Investing

Many members of the U.S. armed forces qualify for special tax breaks that aren’t available to other Americans.
Some of the key benefits include state residency flexibility, tax-exempt allowances, combat pay and more.

Bethany Petrik | Moment | Getty Images

Keep your state residency

Members of the military often move frequently, but many families save on state taxes via a special federal law, experts say.

Under the Servicemembers Civil Relief Act, state income tax is based on your “state of legal residence” during active duty, regardless of where you’re stationed. If eligible, it’s possible to keep that residency through your military career.
“Military members tend to have residency in states without an income tax,” such as Florida, Texas or Washington, said CFP Curtis Sheldon, who is also an enrolled agent at C.L. Sheldon and Company in Alexandria, Va. The firm specializes in working with active and retired military members. 

Tax-exempt ‘allowances’

Another unique benefit for service members is tax-exempt “allowances,” Sheldon said.
Generally, pay is taxable, whereas most allowances — such as funds for housing and food — are tax-exempt, he explained.
“They don’t get reported anywhere on the tax return,” and these items don’t show up on Form W-2, he said. “It’s something you have to keep track of yourself.”

Combat zone income tax exclusion

‘Stop the clock’ on capital gains 

When selling a primary residence, many homeowners can exclude a portion of profits from capital gains taxes. 
Generally, the limit is $250,000 for single filers or $500,000 for married couples filing jointly. But you must meet the “use test” by living in the home for two of the last five years before the sale.
That rule is suspended for members of the armed forces, Sheldon said: “You get to stop the clock.”
That means it’s still possible to qualify for the tax break, even without meeting the two-year use test, if you lived elsewhere while on “qualified official extended duty,” according to the IRS. 
JOIN the CNBC CFP® Circle for Mission: Money Management on April 1. This exclusive virtual roundtable, held in partnership with The Association of Military Spouse Entrepreneurs, will focus on how to best manage money effectively. Get your free ticket today! More

As the Trump administration seeks to overhaul federal programs, that has prompted new focus on Social Security’s future.
Some experts say privatizing the program could help provide better returns.

BlackRock CEO Larry Fink speaks during the New York Times DealBook Summit Nov. 30, 2022 in New York City. 
Michael M. Santiago | Getty Images News | Getty Images

President Donald Trump’s efforts to slash federal government spending has ignited a new debate about the future of Social Security.
One idea that has been brought up before — privatizing the now public program — is getting new attention.

At the BlackRock retirement summit in Washington, D.C., on Wednesday, CEO Larry Fink said he supports more individual ownership in Social Security, though he said he would not necessarily use the term privatizing because it has toxic connotations.
“The problem we have now, we have a plan called Social Security that doesn’t grow with the economy,” Fink said.
More from Personal Finance:Trump says Education Dept. shouldn’t handle student loansPotential cuts to Medicaid could include work requirementsRules for repaying Social Security benefits are getting stricter
Social Security is a pay-as-you-go system — today’s payroll tax contributions generally fund benefits for current retirees and other beneficiaries.
Any leftover money that is not used to either pay benefits or fund the program’s administrative costs is put into the program’s trust funds. That money is invested in special Treasury bonds that earn a market rate of interest and which are guaranteed by the U.S. government, according to the Social Security Administration.

Privatizing the program could provide a way to invest money on behalf of individual workers that potentially earns a higher return, according to supporters of the idea.
“If we create a plan that every American can grow with our economy, they’re going to feel more attached to our economy,” Fink said.

‘Real battle’ brewing over Social Security’s future

Opponents say that change could interfere with the safety and predictability of Social Security’s benefit payments.
“There’s a lot of people out there in the private sector that say, ‘You give me $2.7 trillion and let me invest that, and I can turn you a lot better, greater dividend around than the Treasury bills can,'” Rep. John Larson, D-Conn., said in an interview with CNBC.com at his Capitol Hill office on Tuesday.
While investing more aggressively provides the possibility for better returns, it also opens up the risk of poor performance and losses.
In 2008, the stock market dropped along with many people’s 401(k) plans, Larson said. Yet Social Security never missed a payment, he said.
Americans now face a decision as to whether they want capitalism or the government to guarantee their retirement, Larson said.
Larson believes the Trump administration’s goal is to privatize Social Security. When asked for comment, the White House referred CNBC to a new fact sheet issued this week affirming, “President Trump will always protect Social Security, Medicare.” That document does not mention privatizing the program.

