Markus Andrews

As enrollment numbers dwindle, a growing number of institutions struggle to stay afloat.
Smaller, less selective schools have been the hardest hit, while the country’s most elite colleges and universities continue to thrive.

Many colleges are under financial pressure, and the cracks are starting to show.
At least 20 colleges closed in 2024, and more are set to shut down after the current academic year, according to the latest tally by Implan, an economic software and analysis company.

Altogether, more than 40 colleges have closed since 2020, according to a separate report by Best Colleges.
More from Personal Finance:Teens are losing faith in collegeThese are the top 10 highest-paying college majorsThe sticker price at some colleges is now nearly $100,000 a year
As the sticker price at some private colleges nears six figures a year, students have increasingly opted for less expensive public schools or alternatives to a four-year degree altogether, such as trade programs or apprenticeships.
At the same time, the population of college-age students is also shrinking, a trend referred to as the “enrollment cliff.”
Experts have continuously warned that ongoing problems with the new Free Application for Federal Student Aid form have resulted in fewer students applying for financial aid, which could also contribute to declining enrollment.

That has left some colleges and universities in a bind, especially “small private — often liberal arts — schools,” said Candi Clouse, a vice president at Implan.
Meanwhile, the country’s most elite institutions are thriving.

College applications jump

Coming out of the pandemic, a small group of universities, including many in the Ivy League, experienced a record-breaking increase in applications, reports show.
Last year, Yale University, for example, accepted 3.73% of the record-high 57,465 students who applied to the Class of 2028.
Overall, the number of college applicants jumped 11% in the 2023-24 school year, even as enrollment flatlined, the latest data from the Common Application found, suggesting more students are applying to the same schools.

If you are not a big brand, you have a real problem on your hands.

Hafeez Lakhani
founder and president of Lakhani Coaching

“There’s been a paradox in higher education for five-plus years,” said Hafeez Lakhani, founder and president of Lakhani Coaching in New York.
“At the very same time you have an enrollment crisis building, you have record application volume at the most selective schools,” he said. “The consensus is, it’s only worth going to college if it’s a life-changing college.”
Meanwhile, private colleges that are less prestigious but equally expensive are struggling to attract applicants, he added.
For a majority of students, “the costs are nowhere near reasonable,” Lakhani said.
“If you are not a big brand, you have a real problem on your hands,” he said.

College is becoming a path for only those with the means to pay for it, other reports show. 
Children from families in the top 1% are more than twice as likely to attend a so-called Ivy Plus school as those from middle-class families with comparable SAT or ACT scores, according to the National Bureau of Economic Research. 
Though opinions on which schools should be considered Ivy Plus vary, the group generally includes the eight private colleges that comprise the Ivy League — Brown, Columbia, Cornell, Dartmouth, Harvard, University of Pennsylvania, Princeton and Yale — plus the University of Chicago, Duke, Massachusetts Institute of Technology, and Stanford.
Most Americans still agree a college education is worthwhile when it comes to career goals and advancement. However, only half believe the economic benefits outweigh the costs, according to a separate report by Public Agenda, USA Today and Hidden Common Ground.
The rising cost of college and ballooning student loan balances have played a big role in changing views about the higher education system, which many think is rigged to benefit the wealthy, the report found. 
And costs are still rising.
Tuition and fees plus room and board for a four-year private college averaged $56,190 in the 2023-24 school year. At four-year, in-state public colleges, it was $24,030, according to the College Board, which tracks trends in college pricing and student aid.
Already, the majority of applicants hail from the wealthiest zip codes, the Common Application found.
Subscribe to CNBC on YouTube. More

Victims of Hurricanes Helene and Milton could get a tax deduction for losses.
However, the tax break is generally only available for damage in federally declared disaster areas through 2025.
Experts cover who qualifies for the deduction and how to calculate it.

David Hester inspects damages of his house after Hurricane Helene made landfall in Horseshoe Beach, Florida, on September 28, 2024. 
Chandan Khanna | Afp | Getty Images

After a natural disaster, some victims may be eligible for tax relief — but qualifying can be tricky, tax experts say.
In late September, Hurricane Helene ravaged parts of Florida, Georgia, North Carolina, South Carolina, Virginia and Tennessee. Two weeks later, Hurricane Milton brought high winds, tornados and flooding through the middle of Florida.

