Markus Andrews

The Social Security Fairness Act will provide benefit increases to more than 3 million individuals.
But it’s uncertain when they will see that money.
Here’s what the agency says affected beneficiaries should do in the meantime.

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More than 3.2 million people will see increased Social Security benefits, under a new law.
However, individuals who are affected may have to wait more than a year before they see the extra money that’s due to them from the Social Security Fairness Act, the Social Security Administration said in an update on its website.

“Though SSA is helping some affected beneficiaries now, under SSA’s current budget, SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefits,” the agency states.
The Social Security Fairness Act eliminates two provisions — known as the Windfall Elimination Provision and Government Pension Offset — that previously reduced Social Security benefits for certain beneficiaries who also had pension income provided from employment where they did not contribute Social Security payroll taxes.
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Those provisions reduced benefits for certain workers including state teachers, firefighters and police officers; federal employees who are covered by the Civil Service Retirement System; and individuals who worked under a foreign social security system.
The law affects benefits paid after December 2023. Consequently, affected beneficiaries will receive increases to their monthly benefit checks, as well as retroactive lump sum payments for benefits payable for January 2024 and after.

The benefit increases “may vary greatly,” depending on an individual’s type of Social Security benefits and the amount of pension income they receive, according to the Social Security Administration.
“Some people’s benefits will increase very little while others may be eligible for over $1,000 more each month,” the agency states.

The Social Security Administration said it cannot yet provide an estimated timeline for when the benefit adjustments will happen.
In the meantime, the agency is advising beneficiaries to update their mailing address and bank direct deposit information, if necessary. In addition, noncovered pension recipients may now want to apply for benefits, if they are newly eligible following the enacted changes.

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The 2025 tax season opened for individual filers on Jan. 27.
This season, many qualify for free filing options, such as Direct File, IRS Free File or Volunteer Tax Assistance.
Those affected by natural disasters, such as California wildfire victims, may have extensions to file and pay.

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Many taxpayers qualify for free filing options 

If you’re eager to file your taxes for free, there are several options for your 2024 filing, according to financial experts.
This season, more than 30 million taxpayers may be eligible for Direct File, the IRS’ free tax filing program, according to the U.S. Department of the Treasury. 

Direct File has expanded to 25 states and “will cover more tax situations than last year,” former IRS Commissioner Danny Werfel told reporters during a press call in early January.

Another option, IRS Free File, offers free guided tax prep software if your adjusted gross income, or AGI, was $84,000 or less in 2024.
An estimated 70% of taxpayers qualify for IRS Free File, but only a fraction of eligible filers use it, according to Tim Hugo, executive director of the Free File Alliance.
Many filers also qualify for more guidance via Volunteer Income Tax Assistance, or VITA, a free IRS-run program. You’re generally eligible with an AGI of $67,000 or less.

Tax relief for natural disaster victims

While the federal tax deadline is April 15 for most filers, some tax filers, including California wildfire victims, have extensions to file returns and pay taxes owed. The IRS provides a detailed breakdown of IRS tax relief by date.
Congress in December also extended tax relief for certain victims affected by federally declared natural disasters from 2020 to early 2025. As a result, some filers could qualify for a bigger tax break for losses. 

Missing forms could delay your return 

While it may be tempting to file your return quickly, it is important to gather the necessary tax forms first, according to certified public accountant Brian Long, senior tax advisor at Wealth Enhancement in Minneapolis. Otherwise, the IRS systems could flag your return for missing or inaccurate information, which could delay processing.
However, you can use your “prior-year tax return as a checklist” for accuracy, Long added.
While many tax forms arrive in January, others may come between mid-February and March or later, experts say. More

Retail investors put more than $562 million into Nvidia shares on a net basis on Monday amid the chipmaker’s historic sell-off, according to Vanda Research.
That marked a record for net inflows into Nvidia, showing everyday investors bought the dip while institutions dumped shares.

