estimated Social Security retirement benefit increase of $50 per month, on average. The average monthly retirement benefit for workers will be $1,907, up from $1,848 this year, according to the Social Security Administration.
    Most Social Security beneficiaries will see the increase in their monthly checks starting in January. SSI beneficiaries will see the increase in their December checks.
    The 2024 benefit increase is much lower than record 8.7% cost-of-living adjustment Social Security beneficiaries saw this year, the biggest boost in four decades in response to record high inflation. It is also lower than the 5.9% cost-of-living adjustment for 2022. 
    The 3.2% increase is in line with an estimate released last month by The Senior Citizens League, a nonpartisan senior group.
    The Social Security cost-of-living adjustment is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

    The 2024 adjustment comes as many retirees are still struggling with higher prices.
    This is breaking news. Please check back for updates. More

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    As the U.S. birth rate falls, immigration reform may be ‘the answer hiding in plain sight,’ analyst says

    Year-end Planning

    The U.S. birth rate fell slightly in 2022 and still hasn’t recovered to pre-pandemic levels, which was already below the “replacement rate” to maintain the current population.
    Some policy experts point to immigration reform to boost tax revenue and bolster the economy.
    “The biggest hurdle has been polarization and politicization of immigration,” said Silva Mathema, director for immigration policy at the Center for American Progress.

    Demonstrators call for immigration reform near the White House on Feb. 14, 2022.
    Nicholas Kamm | AFP | Getty Images

    As the U.S. fertility rate continues to fall, there are growing concerns about the long-term economic impact: A smaller population means less tax revenue, which could reduce funding for programs such as Social Security and Medicare.
    But immigration policy reform could be one solution, some experts say.

    Lea este artículo en español aquí.

    The U.S. birth rate fell slightly in 2022 compared with 2021, with roughly 3.7 million babies born nationwide, and the birth rate still hasn’t recovered to pre-pandemic levels, according to an initial analysis from the Centers for Disease Control and Prevention.  
    A growing concern for economists, the U.S. fertility rate has generally been below the replacement rate — which is needed to maintain the current population — since 1971 and has consistently been below the replacement rate since 2007. 

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    “The tax base is shrinking, and allowing immigrants to come in lawfully is an easy solution to that,” said Jackie Vimo, senior economic justice policy analyst at the National Immigration Law Center. “It’s the answer hiding in plain sight.”
    In 2022, foreign-born U.S. residents — including legally admitted immigrants, refugees, temporary residents and undocumented immigrants — represented about 18% of U.S. workers, up from 17.4% in 2021, according to the U.S. Bureau of Labor Statistics.
    A pathway to citizenship for undocumented immigrants would offer eligible workers better education and employment opportunities while boosting federal tax revenue, Vimo said.

    Reform could offer ‘huge benefits’ to tax base

    Depending on the scope of changes, immigration policy reform could provide “huge benefits” to the U.S. tax base and economy, said Silva Mathema, director for immigration policy at the Center for American Progress.
    In a 2021 report, the organization modeled the economic impact of four scenarios involving a pathway to legalization and citizenship for undocumented immigrants. 
    The most comprehensive option — a pathway to citizenship for all undocumented immigrants — would increase the U.S. gross domestic product by a total of $1.7 trillion over 10 years and create 438,800 new jobs, according to the report. Eligible workers would earn $14,000 more annually after 10 years.

    “Immigrants currently without a pathway to citizenship pay billions in taxes, even though they don’t benefit from many of the programs they pay into,” such as Social Security and Medicare, Vimo said.
    Undocumented immigrant-led households paid an estimated $18.9 billion in federal taxes and $11.7 billion in combined state and local taxes in 2019, according to the American Immigration Council.
    However, other experts caution that growing the U.S. population through expanded immigration may not boost tax revenue as expected because there’s little control over the ages of new residents.

    Immigrants currently without a pathway to citizenship pay billions in taxes, even though they don’t benefit from many of the programs they pay into.