House Ways and Means lawmakers on Wednesday voted to block a full House vote on a resolution of inquiry that Larson proposed to require disclosure of so-called Department of Government Efficiency activity at the Social Security Administration. At the hearing, Larson said he is concerned the Trump administration could try to privatize the program.
“We, I think, are in real battle here, and it’s really, in many respects, not unlike the battle that Roosevelt faced initially,” Larson told CNBC.com on Tuesday.

Privatizing Social Security has been considered before

The Social Security Act that created the program was signed into law by President Franklin D. Roosevelt in 1935.
The idea of privatizing the program was proposed in 2005 by President George W. Bush.
Had those efforts been successful, Americans would have seen their retirement money increase four-fold, based on the returns of the S&P 500 index over that time, Fink said.
“I think more Americans would be a little more hopeful today with their retirement savings than just getting that bond payment,” Fink said.
Had Bush’s proposals gone through, Americans “probably would have been” better off today, said Andrew Biggs, a senior fellow at the American Enterprise Institute who served as associate director of Bush’s White House National Economic Council in 2005.
But the question now as to whether to invest Americans’ retirement money in government bonds or equities is misguided, Biggs said.
If someone has not saved money for retirement, the dilemma of where to invest is not relevant since they do not have the funds, he said. The same is true of the federal government, which currently does not have a significant surplus for the pay-as-you-go program.

Moreover, if Social Security transitions to personalized accounts, there would also need to be extra money available to fund the transition costs to keep benefits going to current retirees, he said.
“It’s a question of saving more,” Biggs said.
Generally, Social Security reform discussions focus on making changes to improve the current system — raising taxes, cutting benefits or a combination of both.
Larson has a proposal to improve Social Security’s solvency by raising taxes on the wealthy while implementing benefit increases.
Yet it remains to be seen whether Republicans, who generally oppose tax increases, and Democrats, who do not want benefit cuts, can reach a bipartisan compromise.
Starting reform discussions based on the program’s current structure is limiting, Biggs said.
“We really do have a failure of imagination on Social Security reform,” Biggs said. “I think what Larry Fink is saying is, ‘Let’s think big on it.’ I think he’s absolutely correct on that point.” More

Democratic state attorneys general filed a lawsuit against the Trump administration over its termination of more than 1,300 Education Department staffers.
“The lay-offs are an effective dismantling of the Department,” the state AGs wrote.
As an agency authorized by Congress, the Education Department cannot be eliminated without congressional approval.

A security guard walks past the U.S. Department of Education headquarters in Washington, D.C., March 12, 2025.
Nathan Howard | Reuters

A group of Democratic state attorneys general filed a lawsuit against the Trump administration Thursday over its moves to dismantle the U.S. Department of Education and its termination of nearly half the agency’s staff.
Attorneys general from 20 states and the District of Columbia filed the legal challenge in response to the administration’s dismissal of more than 1,300 workers at the department.

“The lay-offs are an effective dismantling of the Department,” the state AGs wrote.
“[The] Department’s authority to administer [Reductions in Force] does not override Congress’s exclusive authority to abolish executive agencies or to discontinue their functions,” they added.
As an agency authorized by Congress, the Education Department cannot be eliminated without congressional approval. But in the meantime, the Trump administration can slowly starve it by cutting resources.
The defendants named in the lawsuit are President Donald Trump, Secretary of Education Linda McMahon and the U.S. Department of Education.
“President Trump was elected with a mandate from the American public to return education authority to the states,” said Madi Biedermann, deputy assistant secretary for Communications at the U.S. Department of Education.

