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President Joe Biden and former President Donald Trump will face off Thursday in the first presidential debate of the 2024 general election.
The biggest tax issue is expiring provisions from the Tax Cuts and Jobs Act, or TCJA, of 2017 and how to pay for extensions.
More than 60% of tax filers could face increased taxes in 2026 if TCJA provisions sunset, according to the Tax Foundation.   

Joe Biden and Donald Trump 2024
Brendan Smialowski | Jon Cherry | Getty Images

President Joe Biden and former President Donald Trump will face off Thursday in the first presidential debate of the 2024 general election — and the presumptive nominees could show voters where they stand on tax policy, experts say.
One key issue is the Republicans’ expiring tax breaks enacted via the Tax Cuts and Jobs Act of 2017, or TCJA. Without action from Congress, several provisions will sunset after 2025, including lower federal income tax brackets, a boosted child tax credit and higher estate and gift tax exemptions, among others.

More than 60% of tax filers could face increased taxes in 2026 if TCJA provisions expire, according to the Tax Foundation.   
Andrew Lautz, associate director for the Bipartisan Policy Center’s economic policy program, said he’s looking for Biden and Trump to “move beyond some of the political rhetoric” to discuss how they plan to address next year’s TCJA expirations.
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Although both campaigns want to renew TCJA provisions for most Americans, questions remain about the cost of those extensions, particularly amid the federal budget deficit.
Fully extending TCJA provisions could add an estimated $4.6 trillion to the deficit over the next decade, the Congressional Budget Office reported in May.

Trump is a ‘wild card’ on tax policy 

After yearly budget proposals to Congress, there will be “very few surprises from the Biden tax agenda,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.
“He repeats it every year, and he’s promised to pursue that which has not been enacted, which is most of it,” Rosenthal said.
Biden wants higher taxes on the ultra-wealthy and corporations to fund TCJA extensions for those making less than $400,000 only.

In his fiscal year 2025 budget, Biden called for increasing the top individual income tax rate on earnings above $400,000, bumping capital gains to regular income tax rates for households making more than $1 million and a 25% minimum tax on wealth exceeding $100 million.
However, the future of these proposals is unclear with control of Congress uncertain.
“Trump is the wild card,” Rosenthal said. “It’s hard to say how serious he is about some of these ideas he just throws out there.”
So far, Trump has said he aims to fully extend expiring TCJA provisions and has voiced support for tariffs, which are taxes levied on imported goods. Trump has also floated eliminating taxes on workers’ tips and an “all tariff policy” to get rid of the income tax.

The ‘economic reality’ of tariffs

The debate could also address Trump’s and Biden’s policies on tariffs, which both candidates have supported to varying degrees, according to Erica York, senior economist and research director at the Tax Foundation’s Center for Federal Tax Policy.

“We know the economic reality,” she said. “[Tariffs] cost American businesses. They create a disadvantage for our firms trying to compete across the globe because they increase input costs here.”
During his term, Trump added tariffs on China, Mexico, the European Union and others. Many of the tariffs on China have remained in place under the Biden administration. More

Asking rents for one- and two-bedroom apartments are up more than 10% in some large U.S. cities since June 2023, according to Zumper.
They include Syracuse, New York; Lincoln, Nebraska; Chicago; Buffalo, New York; Madison, Wisconsin; Rochester, New York; and New York City.
Meanwhile, prices fell by at least 5% in other major cities.
Rent inflation is guided by apartment supply and renter demand.

Tourists walk through a park in Chicago, on May 26, 2024.  
Jamie Kelter Davis/Bloomberg via Getty Images

Many major U.S. cities have seen apartment prices soar in the past year, even as the typical American has seen pandemic-era rent inflation cool substantially.
For example, renters in Syracuse, New York, saw monthly rents for one- and two-bedroom apartments on the market jump the most relative to other big cities: by 29% and 25%, respectively, since June 2023, according to data in Zumper’s National Rent Report.

Zumper analyzed median asking rents for apartment listings in the largest 100 U.S. cities by population.
Rents have also risen by at least 10% for both one- and two-bedroom apartments in other major metros: Lincoln, Nebraska; Chicago; Buffalo, New York; Madison, Wisconsin; Rochester, New York; and New York City, according to Zumper.