Impacting both insured and uninsured homes, the losses from both storms could amount to tens of billions of dollars.
Certain victims can amend 2023 returns to claim a tax break for recent losses, known as the “casualty loss tax deduction,” according to the IRS. But the calculation is complicated, experts say.
More from Personal Finance:This insurance provision can help with living costs after a natural disasterTaxpayers in 25 states get extra time to file, but not to pay, 2023 federal taxesHow to file a homeowners insurance claim after a natural disaster
Here’s a breakdown of who qualifies for the casualty loss deduction and how the tax break works.

How to calculate the casualty loss deduction

Before 2018, taxpayers who itemize tax breaks could claim the casualty loss deduction for more types of personal losses, such as home damage from a fire or storm, explained certified public accountant and attorney Mark Luscombe, principal federal tax analyst for Wolters Kluwer Tax & Accounting.

But the Tax Cuts and Jobs Act of 2017 temporarily restricted eligibility. Only losses in federally declared disaster areas will qualify through 2025, he explained.

The casualty loss deduction calculation starts with your home’s “adjusted basis,” or original purchase price plus the cost of certain improvements, explained Beth Brennan, vice chair for the disaster relief tax task force at the American Institute of Certified Public Accountants.
You also need to know how much the fair market value declined due to the disaster, she said.

How to calculate the casualty loss deduction
1. Use the smaller of your adjusted basis or pre-disaster fair market value
2. Subtract insurance proceeds and other relief payments
3. Subtract $100 and 10% of adjusted gross income

“In practice, you don’t always have an appraisal of your property right before a disaster hits,” so taxpayers can use “safe harbor methods” outlined by the IRS, Brennan said. The IRS safe harbors generally don’t rely on appraisals.
Once you have your home’s pre-disaster fair market value, you compare it to your adjusted basis. You’ll choose the smaller of those two numbers before subtracting insurance proceeds and other relief payments.
The final step of the calculation is subtracting a $100 and 10% of your adjusted gross income, or AGI, which is all earnings minus certain tax breaks. 
“The higher your AGI, the greater the reduction of your loss,” said Luscombe.

Congress approves ‘qualified disaster losses’

In certain cases, “qualified disaster losses” are eligible for special rules, but “that’s driven by Congressional action,” according to Brennan.
When there’s a qualified disaster loss, the $100 rises to $500, there is no 10% AGI limit and victims can add their loss on top of the standard deduction.
That means they can claim the deduction even if they don’t itemize tax breaks, Brennan said. 
However, “we haven’t had any qualified disasters, as designated as such by Congress since late 2020,” Brennan said. 
“AICPA has been actively advocating for permanent uniform tax relief for all victims of disasters since 2021 — for almost four years now — because we have this inconsistent treatment,” she said.  More

Traders work on the floor of the New York Stock Exchange during morning trading in New York City. 
Michael M. Santiago | Getty Images

Stocks @ Night is a daily newsletter delivered after hours, giving you a first look at tomorrow and last look at today. Sign up for free to receive it directly in your inbox.
Here’s what CNBC TV’s producers were watching as the Dow topped 43,000 for the first time, and what’s on the radar for the next session.

Nvidia

The stock is nearing an all-time high. It’s just 1.9% away from the $140.76 June record. Shares ended Monday’s trading at $138.07.
Nvidia is up nearly 14% in October.

Stock chart icon

Nvidia’s performance in 2024

Other chips

The VanEck Semiconductor ETF (SMH) is up 6.5% in October.
It is 7.7% from the July 11 high.
In the last month, Intel is up 19%. The stock is 54% from the December high.
Micron Technology is up about 19% in a month, as well. The stock is 31% from the June high. CEO Sanjay Mehrotra was on “Mad Money” with Jim Cramer Monday night. “AI is all about memory and experiences, and that’s what’s driving the tremendous growth,” he said. “Smart phones and PCs are starting to come up, but momentum is really just starting.”
Nvidia comes next: Shares are up about 16% in a month. It’s followed by Applied Materials, up 13.5% in a month.
Taiwan Semiconductor Manufacturing is up 11.4% in a month. It hit a high on Monday.
At the bottom of the list: Skyworks Solutions is down 3% in the past month, and Qorvo is down nearly 3%. STMicroelectronics is down about 1% in a month.