More from Personal Finance:Here’s the inflation breakdown for February 2025 — in one chart’Volatility is part of the game’: What financial advisors are telling clientsWomen will get most of the $124 trillion ‘great wealth transfer’
On Tuesday, McMahon said on CNBC’s “Squawk Box” that efforts to dismantle the agency are “proceeding as expeditiously as possible.”
The Education Department manages the country’s more than $1.6 trillion student loan portfolio, provides funding for schools and ensures civil rights.
This is a developing story. Please check back for updates. More

As lawmakers debate President Donald Trump’s tax cuts, the federal deduction on state and local taxes, known as SALT, could become a sticking point.
Through 2025, residents who itemize tax breaks cannot deduct more than $10,000 in levies paid to state and local governments, including income and property taxes.
That could change amid tax negotiations with lawmakers from high-tax states like California, New Jersey and New York.

U.S. Representative Josh Gottheimer (D-NJ) speaks during a press conference about the SALT Caucus outside the United States Capitol on Wednesday February 08, 2023 in Washington, DC. 
Matt McClain | The Washington Post | Getty Images

As lawmakers debate President Donald Trump’s tax cuts, a key deduction could become a sticking point in 2025 tax negotiations, policy experts say.
Enacted via the Tax Cuts and Jobs Act, or TCJA, of 2017, there’s currently a $10,000 limit on the federal deduction on state and local taxes, known as SALT. Residents who itemize tax breaks cannot deduct more than $10,000 in levies paid to state and local governments, including income and property taxes.

That could change amid tax negotiations with lawmakers from high-tax states like California, New Jersey and New York.
Since 2018, the SALT cap has been a hot-button issue among certain lawmakers from those high-tax states. Before TCJA, the SALT deduction was unlimited, but the so-called alternative minimum tax reduced the benefit for some higher earners.
The TCJA SALT provision will expire after 2025 without action from Congress.
More from Personal Finance:Here’s the inflation breakdown for February 2025 — in one chart’Volatility is part of the game’: What financial advisors are telling clientsWomen will get most of the $124 trillion ‘great wealth transfer’
Although Trump enacted the $10,000 SALT cap in 2017, he reversed his position last year on the campaign trail, vowing to “get SALT back” if re-elected. He has renewed calls for reform since being sworn into office.

“I’d love to see something happen on SALT,” Trump said in a Fox News interview on Sunday. 
However, it’s unclear how the provision will ultimately change amid competing tax priorities and a limited budget. 
“The SALT cap is a major revenue raiser,” said Garrett Watson, director of policy analysis at the Tax Foundation. “That’s the balancing act.”

Trillions of dollars in tax breaks enacted via TCJA are scheduled to expire after 2025, including lower tax brackets, a bigger child tax credit and a 20% deduction for pass-through businesses, among others. 
Extending individual and estate tax provisions would reduce revenue by $3.9 trillion over the next decade, according to the Committee for a Responsible Federal Budget.
One SALT reform proposal, which aims to raise the SALT cap to $20,000 for married couples filing jointly, would further decrease revenue by $170 billion, the organization estimates.  
Other plans have called for a higher SALT deduction limit or raising the cap for taxpayers under a certain income threshold.

The budget is ‘too small’ for tax agenda

With control of both chambers of Congress, Republicans plan to use a process known as “reconciliation” to enact Trump’s tax agenda. Currently, the House Republicans’ budget blueprint authorizes $4.5 trillion in tax cuts through 2034, though it could change in Senate negotiations.
That’s an “almost unfathomably large number and somehow too small for the current agenda,” unless lawmakers include offsets to pay for the proposed tax cuts, said Andrew Lautz, associate director for the Bipartisan Policy Center’s economic policy program.
“If there is a major tax deal this year, it seems almost certain that SALT will be part of the discussion,” he said. More

The Social Security Administration recently announced plans to cut 7,000 employees and close some regional offices.
Those changes could impact the agency’s ability to process and disburse benefit checks, Democratic Sens. Elizabeth Warren of Massachusetts and Ron Wyden of Oregon warn.

Sen. Ron Wyden, D-Ore., and Sen. Elizabeth Warren, D-Mass., speak to reporters on Capitol Hill in Washington, D.C. 
The Washington Post | The Washington Post | Getty Images

Democratic Sens. Elizabeth Warren of Massachusetts and Ron Wyden of Oregon are warning Frank Bisignano, the nominee to lead the Social Security Administration, that he will be responsible if staff cuts interfere with the agency’s ability to process and disburse benefit checks.
President Donald Trump has nominated Bisignano, chief executive of payments and financial technology company Fiserv, to serve as commissioner of the agency, which is responsible for sending monthly benefit payments to more than 72 million Americans.