CFOTO | Future Publishing | Getty Images

Retail investors rushed into Nvidia on Monday, signaling Main Street support for the chipmaker despite the emergence of an artificial intelligence model from China that battered its shares and caused a historic, $600 billion loss in market value.
Everyday traders bought more than $562 million worth of Nvidia shares on balance Monday, according to data from Vanda Research that subtracts total outflows from inflows. That marked a record for daily net inflows into Nvidia as mom-and-pop investors bucked their institutional counterparts, who dumped the stock en masse.

The buy-in from individuals came as Nvidia suffered its biggest one-day loss, tumbling around 17%, since the onset of the Covid pandemic in March 2020.
Monday’s plunge came in the wake of news that an AI model from Chinese startup DeepSeek scored high performance marks more cheaply and in far less time than Western counterparts.
The development raised doubts about the U.S. strategy of spending huge sums on AI and the data centers they require, just as President Donald Trump last week announced a multi-billion dollar AI project called Stargate. The sudden rise of DeepSeek also rang alarm bells that America may not lead in AI technology, offering chilling reminders of what some described as a “Sputnik moment” at the dawn of the Space Race.
Nvidia told CNBC on Monday that DeepSeek’s model was an “excellent AI advancement.” DeepSeek’s offering reportedly outperformed the best models of OpenAI and other U.S. competitors, further stoking concerns about the status of the U.S. in AI.
For their part, however, individual investors were unfazed. Data from Vanda shows the chipmaker was the most-purchased security by average investors on net in 2024 — surpassing even the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500.

Arrows pointing outwards

One of the buyers on Monday was Nirav Patel. The technology manager said he spent hours testing DeepSeek’s model and concluded that, while development costs have come down, more chips will be needed to handle the increase in demand that should accompany growing affordability.
“In my opinion, you will see much higher adoption of reasoning AI models,” Patel said. “With adoption, you need more compute, and so you’ll need more Nvidia chips basically.”
The show of support from small-scale traders is the latest example of retail investors diverging from monolithic Wall Street, as happened during the meme stock craze that captivated U.S. markets during the pandemic. The difference now being that individuals can’t swing the price of Nvidia, with a market value Tuesday near $3 trillion, the way they could small-cap stocks such as video game retailer GameStop or movie theater chain AMC four years ago.
Despite the contrast in size, there were similar overtones on Monday, however. Nvidia was the most-mentioned stock on the popular WallStreetBets Reddit forum over the past 24 hours, with mentions surging more than 175% as its shares plunged, according to Quiver Quantitative data as of Tuesday morning.
One Reddit user posted a photo of their Nvidia position on the WallStreetBets forum with the title “in Huang we trust,” a reference to Nvidia CEO Jensen Huang. Another said Monday’s moves were a “classic overreaction” and “missed the bigger picture.” More

A certificate of deposit offers a guaranteed interest rate over a specified term. Consumers can get their money early but generally with a penalty.
Consumers often come out ahead by buying a long-term CD and paying an early withdrawal penalty, instead of picking a CD with a shorter term, research suggests.

Boonchai Wedmakawand | Moment | Getty Images

You may be leaving money on the table when it comes to certificates of deposit, some research suggests.
CDs have a set term, ranging from a few months to five or more years. Upon maturity, banks return the depositor’s principal plus interest.

Consumers who want their money early must generally pay a penalty, losing out on months of interest. However, paying that withdrawal penalty may be worthwhile for many savers who adopt the right strategy.
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That’s what is suggested in a recent research paper from Matthias Fleckenstein, associate professor of finance at University of Delaware, and Francis Longstaff, finance professor at the University of California, Los Angeles.
Rather than pick a short-term CD, consumers often get a higher return by choosing a long-term CD and paying a penalty to pull money out early, they found.
Consumers who are unaware of the strategy may get “shortchanged” by banks, Fleckenstein told CNBC.

‘The rule rather than the exception’

Here’s an example: If an investor puts $1 in a five-year CD with a 5% interest rate and cashes it out after one year with a penalty equivalent to six months of interest, they would receive about $1.03, which is slightly more than the $1.01 they would get from a one-year CD with a 1% interest rate, despite the penalty incurred for early withdrawal. 
Banks frequently price CDs this way, Fleckenstein and Longstaff wrote in their paper, published in October in the National Bureau of Economic Research.