Conversely, renters in other cities are seeing relief.
Asking rents for one-bedroom apartments have declined by at least 5% in Oakland, California; Memphis and Chattanooga, Tennessee; Cincinnati, Ohio; Colorado Springs, Colorado; Irving, Texas; Jacksonville, Florida; and Raleigh, Greensboro and Durham, North Carolina, according to the analysis.

By comparison, national prices overall for one- and two-bedroom apartments are up 1.5% and 2.1%, respectively, since June 2023, Zumper found.

New York is the most expensive metro for renters: The typical renter pays $4,300 a month for a one-bedroom apartment, it found.
By comparison, in Akron, Ohio, and Wichita, Kansas — which tied for the lowest big-city rents — renters pay $730 a month for a one-bedroom apartment.

What causes rent inflation

At a high level, rent inflation is guided by supply-and-demand dynamics, said Crystal Chen, an analyst who authored the Zumper analysis.
Basically, areas with fast-growing rents are seeing demand outstrip the supply of available apartments, while those with falling rents have seen their apartment inventories growing.
For example, the apartment vacancy rate in New York City recently dropped to 1.4%, a historic low dating to the 1960s, according to the New York City Department of Housing Preservation and Development. The vacancy rate “nosedived” from 4.5% just two years ago, the agency said.
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“The data is clear, the demand to live in our city is far outpacing our ability to build housing,” New York City Mayor Eric Adams said in a statement about the vacancy rate.
Swelling rents can present financial challenges for households.
In May, a typical renter would have spent almost 30% of their income on a new rental, according to Zillow.
While down from a recent peak near 31% in June 2022, it exceeds the roughly 28% that was common before the pandemic, according to Zillow data.

About 86% of New York City residents with the lowest income (less than $25,000 a year) are severely rent burdened, according to the New York City Department of Housing Preservation and Development. An increase in financial strain has caused “an alarming increase in missed rent payments and arrears” relative to 2021, it said.
High rents can have other cascading impacts.
For example, they may limit the ability of prospective homebuyers to save for a down payment, “keeping them on the sidelines of the housing market,” Fitch said in a global housing outlook.

Rent inflation has fallen substantially

Rent inflation plummeted in the early days of the Covid-19 pandemic.
“Pretty much everyone” sheltered in place during the health crisis, and digital nomads who no longer had to work in a physical office left cities in favor of the suburbs and outdoor spaces, Chen said.

However, rents spiked through 2022 and into 2023 amid return-to-office policies and as people moved back to bigger cities, Chen said.
Annual rent inflation largely hovered between 3% and 4% the the years leading up to the pandemic, and peaked around 9% in early 2023, according to the consumer price index. It has gradually cooled since then, to about 5% in May, according to consumer price index data. More

Due to a backlog of 1.4 million unprocessed employee retention credit claims, the national taxpayer advocate is urging the IRS to expedite legitimate filings.
Enacted to support small businesses during the Covid-19 pandemic, the ERC is worth thousands per eligible employee.
But after a wave of “questionable claims,” the IRS stopped processing new ERC claims in September, and nearly all filings sent before the moratorium remain unworked.

Erin Collins, national taxpayer advocate at the Taxpayer Advocate Service, speaks at a Senate Appropriations subcommittee hearing in Washington, D.C., on May 19, 2021.
Bloomberg | Bloomberg | Getty Images

Many taxpayers are experiencing “long delays and uncertainty” amid a backlog of roughly 1.4 million pandemic-era small business tax credit claims, according to the national taxpayer advocate.
Enacted to support small businesses during the Covid-19 pandemic, the employee retention credit, or ERC, is worth thousands of dollars per eligible employee. After a wave of “questionable claims,” the IRS stopped processing new filings in September.

But prolonged processing delays by the IRS are “harming taxpayers with valid ERC claims,” as many have already waited a year or longer, National Taxpayer Advocate Erin Collins wrote in her midyear report to Congress.
“It’s time for the IRS to be transparent on how and when it plans to move forward addressing these ERC claims,” she wrote.
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There was a backlog of nearly 666,000 unworked ERC claims before the September moratorium, and nearly all filings sent before the moratorium remain unprocessed, according to the report. Some 85% of pending ERC claims are more than 120 days old.
“The IRS is between the proverbial rock and a hard place when it comes to ERC claims,” Collins said in a statement.