    Jackie Vimo
    Senior economic justice policy analyst at the National Immigration Law Center

    “You will have a bigger economy, and you will have more tax revenue, but you will also have more people,” said Steven Camarota, director of research for the Center for Immigration Studies. “There’s no evidence your per capita GDP will go up.”

    The challenges of ‘common-sense policy’

    It’s been nearly 40 years since the country made significant changes to immigration policy. The Immigration Reform and Control Act of 1986 “reset the clock and undocumented immigration” but didn’t address future inflows or ways for people to enter the country lawfully, Vimo said.
    “That’s the problem we’ve been facing for decades now,” she said. “And unfortunately, there hasn’t been a political environment in Washington to implement what is common-sense policy.”
    While nearly three-fourths of Americans say it’s “unacceptable” for people to immigrate illegally to the U.S., 56% support making legal immigration easier and 55% support a pathway to citizenship for undocumented immigrants who are already here, according to a 2021 survey of 2,600 U.S. adults by the Cato Institute.
    “The biggest hurdle has been polarization and politicization of immigration,” Mathema said. More

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    5 ways to reduce credit card debt ahead of the holiday shopping season

    The average consumer carries about $6,000 in credit card debt — a 10-year high.
    A higher credit score can help you qualify for the lowest rates on credit cards and personal loans.
    For many consumers, a 0% interest balance transfer card is the best way to pay off credit card debt.

    Eleganza | E+ | Getty Images

    About half of holiday shoppers have already started making purchases or plan to begin by Halloween, according to a recent Bankrate survey.  Most of them will use credit cards to pay for at least some of their purchases, the survey shows.
    “A couple of years ago, early holiday shopping was all about the supply chain mess,” said Bankrate senior industry analyst Ted Rossman. “Now, I think the motivation is more financial.”

    Many consumers are anticipating the effect of inflation on what they’re buying, he said, and they’re stressed about the cost of holiday shopping. But it’s also important to consider the rising cost of carrying credit card debt.

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    Overall, credit card debt in the U.S. has reached a staggering record high of $1.03 trillion, according to the Federal Reserve Bank of New York. The average consumer carries about $6,000 in credit card debt — a 10-year high.
    Many Americans are also carrying more card debt month to month.
    “Part of what’s pushing debt higher is people struggling to make ends meet in the midst of high inflation,” said Matt Schulz, senior credit analyst at LendingTree. “They look at their credit card as a de facto emergency fund.”
    But consumers are paying an exorbitant price for having that credit. 

    The average credit card rate is now about 21%, according to the Federal Reserve Bank of St. Louis. Yet Lending Tree finds the average interest rate on new card offers is 24.45%, the highest level since the firm started tracking credit card rates in 2019. Additionally, 1 out of 3 of the 200 cards it has reviewed has a rate of 29.99% or higher. 
    Here are five strategies to start paying off credit card debt before you begin holiday shopping: 

    1. Know what you owe

    First, get a handle on your debt and what you owe. Find out the interest rate you’re paying on the total balance on each credit card. If you know how much you owe and what you’re paying to borrow that money, it will be easier to come up with a plan to reduce your debt. 

    2. Review your credit report and score

    You can get free access to your credit reports online from each of the three major credit rating agencies — Equifax, Experian and TransUnion — at annualcreditreport.com to help you regularly manage your finances. 
    Check for errors, including accounts that aren’t yours or that you didn’t authorize, or incorrect information on credit card limits or loan balances. You can dispute these errors directly online on the credit agency’s websites.

    While the free credit reports on annualcreditreport.com will not include your credit score, many credit card companies offer their customers a free look at their credit scores. Often when you get your score, it also will give you the risk factors that are affecting your score and what you can work on to improve it. 
    Paying your credit card bills on time and using 10% or less of the available credit are important factors in raising your score. Higher scores can help you qualify for lower-rate cards or cards with promotional offers of 0% interest.