More big banks report before the bell

Bank of America: The stock is pretty flat over the past three months. It is 6% from the July high. Bank of America is up nearly 5% in a week.
Citigroup: The bank is up 2.3% in three months, and it’s 2.5% from the July high. Citigroup is up 5.5% in a week.
Goldman Sachs: The stock is up nearly 9% in three months, and it hit a new high Monday. It ended the session at $522.75. Goldman Sachs is up 5.7% in a week.
PNC Financial: The stock is up almost 12% over the past three months. PNC hit a new high on Monday, and shares are up 3.5% in a week. 

Stock chart icon

Goldman Sachs in the past three months

Also big tomorrow

J.B. Hunt Transport Services

CNBC TV’s Frank Holland will cover the numbers when they come out.
J.B. Hunt is up 5.6% in the past three months, and it’s 20% from the February high.
Holland will also discuss the rest of the transportation industry. He has a nifty story regarding stock performance for the companies in the sector and capacity. He will be naming names, so don’t miss it. 

Stock chart icon

J.B. Hunt over the past three months

The election, DJT and bitcoin More

From Oct. 15 through Dec. 7, Medicare enrollees have the ability to switch plans for 2025.
With new changes set to take effect in 2025, that could change how much retirees pay.
Here’s what changes experts say to watch for next year.

Morsa Images | Digitalvision | Getty Images

Medicare open enrollment for 2025 is set to begin on Tuesday.
Beneficiaries have from Oct. 15 until Dec. 7 to evaluate their Medicare coverage options and select new plans for next year.

Experts say it’s an important opportunity retirees should not ignore.
However, just 30% of people on Medicare review their options every year, according to research from KFF, a provider of health policy research.
“Every year, it makes sense to compare coverage options, because people’s needs change from one year to the next, and also plans make changes,” said Tricia Neuman, executive director for the program on Medicare policy at KFF.
“Doing these comparisons can make a big difference in terms of coverage and costs,” she said.
The new year will usher in new changes to Medicare, which means beneficiaries may want to do some careful research during this open enrollment season.

“My best advice would be to start early,” said Ryan Ramsey, associate director of health coverage and benefits at the National Council on Aging.

Changes you can make during open enrollment

During Medicare open enrollment, retirees may select new health plans and prescription drug plans.
They may switch from original Medicare, which is provided by the federal government, to Medicare Advantage plans that are privately managed. They may also switch from Medicare Advantage to Medicare original or change Medicare Advantage plans.
Original Medicare includes Medicare Parts A and B. Medicare Part A covers care provided by hospitals, skilled nursing facilities and hospice, as well as some home health care. Medicare Part B covers doctors’ services, outpatient care, medical supplies and preventive services.
Beneficiaries on original Medicare may choose to add prescription drug coverage by signing up for a Medicare Part D plan, or additional coverage for out-of-pocket costs through Medicare supplement insurance, or Medigap.
Alternatively, beneficiaries may choose a private Medicare Advantage Plan, which provides Medicare Parts A and B, and may also include vision, dental, hearing and prescription drug coverage.

Changes for 2025 that may affect coverage

In 2025, a $2,000 cap on out-of-pocket Medicare Part D costs will go into effect.
The change, which was part of the Inflation Reduction Act of 2022, is “great news” for retirees who have expensive prescription drugs they need to take, said Philip Moeller, author of “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs.”
However, insurance companies may try to pass on the higher Medicare Part D and other prescription coverage costs they now face because of those changes, Moeller explained. That may come in the form of higher prescription co-pays, more expensive coverage tiers for certain drugs or dropping coverage of some drugs entirely.
“This means that consumers should be really vigilant in open enrollment,” Moeller said.
Notably, the Biden-Harris administration has moved to protect beneficiaries from large increases by capping the allowable increase in Part D premiums at $35 per month in 2025, KFF’s Neuman said.
Retirees also should be on the lookout for changing Medicare Advantage coverage, Moeller said.
In some cases, private insurers may have cut out plans or moved out of geographic areas that are no longer attractive to their businesses. While retirees may be inclined to seek Medicare Advantage plans for their prescription drug coverage, they should be aware of possible changes those plans could be making that affect the total costs they will pay, Moeller explained.
Individuals who have Medicare Advantage and who want to switch to original Medicare should be aware they may not be able to purchase a Medigap policy if they have a pre-existing condition, Neuman said.
Notably, four states have protections to prevent that — Connecticut, Maine and Massachusetts and New York.
“In other states, it may be more difficult for people to disenroll from a Medicare Advantage plan and find a Medigap policy if they have a serious medical condition or even asthma, diabetes and other conditions,” Neuman said.