Without a thorough review, improper ERC payments could cost tens of billions of dollars. But if the IRS denies ERC claims and further delays payments, “the very businesses for which Congress created the ERC will be harmed again,” she said.
In the coming weeks, Collins said she aims to work with IRS leadership to accelerate ERC processing of eligible claims, including several thousands of pending cases with the Taxpayer Advocate Service.

Her report comes less than one week since the IRS announced it would deny billions of dollars’ worth of “improper” ERC claims while prioritizing lower-risk filings.
“This is one of the most complex credits the IRS has administered, and we continue to ask taxpayers for patience as we unravel this complex process,” IRS Commissioner Danny Werfel said in a statement. “Ultimately, this period will help us protect taxpayers against improper payouts that flooded the system and get checks to those truly eligible.”

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Around 8 million borrowers have signed up for SAVE, the new income-driven repayment plan.
Just days before millions of student loan borrowers expected to see their monthly bill drop by a half or more, two federal judges halted the Biden administration’s relief plan.
Borrowers can stay enrolled in the SAVE plan for now, but here’s what borrowers need to know.

U.S. President Joe Biden is joined by Education Secretary Miguel Cardona (L) as he announces new actions to protect borrowers after the Supreme Court struck down his student loan forgiveness plan in the Roosevelt Room at the White House on June 30, 2023 in Washington, DC. 
Chip Somodevilla | Getty Images News | Getty Images

Cody Gude was counting the seconds until July when his monthly student loan payment was scheduled to drop to $100 from $200.
The lower payment meant that he would no longer need to deliver groceries on Instacart in his spare time, on top of his work as a social media consultant.

“I could breathe,” the 35-year-old Tampa, Florida, resident said.
But then he saw headlines on Monday that major parts of the Saving on a Valuable Education, or SAVE, plan were on pause. Two federal judges in Kansas and Missouri temporarily halted the Biden administration’s new repayment plan until they rule on the cases.
The U.S. Department of Justice is expected to appeal the preliminary injunctions, but for now, millions of student loan borrowers are disappointed and angry that they won’t see the relief they expected in just a matter of days.
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There’s a great deal of confusion as well.

Gude’s student loan servicer, Nelnet, already updated his monthly bill to reflect the lower amount. (Under SAVE, many borrowers pay just 5% of their discretionary income toward their debt each month instead of the previous 10% requirement, and millions of borrowers have a $0 monthly payment.)
“So am I actually going to have that payment, or are they going to send me a letter saying, ‘Ha! We’re just kidding,'” Gude said. “Everyone is in the dark.”
Here’s what we know so far.

Why is the SAVE plan causing drama?

President Joe Biden last summer rolled out the SAVE plan, describing it as “the most affordable student loan plan ever.” So far, around 8 million borrowers have signed up for the new income-driven repayment plan, according to the White House.
Under IDR plans, borrowers pay a share of their discretionary income each month and receive forgiveness after a set period, typically 20 years or 25 years. SAVE replaced the U.S. Department of Education’s former REPAYE option, or Revised Pay As You Earn plan.
The SAVE plan has the most generous terms to date, which has led to the current controversy.
Instead of paying 10% of their discretionary income a month toward their undergraduate student debt under REPAYE, borrowers need to pay just 5%.
Those who earn less than $15 an hour have a $0 monthly bill, and borrowers with smaller balances are entitled to loan forgiveness in as little as 10 years.
“The SAVE plan is very generous to borrowers, almost like a grant after the fact,” said higher education expert Mark Kantrowitz.

Due to the timeline of regulatory changes, the SAVE plan wasn’t scheduled to fully take effect until July 1, although some features were already available to borrowers.
By mid-April, 360,000 borrowers received $4.8 billion in debt relief under the plan, the Education Department reported.

What did the judges decide?