The researchers examined weekly CD rates offered by 16,891 banks and branches — ranging from small community banks to big nationwide institutions — from January 2001 to June 2023. Rates were for accounts up to $100,000.
About 52% of CDs offered during that period had such “inconsistencies” in pricing when comparing a given term against a longer-term CD cashed in early, they found.
“It’s the rule rather than the exception,” Fleckenstein said.
“There are banks that do this all the time,” he said, and “there are some that don’t do this at all.”
At banks where this happens, the difference in returns “is not tiny,” Fleckenstein said. In fact, the pricing inconsistency is about 23 basis points, on average, over the roughly two decades they assessed, he said.
Given that disparity, the average investor who invested $50,000 could have gotten an extra $115 of interest by picking a longer-term CD and cashing it in early, their research suggests.
The average size of that pricing difference rose as interest rates began to increase during the Covid-19 pandemic, Fleckenstein said.

CDs often for ‘safety and liquidity’

Households that save in CDs are generally looking for “safety and some liquidity” for a chunk of their assets, said Winnie Sun, co-founder of Irvine, California-based Sun Group Wealth Partners and a member of CNBC’s Financial Advisor Council.
The typical CD buyer has a goal in mind, like saving for a home down payment, and wants to earn a modest interest rate without subjecting their money to much risk, Sun said.
About 6.5% of households held assets in CDs as of 2022, with an average value of about $99,000, according to the most recent Survey of Consumer Finances.
Like any investment, there are pros and cons to CDs.
For example, unlike other relative safe havens like high-yield savings accounts or money market funds, CDs offer a guaranteed return over a set period with no chance of market-based losses. In exchange, however, CDs offer less liquid access to your cash than a savings account and lower long-term returns than the stock market.

“Shop around for the best CD rate across banks, but also look within banks at whether it actually may pay off to accept a longer term but pay an early withdrawal penalty,” Fleckenstein recommended, based on his research findings.
The option may not be as prolific in the current market environment, though.
Long-term CDs typically pay a higher interest rate than shorter-term ones, Sun said. But average rates for one-year CDs are currently higher than those for five-year CDs: 1.7% versus 1.4%, respectively, according to Bankrate data as of Jan. 20.
Households can pursue other CD strategies, Sun said.
For example, instead of putting all savings into a long-term CD, consumers might put a chunk of their money into a long-term CD and with the remaining funds build a “ladder” of shorter-term CDs that mature more quickly. They can then buy more CDs if they’d like once the shorter-term ones come due. More

Constellation Energy, Vistra Corp., Talen Energy and GE Vernova tumbled as China’s DeepSeek AI lab debuted, scaring investors with a lower-cost business model.
Constellation, Vistra and GE Vernova were leading the S&P 500 this year as investors speculated on AI’s power needs.
Now, the arrival of DeepSeek is raising questions about how much power will actually be needed.

The cooling towers of the Three Mile Island nuclear power plant in Middletown, Pennsylvania, Oct. 30, 2024.
Danielle DeVries | CNBC

Power companies that are most exposed to the tech sector’s data center boom plunged Monday, as the debut of China’s DeepSeek open-source AI laboratory led investors to question how much energy artificial intelligence applications will actually consume.
Vistra closed nearly 30% lower, erasing its gains for 2025. Constellation Energy, Talen Energy and GE Vernova tumbled more than 20%, with the latter two stocks also giving up this year’s gains.