How to best shop around

Experts say thorough research is the best way for retirees to gauge the costs they may face on their current plans or by switching coverage.
Individuals can use Medicare.gov to compare plans or contact Medicare by phone at 1-800-MEDICARE.
State Health Insurance Assistance Program, or SHIP, programs are also available in every state and offer free in-depth, non-biased counseling, according to Ramsey.  
Start now, if possible, Ramsey said.
That extra time will allow you to gather your Medicare.gov login, lists of prescription drugs and have plenty of time to review plan comparison information and ask follow-up questions, he said.
Importantly, any coverage changes do not need to be rushed, Moeller said, and you should take ample time to consider your coverage options.
“There’s no reason to rush to judgment,” Moeller said. “Even if you wait until December 7 to elect coverage for 2025 it will take effect the first of January next year.” More

Former President Donald Trump proposed a new tax deduction on auto-loan interest last week during a speech in Detroit.
The tax break would likely be structured as an itemized deduction, according to tax and policy experts.
If so, it would likely benefit relatively few people. Those who claim the deduction would likely skew toward wealthier households that buy expensive cars, experts said.

Former President Donald Trump departs following an address to the Detroit Economic Club on Oct. 10, 2024.
Sarah Rice/Bloomberg via Getty Images

Former President Donald Trump proposed a new tax deduction last week for car owners who pay interest on an auto loan, one of many tax breaks he has floated on the presidential campaign trail in recent months.
Trump’s proposed tax break would make interest on car loans fully tax deductible. It’s an idea that he compared to the mortgage interest deduction, which allows some homeowners to reduce their taxable income by writing off a portion of their mortgage interest payments each year.

So, which American households would benefit, and how large would the benefit be?
More than 100 million Americans had auto loans in the second quarter of 2024, worth $1.63 trillion, according to the Federal Reserve Bank of New York. The average person had a car loan of roughly $24,000 in 2023, according to Experian.
Someone buying a new vehicle this year would pay, on average, about $1,332 a year in interest charges, according to AAA.

While Trump didn’t offer specific details on how the tax break plan would be implemented, some experts say it would likely provide the most benefits to wealthy Americans.
Such a tax break “mostly would benefit wealthier individuals buying more expensive cars as one has to itemize their taxes to get the tax break,” Jaret Seiberg, financial services and housing policy analyst for TD Cowen Washington Research Group, wrote in a note Thursday.

It’d be “unlikely to benefit entry-level” car sales because such buyers generally have “more modest incomes” and claim a standard deduction on their tax returns, Seiberg wrote.
Either way, the proposal is unlikely to have support among many Democrats or Republicans in Congress, which must pass legislation to adopt the measure, Seiberg said.
A Trump campaign spokesperson didn’t return a request from CNBC for comment or additional detail on the proposal.

It would cost about $5 billion a year

During a speech in Detroit on Thursday, Trump compared the policy proposal to an existing federal tax deduction on home mortgage interest.
That tax break lets homeowners deduct annual mortgage interest payments from their taxable income, thereby reducing their tax bill. It’s only available to taxpayers who itemize deductions on their federal tax returns.
More from Personal Finance:Social Security payroll tax limit increases for 2025Trump’s tax cuts could expire after 2025Taxpayers in 25 states get extra time to file 2023 federal taxes
An auto interest deduction would also come at a large cost to the federal government, experts say. To that point, Trump’s proposal on car loan interest would cost about $5 billion a year in income tax reductions, if structured as an itemized deduction, estimates Erica York, senior economist and research director at the Tax Foundation’s Center for Federal Tax Policy.
It would cost about $61 billion over 10 years, from 2025 through 2034, York estimates.

Few taxpayers claim itemized tax deductions

To get the deduction, car owners would need to itemize their tax return to include their borrowing costs. 
However, most taxpayers — about 9 in 10 — don’t itemize their deductions, experts said. Instead, they claim a standard deduction.
A taxpayer’s total itemized deductions would generally have to exceed the standard deduction — $14,600 for single filers and $29,200 for married couples filing a joint tax return for 2024 — for them to get a financial benefit.
About 14.8 million federal tax returns, or about 9%, claimed an itemized deduction on their 2021 federal tax returns, according to the most recent IRS data.
A 2017 tax law signed by then-President Trump reduced the number of taxpayers who itemize their deductions.