The federal judges responded to lawsuits against the SAVE plan filed earlier this year by Republican-led states, including Florida, Arkansas and Missouri.
The states argued that the Biden administration was overstepping its authority with SAVE, and essentially trying to find a roundabout way to forgive student debt after the Supreme Court blocked its sweeping plan last year.
The federal judge in Kansas, Daniel Crabtree, declined to unwind features of the SAVE plan already in effect “because plaintiffs have failed to demonstrate those provisions caused irreparable harm” since they’d brought the lawsuit “long after defendants already had implemented those aspects of the SAVE Plan.”

However, Crabtree agreed to halt the Education Department from implementing the SAVE provision that dramatically lowers borrowers’ monthly payments come July. Crabtree pointed out that the REPAYE plan, which SAVE replaced, “cost an estimated $15.4 billion.” The SAVE plan, meanwhile, is expected to cost $475 billion over the next decade.
“This difference — $475 billion versus $15.4 billion — expands agency authority to such an extent that it alters it,” Crabtree wrote. “So, the court concludes that the SAVE Plan represents ‘an enormous and transformative expansion in regulatory authority without clear congressional authorization.'”
Meanwhile in Missouri, Judge John Ross prevented the Biden administration from forgiving any more student debt under the SAVE program until he reaches a decision on the case. Ross agreed with the states that the relief plan would likely reduce the fees the government pays to the Missouri Higher Education Loan Authority, or Mohela, for servicing its federal student loans.
So, the key question is: How long can this legal case take?
“Months, I suspect, past [the] election,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.
Buchanan assumes the cases will eventually reach the Supreme Court, “then they themselves wouldn’t even take it up until the October term, for a ruling much later.”

In the meantime, what do borrowers do?

Borrowers can stay enrolled in the SAVE plan for now, and many are still benefiting from lower bills already. (The judges didn’t pause the provision shielding a higher share of borrowers’ income from their payment calculation.)
Even if your servicer updated your monthly bill to what it was going to be before the preliminary injunctions, your required payment should soon revert back to its June level, experts say.
“The court’s ruling is not retroactive,” Kantrowitz added. “So, borrowers do not have to worry about the courts clawing back the forgiveness they have already received.”
Correction: Judge Ross agreed with the states that the relief plan would likely reduce the fees the government pays to the Missouri Higher Education Loan Authority, or Mohela, for servicing its federal student loans. An earlier version misstated the name of the agency.

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Prepare to feel the impact of “funflation” this summer.
Admission prices for sporting events, movies, theaters and concerts are up year over year.
Despite the rising cost, consumers are increasingly willing to go into debt for travel and entertainment, several studies show.

Taylor Swift fans queue outside Murrayfield Stadium in Edinburgh, Scotland, on June 6, 2024. Her fans, known as Swifties, had made the superstar $200 million in Eras merchandise sales as of November 2023.
Jeff J Mitchell | Getty Images News | Getty Images

The price of ‘funflation’

Some ticket prices have surged in recent months, according to federal data.
Admission prices for sporting events jumped 21.7% in May 2024 from a year earlier, according to the Bureau of Labor Statistics’ consumer price index data. The category saw the highest annualized inflation rate out of the few hundred that make up the inflation gauge. Admission to movies, theaters, and concerts rose a relatively modest 3% on an annualized basis.
The CPI as a whole was up 3.3% in May from a year ago. The index gauges how fast prices are changing across the U.S. economy. It measures everything from haircuts to household appliances.

Why Americans go all out on entertainment

Despite rising costs, 38% of adults said they plan to take on more debt to travel, dine out and see live entertainment in the months ahead, according to a report by Bankrate.
Meanwhile, 27% of those surveyed said they would go into debt to travel this year, while 14% would dip into the red to dine out and another 13% would lean on credit to go to the theater, see a live sporting event or attend a concert — including the European leg of Taylor Swift’s Eras Tour, Bankrate found.

Taylor Swift performs on stage at Wembley Stadium in London on June 22, 2024.
Kevin Mazur | Getty Images Entertainment | Getty Images

“There’s still a lot of demand for out-of-home entertainment,” Ted Rossman, senior industry analyst at Bankrate, recently told CNBC.
“Some of that reflects a ‘you only live once’ mentality that intensified during the pandemic, and some of that is because many economic indicators — including GDP growth and the unemployment rate — are in favorable shape,” Rossman said.
Younger adults, particularly Generation Z and millennials, were more likely to splurge on those discretionary purchases, Bankrate found.