    3. Consider consolidating your debt

    One of the best ways to get rid of credit card debt is to consolidate it by using a 0% interest balance transfer card, but you may need to already have a credit score of 700 or higher to get one. 
    A 0% interest balance transfer card offers 12, 15 or even 21 months with no interest on transferred balances. You may be charged a 3% to 5% fee on the amount that you transfer, so crunch the numbers to make sure it is worth it. 
    For many consumers, it’s the “best weapon” for reducing credit card debt, Schultz said. “The ability to go up to 21 months without accruing any interest on that balance is really a game changer,” he added. “It can save you a lot of money. And it can dramatically reduce the time it takes to pay that balance off.”

    If you get a 0% interest card, be aggressive about paying off as much of the balance as you can with no interest during that introductory period. Generally, after that, it will adjust to a much higher interest rate.
    Another way to consolidate debt is with a personal loan. Currently, such loans come with an average annual percentage rate of about 12%, although a good credit score could garner you a rate as low as 8%. Only borrow enough money to pay off your credit card debt, not to spend more. 
    “You work with a lender,” said Rod Griffin, senior director for public education and advocacy at Experian. “They give you a personal loan that pays off those credit card debts that are a relatively low interest rate, usually over a long, longer term, but it can reduce your payments.
    “And all those credit card account payments would then be paid and reported as paid in full,” he added. “That’s key.” 

    4. Work with your card issuer

    If you don’t qualify for a 0% card or personal loan, contact your card issuer and ask for a lower credit card rate.
    Just make the call. A recent Lending Tree survey found about three-quarters of consumers who asked the issuer for a lower interest rate on their credit card in the past year got one — and they didn’t need a great credit score to get it. 
    If you’re really cash strapped, you could also try working out a debt settlement directly with the creditor. Your goal is to get the creditor to agree to settle your account for an amount that is less than what is owed because at least some payment is better than none. However, there may be some negative consequences, like a tax hit on the amount of debt that you don’t pay that has been forgiven. 

    Oleksandra Yagello | Moment | Getty Images

    Be wary of using debt settlement programs offered by outside companies. With a debt settlement company, instead of paying your creditor, you make a monthly payment into a separate bank account set up by that company.
    Once there is enough money in that account, that company will use the funds to negotiate with creditors for a lump sum payment that is less than what you owe. These programs can take years and you can wind up paying hefty fees, experts say.  
    “So you may be better off using those payments toward your existing debts and reducing those credit card payments yourself as opposed to paying a debt settlement firm,” Griffin said.

    5. Pick a repayment strategy and stick to it

    Once you have lowered the interest you’re paying on your credit card debt, you need to figure out how much you can truly afford to pay every month, every two weeks or every pay period. 
    Figure out how much you must pay for committed expenses such as rent or mortgage, utilities, food and transportation, as well as debt payments, including student loans and credit card bills. 
    Commit to putting a certain amount of your pay toward paying down your credit card debt — at least the minimum balance due on each card.
    If you have multiple cards to pay off, figure out whether you are going to prioritize paying off the highest-interest debt, known as the “avalanche method,” or paying off the smallest to largest balances, known as the “snowball method.”
    If you still prefer to use a credit card for daily expenses, make sure to pay it off in full every month while you’re paying down the balance on other cards. That’s known as the “island approach:” using different cards for different purposes with the goal of getting the lowest possible interest rate, rewards or cash back on each of them, for example. 
    One repayment strategy isn’t necessarily better than the other, but you need to have a plan — and stick to it.
    “There’s no quick fix,” said Griffin. “It takes time to get into debt; it takes time to dig your way out of debt.” The best solution “is usually the slow and steady, have a plan, pay it off over time and change your behaviors,” he added.
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    How to donate to help victims of the Israel-Gaza crisis

    People looking to help those affected by the Israel-Gaza crisis can consider donating to charities working on the ground.
    People want to make sure they’re giving their money to legitimate charities that are making a difference, experts say.
    Here’s what to know about giving smartly and safely.

    Image Source | Image Source | Getty Images

    People looking to help those affected by the Israel-Gaza crisis can consider donating to charities working on the ground.
    Here’s what to know.