An itemized tax break on car loan interest “would help only a fraction of taxpayers,” said Leonard Burman, an institute fellow at the Urban-Brookings Tax Policy Center.
“This percentage might go up a bit if auto loan interest were deductible, but it’d still be true that the vast majority of household would not be able to benefit, and the ones that did would be disproportionately high-income filers,” Burman explained in an email.
About 62% of people who claimed an itemized deduction in 2021 had an adjusted gross income of $100,000 or more, according to IRS data. Such taxpayers claimed about 77% of the total $660 billion of itemized deductions that year, the data shows.
Wealthier individuals generally get more of a financial benefit from tax deductions, York said.
That’s because the value of the deduction depends on a household’s marginal income tax rate, she said.
Here’s a simple example, using AAA’s aforementioned figure of $1,332 in annual interest charges on new cars. A $1,332 tax deduction for someone in the 10% federal tax bracket would be worth about $133, while it’d be worth $493 to someone in the top 37% bracket, according to Burman.

Precedent for an itemized deduction

There’s precedent for treating a tax break on car loan interest as an itemized deduction, said York of the Tax Foundation.
The federal tax code allowed taxpayers to claim a deduction for “personal interest” until the mid-1980s. That deduction was for all types of consumer borrowing, including interest on auto loans and credit cards, York said.
However, Congress got rid of those deductions in 1986.
Today, just a few categories of interest payments are tax deductible, such as interest on home loans, student loans, money borrowed to buy investment property and interest as a business expense, according to TurboTax.

Don’t miss these insights from CNBC PRO More

Most workers don’t spend much time considering their benefit offerings during open enrollment.
This year could be different, with costs noticeably higher.
Here are some key tips and strategies to make the most of your employer-sponsored plan.

About 165 million Americans get their health insurance through work, and yet most don’t spend much time considering what their employer is offering in the way of benefits and what it will cost.
In fact, employees only spent about 45 minutes a year, on average, deciding which benefit options suit them best, a report from Aon found.

Open enrollment season, which typically runs through early December, is an opportunity to take a closer look at what’s at stake.
And, for starters, costs are going way up.

Costs are rising

The cost of health care has been rising steadily for years. More recently, there’s been a noticeable jump.
For employers, those cost increases are reaching a post-pandemic high, according to WTW, a consulting firm formerly known as Willis Towers Watson. U.S. employers project their health-care costs will increase by 7.7% in 2025, compared with 6.9% in 2024 and 6.5% in 2023, the firm said.
Because of higher costs, employers are considering new ways to adjust their plan offerings, WTW found.

To that point, 52% of companies said they plan to implement programs that will reduce total costs, and just as many intend to steer to lower-cost providers and sites of care, which may mean a narrower network of doctors from which to choose.
Currently, employers subsidize about 81% of health-care plan costs, on average, while employees pay the remainder, according to professional services firm Aon.
However, some of the higher costs will also inevitably get passed on to employees.
More from Personal Finance:Ozempic is driving up the cost of your health care2.5% adjustment to Social Security benefits coming in 2025’Fantastic time’ to revisit bonds as interest rates fall
Roughly one-third, or 34%, of employers expect to shift some of the expense to employees through higher premiums or by raising co-pays on high-deductible health plans in the year ahead, the WTW report found.
The cost per employee is expected to jump 5.8% on average in 2025, marking the third consecutive year of health benefit cost increases above 5%, after a decade of averaging only around 3%, according to a separate report by consulting firm Mercer. 
“These are changes employees will feel,” said Beth Umland, Mercer’s research director of health and benefits.
For workers, health-care expenses are already high: Family premiums for employer-sponsored health insurance rose 7% this year to an average of $25,572, KFF’s 2024 benchmark employer health survey found. Workers are responsible for more than $6,200 of that amount, while employers pick up the rest.
“With cost increases reaching a post-pandemic high, companies are concerned about the burden it’s putting on their workforces, especially since it affects decisions about insurance coverage and care,” Tim Stawicki, WTW’s chief actuary of health and benefits, said in a statement.