Before Monday’s selloff, Constellation, Vistra and GE Vernova had surged to top of the S&P 500 as investors speculated that AI data centers will boost demand for enormous amounts of electricity.
Natural gas stocks also fell steeply Monday, suggesting some investors believe the sector might get as big a boost as expected from data center demand. Producer EQT Corp. lost nearly 10% while pipeline companies Kinder Morgan and Williams Companies fell more than 8%.
DeepSeek released an AI model on Christmas Day that Scale AI CEO Alexandr Wang described in an interview with CNBC last week as “earth shattering.” Scale AI provides training data for AI applications.
DeepSeek followed up last week with the release of a reasoning model named DeepSeek-R1 that competes with OpenAI’s o1 model. DeepSeek has since risen to the top of mobile app stores. Wang said DeepSeek has essentially caught up with OpenAI.
“Their model is actually the top performing, or roughly on par with the best American models,” Wang told CNBC’s Andrew Sorkin in a Jan. 23 interview at the World Economic Forum in Davos, Switzerland.

Microsoft CEO Satya Nadella has described DeepSeek as “super-compute efficient.” Bank of America analysts said in a Monday note that DeepSeek is “challenging the notion of U.S. leadership in AI and raising doubts about the high expectations for cloud capex, chip growth and power requirements.”
The tech companies have anticipated needing so much electricity to supply data centers that they have increasingly looked to nuclear power as a source of reliable, carbon-free energy.
Constellation, for example, has signed a power agreement with Microsoft to restart the Three Mile Island nuclear plant outside Harrisburg, Pennsylvania. Talen is powering an Amazon data center with electricity from the nearby Susquehanna nuclear plant.
Vistra has not signed a data center deal yet, though investors see promise in its nuclear and natural gas assets. GE Vernova has soared this year as the market believes its gas and electric grid businesses will benefit from AI demand.
The Bank of America analysts said grid investment in the U.S. and Europe is still required.
“Electrical grids in Europe and the U.S. remain under-invested and one of the critical bottlenecks in terms of meeting load growth requirements,” the analysts said.

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When it comes to money, couples face a big question: yours, mine or ours?
A new survey takes a look at how couples are managing their finances.
Experts say there generally isn’t a wrong answer — as long as you communicate.

Jeffrey Hamilton | DigitalVision | Getty Images

When it comes to money, couples face one question: should we keep our money separate, combine it or some combination of both?
A December Bankrate survey finds 62% of couples who are in a committed relationship keep at least some money separate from each other.

Of those couples, 38% rely exclusively on joint accounts they share, the survey of 2,217 adults found. Meanwhile, 34% of couples have a combination of joint and separate accounts and 27% keep their money completely separate.
Younger couples tend to be more in favor of some separation for their money, Bankrate found. The survey found 88% of Gen Zers keep at least some money to themselves, versus 70% of millennials, 59% of Gen Xers and 52% of baby boomers.
Younger couples may gravitate more toward separate accounts because they are marrying later and become used to managing their own incomes, said Ted Rossman, senior industry analyst at Bankrate. Moreover, now that it’s easier to complete banking and shopping transactions online, that has also encouraged separate accounts for younger couples.

Communication is key

Keeping money separate but equal can work, so long as couples agree on the parameters ahead of time, Rossman said.
“That’s really the key for people is you need to communicate about what you’re doing with your money,” Rossman said.

Many financial advisors say the best choice comes down to a couple’s personal preferences, and what works best when it comes to fulfilling their financial goals.
“Unless there’s reason to separate them, it doesn’t much matter,” David Zavarelli, a certified financial planner and financial advisor at LPL, said of how couples manage their accounts.
However, Zavarelli said he is working with a couple who insist on separate accounts for everything, down to his and her vacation and Christmas club accounts. In total, they have 27 accounts, which can be cumbersome to maintain with the firm’s financial planning software, he said. But he’s not worried about the couple’s financial arrangement.
“They’re both on the same page,” Zavarelli said. “We do just kind of have a chuckle and then move on with the plan.”

For all couples, whether or not money becomes an issue comes down to communication, experts say.
Research from Cornell University suggests that a couple’s attitude toward money — whether or not they see problems as solvable — influences how well they communicate about finances. If they don’t feel there’s a solution, they’re less likely to talk about it.
That lack of communication can contribute to financial infidelity, when one or both partners lie about or hide financial information.
Bankrate’s survey found 40% of adults who live with their partners are committing or have committed financial infidelity. Some examples of the secrets they keep include spending more than their partner would want, having secret debt, or keeping a secret credit card, savings account or checking account.
To help prevent that, it helps to take the time to communicate with your partner about both short- and long-term financial goals, according to Rossman.
“I would urge people to set up regular money discussions or dates,” Rossman said.