    Verify charities to avoid scams

    Look for organizations ‘with a clear plan’

    Laurie Styron, CEO and executive director of CharityWatch, said her organization looks for charities that already have a presence in the affected region and a history of helping people there.
    “If it’s not an organization with a clear plan, your donation could just sit there,” Styron said.
    The folks at CharityWatch have put together a list of top-rated charities providing aid during the Israel-Gaza crisis. The list includes Doctors Without Borders, which has had medical programs in Gaza for more than 20 years, Styron said. “So they’re going to be able to mobilize quickly.”

    There are a lot of innocent people suffering.

    Laurie Styron
    CEO of CharityWatch

    Another charity on its list is the American Jewish Joint Distribution Committee, which is currently providing a wide range of emergency services to victims in Israel.
    Meanwhile, Charity Navigator’s list of charities focusing on the Israel-Gaza crisis includes only organizations that are at least three years old, show a three- or four-star rating and have a track record of positive results in their region, among other requirements. Its list includes American Friends of Magen David Adom, known as the Israeli Red Cross, and the Palestine Children’s Relief Fund, which works specifically in Gaza.
    “There is a very big need,” said Shlomi Zidky, CEO of Round Up, a fundraising platform that has also gathered a network of verified charities helping victims in Israel.
    Aid organizations are “the main lifelines for people,” Zidky said, adding that they are getting people food, medical and psychological support and other vital resources.

    Create a plan for giving

    Many donors may be unsure where to put their money of late with the barrage of violence and natural disasters, including the Ukraine war and the earthquake in Afghanistan, Styron said.
    “The more people impacted, the more overwhelmed people become, and they can get desensitized and not act,” Styron said.

    That can be especially true when an issue is politically fraught, like with the Israel-Gaza crisis.
    “What people need to remember is that whatever side you align yourself with, there are a lot of innocent people suffering,” she said. “Give what you can afford.”

    Donations may reduce taxable income

    Eligible donations can be deducted from your adjusted gross income if you itemize deductions on your taxes.
    For 2023, the standard deduction is $13,850 for single filers or $27,700 for married couples filing together.
    You either claim the standard deduction or your total itemized deductions, including charitable gifts, medical expenses, state and local taxes and more — whichever is more.
    Since most filers take the standard deduction, you’re less likely to see a tax benefit from smaller gifts to charity, but it depends on your total combined itemized deductions.
    — Additional reporting by CNBC’s Kate Dore.
    Correction: Donors are looking to help victims of an earthquake in Afghanistan. An earlier version misstated the natural disaster.
    Join CNBC’s Financial Advisor Summit on Oct. 12, where we’ll talk with top advisors, investors, market experts, technologists and economists about what advisors can do now to position their clients for the best possible outcomes as we head into the last quarter of 2023 and face the unknown in 2024. Learn more and get your ticket today. More

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    A recession may still be in the forecast, experts say. Here’s how to make sure you’re prepared

    The possibility of an economic downturn has been the talk of 2023.
    While the feared downturn has not happened yet, experts are still on guard.
    Here’s how you can be ready, too.

    Shoppers along the Magnificent Mile shopping district in Chicago on Aug. 15, 2023.
    Jamie Kelter Davis | Bloomberg | Getty Images

    A recession has been in the forecast for much of 2023.
    Yet an economic downturn — formally defined as two consecutive quarters of declining GDP growth — has yet to happen.

    “A recession is obviously going to happen at some point,” said Jack Manley, global market strategist at JPMorgan Asset Management. “But the timing of that is not set in stone.”
    Most economists — 61% — put a recession at a less than 50% probability in the next 12 months, according to the latest report from the National Association for Business Economics released this week.
    More from Personal Finance:What workers on strike need to know about unemploymentFrom Amazon to Target: What to know about early holiday salesHoliday shoppers brace for more financial strain this year
    Yet 39% of respondents put the risk of a formal downturn within that time period at more than 50%, the survey found. Of those who expect a recession, half said they would expect it to begin in the first quarter.
    “We are still expecting the economy to slow down considerably and then get into a recession in the first two quarters of next year,” said Eugenio Aleman, chief economist at Raymond James.