Consider your health-care expenses

Often employees are presented with options for medical insurance plan selections: one with a higher monthly cost, known as your premium, and a lower deductible, which is the amount you’ll have to shell out before your employer’s plan kicks in, and another option with higher out-of-pocket costs but lower premiums.
“Most of the time when you go through open enrollment, the first thing you see is the deductible and out-of-pocket costs,” said Regina Ihrke, WTW’s health, equity and wellbeing leader for North America.
When weighing options, use previous years as a guide, advised Gary Kushner, chair and president of Kushner & Company, a benefits design and management company.
He said you should consider: “Am I a low-, medium- or high-claims family? Did I have an incident that required acute care or basically lots of preventative care?”
If you usually only go to the doctor, say, once a year for a check-up, you might want to opt for the so-called high-deductible plan with the lower monthly cost. 

Health savings accounts

Along with a high-deductible health insurance plan, more than 50% of employers also offer a health savings account, or HSA, which can help with additional health-care costs.
To be able to use an HSA, you must have an eligible high-deductible health plan. The IRS defines “high-deductible” as at least $1,650 for self-only plans or $3,300 for family coverage for 2025.
The IRS also determines the maximum allowed contribution each year: The new HSA contribution limit for 2025 will be $4,300 for individuals, up from $4,150 in 2024, and $8,550 for families, up from $8,300 in 2024. Employees 55 or older can make an additional $1,000 catch-up contribution over the IRS annual limits.
HSA contributions then grow on a tax-free basis, and the funds can cover out-of-pocket expenses, including doctor visits and prescription drugs, including expensive weight-loss medications.
As costs continue to go up, HSAs are a key safety net for managing these out-of-pocket expenses, WTW’s Ihrke said. Any money you don’t use can be rolled over year to year.
“Make sure you are considering how to put some money into that savings account so you can use it to pay for a doctor’s bill or save it for future years,” Ihrke explained.

Life and disability insurance

During open enrollment, employees may also be presented with different disability and life insurance options, which are often included in a standard benefits package.
Employer-issued life insurance policies typically amount to a year’s salary. You can buy additional life insurance through your employer. This is called supplemental life insurance, or voluntary life insurance, and it’s optional coverage that you can add to your employer’s basic group policy.
With disability insurance, there are two basic kinds: Short-term disability generally replaces 60% to 70% of your base salary and premiums are often paid by your employer. Long-term disability, which ordinarily kicks in after three months to six months, typically replaces 40% to 60% of your income.
Even if you have these policies through work, it could be a fraction of what you need to protect young children or other dependents.
Consider what’s the right amount for you and your family, then weigh whether you want to buy additional coverage, or supplemental insurance, through your workplace group plan or shop for your own policy, a move many advisors recommend.

Take advantage of voluntary benefits

Additional benefits may be optional but equally important these days, particularly when it comes to well-being. Going into open enrollment, nearly 1 in 5 employees cite deteriorating mental health, according to a recent report by Gallagher.
“More so than ever we are seeing employers looking to address the broadening needs in their workforce,” said Tom Kelly, principal in the Gallagher health and benefits practice, and “today’s employees are looking for more holistic wellbeing support.” More

Once you’ve decided to open a Roth individual retirement account for your child, it’s time to convince them to save their hard-earned money.
Use this opportunity to explain how compound interest works, showing them how even small amounts can grow over time.
Offering a “parental match” program may be a useful incentive.

Momo Productions | Stone | Getty Images

Once you’ve decided that opening a Roth individual retirement account for your child is a great idea, now comes the hard part: convincing the child to save for a far-off retirement instead of spending that hard-earned money. 
I have some ideas for making the case to your child. 

While you’re doing so, it’s also important to consider what counts as “earned income” for a child’s Roth IRA.

How to get your child to start saving for retirement

Getting your kids to save can set them up for long-term financial success. Here are some ways to do it: 

Initiate a “parental match” program in which you chip in some additional money, say another $5 for every $10 of earnings they put into the Roth IRA. Offer tangible rewards for every savings goal they meet; charts and apps can help them keep track. Set up a “savings challenge” in which everyone tries to save a specific amount each month; the one who saves the most or meets their goal gets a reward.

More from CNBC’s Advisor Council

Encourage them to round up all purchases to the nearest dollar and save the difference. For example, if something costs $4.50, they save the remaining 50 cents. Offer to pay your child interest on the money they save. You could set a small percentage, like 5%, to be added to their savings monthly or quarterly. This teaches them about earning money on savings through compound interest.