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By many measures, millennials are doing remarkably well.
Still, very few millennials would consider themselves wealthy.
The disconnect between being rich on paper and feeling well off has been referred to as “phantom wealth.”  

Millennials have come a long way since their days of being called lazy or entitled. Despite reaching key milestones later than their parents once did, they are now wealthier than previous generations were at their age.
“Younger families in the U.S. made remarkable gains,” according to an analysis of 2022 data by the St. Louis Federal Reserve.

Collectively, millennials are now worth about $15.95 trillion, up from $3.94 trillion five years earlier, according to Federal Reserve data. 

Still, very few millennials would consider themselves wealthy. The disconnect between being rich on paper and feeling well off has been referred to as “phantom wealth.”  
For example, gains in the value of a home or a retirement plan can feel like phantom wealth because they are illiquid and have no bearing on day-to-day cash flow. 
Boosted by a strong jobs market and rising wages, many in this age group have purchased homes and benefited from soaring home values. To that point, the St. Louis Fed report found between 2019 and 2022, home prices jumped 44%.
Largely driven by real estate gains, the “median wealth of these younger people more than quadrupled” during this three-year period, the report said.

However, homeownership does not offer the same sort of safety cushion other investments do, noted Michael Liersch, head of advice and planning at Wells Fargo.
“Unless you are willing to downsize, you are really not going to monetize the increase in that asset,” said Liersch, especially in the case of a primary residence. “Millennials, in particular, haven’t been able to use that wealth.”

Millennials have ‘phantom wealth’

“Phantom wealth is a nonsensical term: assets either exist or they don’t,” said Brett House, an economics professor at Columbia Business School. However, there is a very real phenomenon at work.
As it turns out, “millennials experienced a sharp swing in their relative standing,” the St. Louis Fed report found.
The median wealth of older millennials, between the ages of 36 and 45, was 37% above expectations. The wealth of younger millennials and older Gen Zers, or those aged 26 to 35, exceeded expectations by 39%.
Compared with other generations, millennials are also more likely to say that their income went up over the last few months and that they expect their earnings potential to increase again in the year ahead, according to another report by TransUnion.
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But even as households became wealthier, inflation and instability have left more people in the bucket of so-called HENRYs — “high earners, not rich yet,” House said.
And “the ‘HENRY’ phenomenon isn’t limited to millennials or Gen Z,” he added.
“It’s harder for every generation to feel financially comfortable when the management of so much risk related to employment, healthcare, retirement pensions, insurance, and other components of economic well-being has been shifted to individuals during a period of rapidly rising prices,” House said.

‘There is so much more to achieve’

Many millennials also say it’s harder today to make it on their own than it was for their parents when they were starting out.
They have higher student loan balances, bigger mortgages and car payments, and more expensive child care costs, explained Sophia Bera Daigle, founder and CEO of Gen Y Planning, a financial planning firm for millennials.
“Cash flow has been tight,” she said.
That makes it more difficult to set extra money aside or make long-term plans, said Bera Daigle, a certified financial planner and a member of CNBC’s Advisor Council. “While they are making significant progress on reaching some financial goals, it still feels like there is so much more to achieve.”
However, feeling financially secure is often less about how much money you have and more about the ability to spend less than you make, experts say.

In part, higher prices have fostered the feeling of being overextended, according to CFP Kamila Elliott, co-founder and CEO of Collective Wealth Partners.
Elliott, who is also on CNBC’s FA Council, said clients often ask “Where is my money going?”
“If you feel like a lot of fixed expenses are going up, it may mean you need to cut back on the fun things,” she advised, such as eating out or taking a vacation.
“It’s going to take a little bit of an offset to have more money at the end of the month,” Elliott said.

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