    That outlook is based on expectations consumers may pull back on spending while the housing market may face stress, Aleman said. In addition, new conflict in the Middle East may affect both oil prices and the supply chain.
    Those factors may prompt the Federal Reserve to keep interest rates higher for longer, Aleman said.

    The probability of a recession has crept up in the past few months along with negative headlines, Manley said, citing the autoworkers strike, a looming federal government shutdown that was temporarily averted, uncertainty around the Federal Reserve and broader geopolitical issues.
    Those worries may prompt consumers to pull back heading into the biggest spending time of the year, Manley said.
    “Our confidence is so crushed because of all of these bad headlines, because of this wall of worry,” Manley said.
    “There is the chance that we don’t spend as much as we probably would have been planning on before all of these bad headlines,” he said.

    A recession is obviously going to happen at some point. But the timing of that is not set in stone.

    Jack Manley
    global market strategist at JPMorgan Asset Management

    For many consumers, elevated price growth has made it feel like a recession is already here, surveys show.
    Whether a recession is coming or not, these are financial advisors’ top tips for how to prepare now.

    1. Stress-test your finances

    Much of how a recession may affect you comes down to whether you still have a job, Barry Glassman, a certified financial planner and founder and president of Glassman Wealth Services, told CNBC.com earlier this year. Glassman is also a member of CNBC’s Financial Advisor Council.
    An economic downturn may also create a situation where even those who are still employed earn less, he noted.
    As such, it’s a good idea to evaluate how well you could handle an income drop. Consider how long, if you were to lose your job, you could keep up with bills, based on savings and other resources available to you.
    “Stress-test your income against your ongoing obligations,” Glassman said. “Make sure you have some sort of safety net.”
    Notably, job growth was strong in September, according to the latest government data.

    2. Boost emergency savings

    Akinbostanci | E+ | Getty Images

    Even having just a little more cash set aside can help ensure an unforeseen event like a car repair or unexpected bill does not sink your budget.
    Yet surveys show many Americans would be hard pressed to cover a $400 expense in cash.
    Experts say the key is to automate your savings so you do not even see the money in your paycheck.
    “Even if we do get through this period relatively unscathed, that’s all the more reason to be saving,” Mark Hamrick, senior economic analyst at Bankrate, recently told CNBC.com.
    “I have yet to meet anybody who saved too much money,” he added.
    Another advantage to saving now: Rising interest rates mean the potential returns on that money are the highest they have been in 15 years.

    3. Reduce your debt balances

    If you have credit card debt, you’re not alone.
    Balances topped $1 trillion for the first time in the second quarter.
    While higher interest rates are pushing up how much you fork over for debts, you can control that by paying down your balances, Matt Schulz, chief credit analyst at LendingTree, previously told CNBC.com.

    “For inflation to grow this quickly is something that is really rattling to people,” Schulz said.
    But certain moves may help you to control your personal interest rate, he said.
    If you have outstanding credit card balances you’re carrying from month to month, try to lower the costs you’re paying on that debt, either through a 0% balance transfer offer or a personal loan.
    Alternatively, you may try simply asking your current credit card company for a lower interest rate.

    4. Be opportunistic

    Fears of an economic downturn or market turbulence can provide an opportunity for investors who are willing to take risks, according to Kamila Elliott, a CFP and co-founder and CEO of Collective Wealth Partners in Atlanta.
    If you’re five years away from retirement or even closer, now is the time to sit down with a trustworthy financial planner to make sure you’re on track, Elliott, who is a member of the CNBC Advisor Council, told CNBC.com earlier this year.
    For those who are further away from retirement — with that goal 10 to 30 years from now — this may be a time to take more risks because you have time to ride out any market volatility, Elliott said.
    The average market return tends to bounce back, which can result in meaningful progress over time.
    Elliott said it reminds her of a famous quote from legendary investor Warren Buffett: “Be fearful when others are greedy and greedy when others are fearful.”
    “We take that philosophy looking at our investments whenever there’s fear and there’s risk there’s also, oftentimes, opportunity,” Elliott said.
    Join CNBC’s Financial Advisor Summit on Oct. 12, where we’ll talk with top advisors, investors, market experts, technologists and economists about what advisors can do now to position their clients for the best possible outcomes as we head into the last quarter of 2023 and face the unknown in 2024. Learn more and get your ticket today. More