Motivate your child to take on extra chores or small jobs like babysitting, helping out in the neighborhood, or tutoring. Then, encourage them to save a portion of their earnings by offering a bonus if they save a certain percentage. If they start a small business, such as selling crafts on Facebook Marketplace or Etsy, suggest they save a portion of their profits and offer to match those savings.

Celebrate major savings milestones, such as saving the first $100, with a small reward, whether it’s a favorite treat, a day out or a new book or game. Recognize their savings achievements in front of family or friends to reinforce positive behavior.

Making the case for saving and investing

Use this opportunity to explain how compound interest works, showing them how even small amounts can grow over time. If your child wants to spend money on a particular item, require them to save an equal amount before you allow them to make the purchase. 
For example, if they want to buy a $30 toy, they must first save $60, half for savings and half for the toy. This strategy encourages them to think about balancing saving with spending. Instead of monetary rewards, offer privileges for saving —such as extra screen time, a later bedtime, or a special outing. 
This can make the idea of saving more appealing, especially for younger children. Offer more independence, such as managing a small part of the household budget, as a reward for consistent saving.

Teach financial literacy and lead by example. Let your kids help choose their Roth IRA investments. Seeing how their money can grow through smart investing can be a powerful incentive. Create a family investment club where everyone picks stocks or other investments. Offer a small prize to the person whose investment performs best over a set period. 
Regularly discuss your own savings goals and achievements with your child. When they see you prioritizing savings, they’re more likely to do the same. 
Work together on a family savings goal, such as a vacation, and let them see how their contributions help reach the goal faster. 
Incentivizing your child to save is about making saving rewarding and fun. These strategies can help your child develop strong financial habits that will benefit them throughout their life.

Ways to earn money for Roth IRA contributions

To contribute to a Roth IRA for kids, the child must have earned income. This income could come from traditional employment, such as a part-time job, or from self-employment activities, such as babysitting or lawn mowing. 
The maximum annual contribution for 2024 is $7,000 or the total of the child’s earned income for the year — whichever is less. If a generous parent or other benefactor is willing, they can allow the child to keep part or all of their earned income and fund the Roth, so long as their contribution doesn’t exceed what the child earned.

What counts as earned income for a Roth IRA? Earned income is money received from work or services rendered, and it’s crucial to understand what qualifies to ensure your child’s contributions are compliant with IRS rules:
Wages and salaries:

Paid internships: Most college campuses today have internship offices onsite that can help you with your search for a paid internship. This provides an opportunity to earn income while developing skills and building networking relationships for your future career aspirations. 
Part-time jobs: Earnings from a part-time job, such as working at a grocery store, fast food restaurant, or retail shop, count as earned income. For instance, if a 16-year-old works at a coffee shop and earns $4,000 over the summer, that $4,000 qualifies as earned income.
Formal employment: Income from formal employment, where the child receives a W-2 form, is the most straightforward type of qualifying income. This includes hourly wages, salaries, and tips.

Self-employment income:

Babysitting: Money earned from babysitting jobs is considered self-employment income. For example, if your teen earns $1,500 from babysitting throughout the year, this amount can be used for Roth IRA contributions. The same goes for lawn or yard work around the neighborhood.
Tutoring: My son has done quite a bit of this. Tutoring other students, whether in person or online, also qualifies.
Art and crafts sales: If your child sells homemade crafts or art at local fairs or online and earns income from these sales, it qualifies as earned income.
Gig economy jobs: Earnings from online platforms where a minor might provide services — such as graphic design, writing or coding — count as earned income.
Delivery jobs: Earnings from food delivery jobs, where allowed by age restrictions, through services such as DoorDash or Uber Eats also count as income.

What does not qualify as earned income: Money received from parents for chores or as an allowance does not count, nor do cash gifts or investment earnings, nor scholarships and grants. This last category is considered non-taxable income and therefore cannot be used for Roth IRA contributions.
— By Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners. She is also a member of the CNBC Financial Advisor Council. More

A McDonalds located on Santa Monica Blvd in Los Angeles, California, April 1, 2024.
Robert Gauthier | Los Angeles Times | Getty Images

Investors looking for steady income amid the ongoing geopolitical tensions in the Middle East and economic uncertainty can consider adding dividend-paying stocks to their portfolios.
Choosing the right stocks from the vast universe of dividend-paying companies can be challenging. Recommendations from top Wall Street analysts could help investors pick stocks with attractive dividends that are backed by strong financials.