“As President Trump’s nominee for SSA Commissioner, you will be responsible if the Trump Administration’s attacks on the program result in failures or delays in getting Americans their Social Security checks — in other words, a backdoor cut to benefits,” Warren and Wyden wrote in a March 11 letter to Bisignano, shared exclusively with CNBC.
More from Personal Finance:Trump says Education Dept. shouldn’t handle student loansPotential cuts to Medicaid could include work requirementsRules for repaying Social Security benefits are getting stricter
Bisignano’s Senate confirmation hearing is expected to take place later this month, according to a source familiar with the situation.
In the interim, the agency is under the leadership of acting Commissioner Lee Dudek, who according to reports publicly stated before his appointment that he had been put on administrative leave after helping representatives of Elon Musk’s so-called Department of Government Efficiency. Dudek succeeded former acting Commissioner Michelle King, who stepped down following reported disagreements with DOGE over access to sensitive data.

The Social Security Administration recently announced plans to cut 7,000 employees and close regional offices.

“This would represent a reduction in workforce of over 10 percent and will have devastating impacts on the program,” Warren and Wyden wrote.
Social Security beneficiaries already may face longer wait times because of the changes, the senators wrote. If the agency seeks to reduce its staff further, “the results will be devastating,” Warren and Wyden wrote.
In the 1980s, smaller Social Security workforce cuts led to 80,000 Americans not receiving their benefits, the senators said.
The new cuts could prompt millions of Americans to miss out on the benefits they earned and limit the Social Security Administration’s ability to catch and correct payment errors, the Democratic leaders said.
“The net result could be a disaster: more overpayments and waste in the system, at the same time that Americans who have earned their Social Security benefits are unable to receive them,” the senators wrote.

In response, a Social Security Administration spokesperson told CNBC via email that improving Social Security services for all Americans is “our common goal.”
“We are identifying efficiencies and reducing costs, with a renewed focus on mission critical work for the American people,” the spokesperson wrote. “These steps prioritize customer service by streamlining redundant layers of management, reducing non-mission critical work, and potential reassignment of employees to customer service positions. SSA is committed to ensuring that all Americans can get the help they need whether that is in our field offices, telephone, or through automated solutions.”
While Trump has vowed not to touch Social Security benefits, he has said that he plans to target “waste, fraud and abuse” in entitlement programs.
The White House on Tuesday said Trump will “always protect” Social Security and Medicare.
“The Trump Administration will not cut Social Security, Medicare, or Medicaid benefits,” the White House stated in a fact-check statement.
The White House was not immediately available for further comment.
Bisignano did not respond to a request from CNBC for comment by press time.

Don’t miss these insights from CNBC PRO More

Selling a house involves much more than just putting up a “for sale” sign.
In addition to other things to consider, it’s important to get the right asking price, experts say.

Lifestylevisuals | E+ | Getty Images

Selling a house involves much more than just putting up a “for sale” sign.
In addition to some key things to consider — like knowing market conditions, preparing your home for showings and deciding whether to work with a real estate agent — it’s important to get the right asking price, according to Joel Berner, a senior economist at Realtor.com. 

Otherwise, your home is going to sit on the market for a long time, and eventually you will have to cut the price anyway, he said. 
“Getting the price right to start is really important,” Berner said. 
More from Personal Finance:Rules for repaying Social Security benefits are about to get stricterHere’s how rent can make or break your creditWhat potential FHA layoffs could mean for homebuyers
Zillow’s home trend expert Amanda Pendleton agreed, and said that homes that are well priced and marketed tend to sell in a matter of weeks comparted with homes that miss on the right asking pricing. Those can linger on the market for two months or more, she said. 
Here’s what to consider if you are looking to sell your home, according to experts. 