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    Here are 3 ways to avoid paying more than what you actually owe on your credit cards

    The average credit card interest rate for existing accounts is at 22.77%, the highest it has been in 30 years, according to a report by WalletHub.
    Despite using automated payments to avoid missing due dates, cardholders can still end up paying late fees and interest charges on top of actual balances.
    Here’s how to avoid paying more than what you actually owe.

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    Given record-high interest rates, now is not the time to be taking on more credit card debt.
    The Federal Reserve is expected to further hike interest rates before the end of the year, and the average credit card interest rate is already at an all-time high. The average rate for existing accounts is at 22.77%, the highest it has been in 30 years, according to WalletHub.

    Automated payment options can help credit card holders bypass late payment fees. While cardholders who use automated payment features typically set them for more than the minimum due, they also tend to pay off less of their monthly balance than customers making manual payments, according to a 2022 study.
    Such cardholders will end up paying more in interest in the long run if they don’t pay their statement balance in full each month, experts say.
    “You can set it up for a lower payment,” said Sara Rathner, credit cards expert and writer at NerdWallet, referring to a monthly automated card payment. “If you still have a balance, [that] will roll over as long as it’s unpaid.” But that unpaid balance will be subject to interest charges.
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    Avoid paying more in interest and fees by setting up your credit card automated payments to cover the entire statement balance, experts say. If you check your account online, you may also see a “current” balance that includes newer charges, but you only have to pay the statement balance in full each month to avoid interest charges.

    If you can’t pay your statement balance in full, be sure to make smaller payments on a regular basis to keep current and chip away at your overall balance, said Nick Ewen, director of content at The Points Guy. Not doing so can mean hefty late fees in addition to accrued interest.
    You usually can pay off your statement or current balance whenever you like. “There’s no penalty charge on your card if you pay your statement balance before the due date,” Ewen added.
    Here are some of the best practices cardholders should consider:

    1. Move the due date closer to your payday

    Ask your lender if you can change your card payment due date to a few days after your paycheck is deposited, said Rathner. This way, you’re aware of how much money is available in your checking account before a scheduled automatic card payment goes through and you won’t overdraft your account, she added.
    Log into your credit card account online or call a customer service agent to find out what features you have available to facilitate this.

    2. Watch out for penalty APRs

    Zero percent annual percentage rate offers are usually good for 12 to 18 months. However, if a cardholder does not make a minimum payment, the card issuer can revoke the 0% APR offer and push the customer into an APR of 29% or higher, said Ewen.
    Make sure to read the fine print and make all the payments to keep the offer rate. Additionally, pay off the full balance before the promotion expires. Otherwise, you will be hit with interest charges at that point, he added.

    3. Consider a balance transfer or product change

    If you’re carrying credit card debt, consider doing a balance transfer, said Ewen. Some credit cards offer a 0% APR for balance transfers for, as an example, a one-time fee of 3% to 5% or $5, he said. If you transfer a balance from one card to another for a 12-month 0% APR, you have a year to pay off the balance as long as you pay it off by the time the introductory special is over.
    Additionally, if the terms change with one of your existing credit cards, most larger credit card companies will offer you a product change, said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners in Irvine, California.
    Instead of closing the affected card, move to another card from the issuer that has no annual fee, she added. This is helpful if you have a high-fee credit card and want to keep the overlying credit line high.
    “It doesn’t require credit pool and reduces credit card expenses,” said Sun, a member of CNBC’s Advisor Council. Call the provider and see if a product change is available.
    Join CNBC’s Financial Advisor Summit on Oct. 12, where we’ll talk with top advisors, investors, market experts, technologists and economists about what advisors can do now to position their clients for the best possible outcomes as we head into the last quarter of 2023 and face the unknown in 2024. Learn more and get your ticket today. More