Here are three dividend-paying stocks, highlighted by Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.

AT&T

Our first dividend pick is AT&T (T), one of the world’s leading telecommunications companies. Last month, the company announced a quarterly dividend of $0.2775 per share on its common stock, payable on Nov. 1. AT&T offers a dividend yield of 5.2%.
Recently, Tigress Financial analyst Ivan Feinseth slightly raised his price target for AT&T stock to $30 from $29 and reiterated a buy rating, saying that “gains in wireless and wireline subscription growth continue to position it as a leading provider of converged 5G and fiber wireline services.”
The analyst highlighted that AT&T reported 419,000 postpaid phone net additions in the second quarter, with an industry-leading postpaid phone churn of 0.70%. Moreover, it witnessed 239,000 AT&T Fiber net additions, marking the 18th consecutive quarter with over 200,000 net additions.
Feinseth added that the company is on track to pass more than 30 million consumer and business locations with its fiber network by the end of next year. The analyst is optimistic about AT&T’s future growth, backed by the continued rollout of 5G and fiber network as well as broadband. He also expects the company to gain from the iPhone upgrade cycle.

Additionally, Feinseth noted the company’s efforts to reduce its costs and debt levels. Overall, the analyst thinks that AT&T offers an attractive investment opportunity, given its compelling dividend yield and a portfolio of resilient businesses.
Feinseth ranks No. 202 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, delivering an average return of 13.2%. (See AT&T Stock Buybacks on TipRanks) 

Realty Income

This week’s second dividend stock is Realty Income (O), a real estate investment trust that invests in diversified commercial real estate and has a portfolio of over 15,400 properties in the U.S., the United Kingdom and six other countries in Europe.
Realty Income is known for its monthly dividends. On Oct. 8, the company declared a monthly dividend of $0.2635 per share, payable on Nov. 15. The stock offers an attractive dividend yield of 5.1%.
Recently, RBC Capital analyst Brad Heffern updated his estimates and price targets for net lease REITs to reflect the impact of a lower interest rate environment. In particular, the analyst raised the price target for Realty Income to $67 from $64 and reaffirmed a buy rating on the stock. The higher price target represents a much lower cost of debt/equity capital that the company and its peers in the net lease REITs group are benefiting from.
Heffern cited several reasons for his bullish stance on Realty Income, including the company having one of the highest-quality net lease portfolios and a high proportion of tenants with public reporting requirements. The analyst also expects the company to benefit from solid acquisition volumes.
“O’s cost of capital is one of the lowest in the peer group, and in our view a low cost of capital is critical to operating in net lease,” he added.
Heffern ranks No. 542 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 48% of the time, delivering an average return of 12.1%. (See Realty Income Stock Charts on TipRanks) 

McDonald’s

Finally, let’s look at the fast-food chain McDonald’s (MCD). Last month, the company announced a 6% hike in its quarterly dividend to $1.77 per share, payable on Dec. 16. This increase marked the 48th consecutive year of dividend increases for MCD. The stock has a dividend yield of 2.3%.
Baird analyst David Tarantino reaffirmed a buy rating on MCD stock and boosted the price target to $320 from $280, citing signs of improved comparable sales growth in the U.S. The analyst increased his third-quarter U.S. comps estimate to 0.5% compared to the previous estimate of a 2% decline.
Tarantino increased his EPS estimate as well, fueled by indications of improved trends in August and September following softness exiting Q2 and in early Q3. The analyst thinks that improvement in U.S. comps might have been driven by growing traction for the $5 Meal Deal, the Collector’s Meal promotion that was launched on Aug. 13 and reportedly sold out within one to two days, and easier comparison with the prior-year period.
While visibility outside the domestic market continues to be low due to macro challenges, Tarantino remains bullish on the stock, as he thinks that “MCD’s durable business model is positioned to produce relatively good results in a range of economic scenarios.”
Tarantino ranks No. 162 among more than 9,100 analysts tracked by TipRanks. His ratings have been successful 66% of the time, delivering an average return of 13.7%. (See McDonald’s Hedge Fund Activity on TipRanks)  More