What’s happening in the housing market

Home sale listings have been picking up this year. This can create a more competitive environment for home sellers as buyers will have more options to choose from, Berner said.
For the week ending March 1, new listings increased 0.1% compared to the week prior, growing for the eighth consecutive week, Realtor.com found. In February, for-sale inventory was up 27.5% from a year prior, per the site’s monthly housing report. 

Meanwhile, sellers have been forced to drop home prices while homes sit on the market for longer. The average time a listing spends on the market is up to 66 days, five more days than last February and the highest since February 2020.
In February, Realtor.com’s monthly report indicated that 16.8% of listings had price reductions, a 2.2 percentage point increase compared to last year, and the highest February activity since 2021.
A January report from the National Association of Realtors indicated a decrease in homes sold above asking price (15% vs. 16% the previous month and year). Meanwhile, homes listed got an average of 2.6 offers from buyers, up from 2.1 a month before but flat from 2.7 a year ago.
It’s not the same seller’s market from the past few years, said Jessica Lautz, deputy chief economist at the National Association of Realtors.

How to get the price right

To get an accurate sense of your property’s value and determine a reasonable listing price, Berner urges home sellers to research recent sales of comparable homes, and focus on properties similar in size, amenities and condition.
To ensure you don’t undersell your home, determine how much equity you need from the sale to cover the down payment, closing costs and moving expenses for your next home, Berner said.
“If you’re really afraid of underselling and have the option to not list your home, then maybe that’s going to be the right option,” Berner said.

For a general idea of your home’s value, online home price estimators, also known as automated valuation models, can be helpful. Such tools use algorithms and publicly available data to estimate a property’s worth, according to Bankrate.
But keep in mind that the estimate might be helpful only for a ball-park figure, experts caution. AVMs rely on public records, and if they haven’t been updated yet, the data might not reflect renovations or changes to the home, Bankrate noted.
A professional home appraiser or a real estate agent will be able to come into your home and look at any upgrades that you’ve made and provide a more detailed evaluation, Lautz said.
“Hire an experienced local agent who’s going to know your neighborhood like the back of their hand,” Pendleton said. More

Eighty-five percent of survey respondents deemed Elon Musk’s political involvement as “negative” or “extremely negative” for Tesla, Morgan Stanley found.
The survey comes amid growing concern about Tesla as Musk’s political profile rises and shares tumble.

U.S. President Donald Trump talks to the media, next to Tesla CEO Elon Musk with his son X Æ A-12, at the White House in Washington, D.C., U.S., March 11, 2025. 
Kevin Lamarque | Reuters

More than eight out of every 10 respondents to a Morgan Stanley survey believe Tesla CEO Elon Musk’s controversial political activities are hurting his business.
In total, 85% of the 245 participants polled by the firm believe Musk’s foray into politics has either had a “negative” or “extremely negative” impact on business fundamentals. The majority of respondents also expect Tesla deliveries to fall this year, according to the survey.

While a small sampling, these results offer the latest sign of mounting frustration with the billionaire entrepreneur as he’s become a rising figure in international and American politics. It also comes at a pivotal point for Tesla’s stock, with shares plunging nearly 40% this year.
When asked about Musk’s efforts with U.S. government efficiency and other political activities, 45% of respondents said these actions had a “negative” effect on the company. Another 40% said they were having an “extremely negative” impact.
On the other hand, 3% said they were “positive” for the business. Meanwhile, 12% called them “insignificant.”
To be sure, Morgan Stanley analyst Adam Jonas reported that his survey respondents are drawn from his email distribution list and should not be taken as a random representative sample. He also noted that the respondents are not necessarily owners of Tesla stock. The survey was taken over a 17-hour period, starting on Tuesday afternoon.
Jonas also asked about expectations for the company’s performance. In a separate question, 59% said they anticipated Tesla would deliver fewer cars to customers in 2025 compared with the prior year. What’s more, 21% of total respondents said they expected a decline of more than 10%. That comes as some analysts have raised alarm that recent reports of vandalism could spook potential customers.

Just 19% of responders said they forecasted deliveries to rise in 2025, while another 23% said they would be flat between the two years.
Musk’s political profile has grown after his public support of President Donald Trump in the runup up to last year’s election and his subsequent role leading the Department of Government Efficiency, or DOGE. The Tesla executive’s efforts to slash the federal government’s spending and workforce has drawn the ire of critics who see his team as working too quickly and haphazardly.
Musk acknowledged in an interview with Fox Business on Monday that his high-profile role in Trump’s administration meant he was running his businesses, which also include X and SpaceX, “with great difficulty.” That day, Tesla shares tumbled more than 15% for their worst session since 2020.

Stock chart icon

Tesla in 2025

Despite the recent nosedive, 45% of respondents said they anticipate Tesla shares will be at least 11% higher by the end of the calendar year. Around 36% expect the stock to tumble another 11% or further by year-end, while 19% see the stock staying within 10% of its price around $220.
After a New York Times report last week unearthed criticisms of Musk’s team from members of Trump’s cabinet, the president offered a vote of confidence on Tuesday. Trump evaluated five Tesla vehicles parked at the White House after the president said on social media that he would buy one as a symbol of support.
Trump also said he would declare violence at Tesla dealerships to be acts of domestic terrorism.

Don’t miss these insights from CNBC PRO More

An estimated $124 trillion will change hands by 2048 as part of the greatest generational wealth transfer in history.
Women stand to benefit disproportionately, studies show.
Here are a few key considerations to help prepare.

Women’s prosperity is on the rise

Women have historically lagged in financial resources and opportunity, largely due to a persistent gender wage gap. Women today still earn only 80% of what their male counterparts do. 
However, women are achieving increasing levels of education and working as much, if not more, than their male counterparts, which has resulted in rising wages and greater representation in senior leadership positions.
“Increased wage gains, coupled with the ‘great wealth transfer,’ position women to be key drivers of economic growth,” Bank of America Institute’s report said. And, “as wealth increases, women’s prosperity will help to ‘grow the pie’ of total affluence.”

By 2030, roughly two-thirds of the private wealth in the U.S. will be held by women — which will be the largest wealth transfer by gender in history, according to a separate research report by McKinsey.  
For that reason, the money that is being passed down can create a safety net that didn’t previously exist for women, according to Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida.
“You can’t bank on it 100%, but that can ease the pressure,” said McClanahan, who also is a member of CNBC’s Advisor Council.

How to navigate the wealth transfer

There are a few key considerations to help women better prepare for the greatest generational wealth transfer in history, according to Christa O’Brien, a financial advisor at Northwestern Mutual.
Have the conversation: “Many often forget to consider the downsides that are associated with wealth transfers if they don’t have a plan in place,” O’Brien said. For example, if the individual who passed did not have life insurance, long-term care or supplemental disability insurance, there may also be debts left behind that can erode the inheritance.
“That’s why it’s important to plan early and make sure all beneficiaries are part of financial planning conversations with trusted advisors,” she said.
Where you live matters: “Whether it’s an inherited 401(k), a life insurance payout or liquid assets transferring to your name, there are implications on how much you should take out, and when,” O’Brien said. Everyone’s situation and the way they plan is different, she said, but the common goal is to lessen the future tax liability and spare your own heirs much larger bills. 
Plan for longevity: Women live almost six years longer than men, on average, and given longer life expectancies, women should consider strategies that ensure their savings last longer, such as delaying Social Security benefits to increase monthly payouts. 
That makes it even more important to start working with a financial advisor on a long-term investment strategy as well as buying long-term care insurance for yourself, O’Brien said. By doing so, “when the next wealth transfer takes place, you’re setting that beneficiary up for greater financial success,” she said.
Build financial security: Not only do women have smaller nest eggs than men, but they also tend to invest more conservatively. Think about ways you may be able to grow cash or assets through options like a high-yield savings account, Roth individual retirement account or money market account, O’Brien said, depending on your time frame.
“As important as it is to invest to grow your money, consider being a little more aggressive with money you don’t need right now and less aggressive with money you might need,” O’Brien said. 
Be aware of financial scams: Financial scams are a grave and growing threat to consumers’ financial security, and more often older adults and women are targeted. For them, the financial blow can be especially devastating.
“To protect yourself from fraud, be cautious when sharing information with unknown sources and verify credibility before making financial decisions,” O’Brien said. 
Subscribe to CNBC on YouTube. More