Although an increased cost of living has made it particularly hard for those just starting out, young adults are taking a more relaxed approach to their long-term financial security, other research shows.
Nearly two out of five Gen Z and millennial travelers have spent up to $5,000 on tickets alone for destination live events, a recent study from Bread Financial found.
And many say it’s well worth it. Rather than cut expenses to boost savings, 73% of Gen Zers between the ages of 18 and 25 said they would ultimately rather have a better quality of life than extra money in the bank, according to another Prosperity Index report by Intuit. 
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Many workers are at risk of not having enough savings in retirement.
Others are working to accumulate balances that far exceed their peers.
Here’s what so-called “super savers” do differently.

Hispanolistic | E+ | Getty Images

A retirement savings crisis is looming for people who have 401(k) plans and other retirement balances woefully short of what they will need to live on.
But some workers — called “super savers” — are managing to successfully grow their retirement nest eggs.

Super savers are workers who are putting away more than 10% of their salaries toward their retirement plans, according to new research from nonprofit Transamerica Institute and its division Transamerica Center for Retirement Studies.
More than half of workers — 56% — are saving 10% or less, according to a 2023 Transamerica study that surveyed more than 5,700 U.S. workers.
The rest, 44%, have reached super saver status — with 15% of workers putting 11% to 15% of their annual pay toward retirement, Transamerica said. Meanwhile, 29% are contributing more than 15%. Transamerica said it asked those surveyed to indicate what percentage of their salary they were contributing, and told CNBC it is not clear if respondents included company contributions in their answer.
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Super savers can be of any age. Notably, the youngest cohort — Generation Z — has the most super savers, with 53%, followed by millennials and baby boomers, each with 44%, and Generation X, with 40%.

But accumulating large retirement balances takes time.
“I always tell people there’s no microwave millionaires,” said Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta.
To reach $1 million in a 401(k), it often takes a high contribution rate that is sustained over many years, said Jenkin, who is a member of the CNBC Financial Advisor Council.

How retirement savings balances compare

Currently, 401(k) savers can generally contribute up to $23,000 this year, or $30,500 if they are 50 and over. High earners may be able to set aside even more, if their retirement plan allows it.
Those limits are adjusted each year. In 2023, 401(k) savers could save up to $22,500 — or $30,000 for those 50 and up.
New research from Vanguard finds 14% of the firm’s defined contribution clients reached those maximums in 2023. Those savers typically had higher incomes. More than half of participants — 53% — with incomes over $150,000 contributed the maximum.
Those who reached the limits also tended to be older — with 1 in 6 participants over 65 reaching the maximum savings thresholds, according to Vanguard.

Maximum retirement savers also typically have been with their employers for longer and had higher account balances, according to Vanguard. Almost half — 45% — of those participants had account balances over $250,000.
Savers who have $250,000 or more are more likely to be older, according to Transamerica’s research, with 44% of baby boomers having reached that savings level, followed by 33% of Gen Xers, 24% of millennials, and 16% of Gen Zers.
A smaller portion of savers had reached the $1 million mark — including 16% of baby boomers, 9% of Gen Xers, 4% of millennials and 4% of Gen Zers, Transamerica said.
Because the study asked for total household retirement savings, savers who say they reached that threshold may also be including balances accumulated by someone else, noted Catherine Collinson, founding CEO and president of Transamerica Institute and Transamerica Center for Retirement Studies.

What to focus on to achieve ‘super saver’ status

To become a super saver, experts say, it’s generally best to focus on your savings rate rather than your account balances.
Recent data shows savers are making progress.
Fidelity found that the average total 401(k) savings rate in its plans rose to 14.2% during the first quarter of 2024, based on employee and employer contributions — the closest it has ever been to the firm’s recommended 15% savings rate.
In 2023, Vanguard found that the average combined savings rate in its plans was an estimated 11.7%, matching a record high from 2022.

About 60% of employees in automatic enrollment plans are enrolled at deferral rates of 4% or higher, according to Vanguard. Automatic annual savings increases help drive that rate higher.
But it takes time for workers to get to the optimal 15% target. Often, knowing to strive for that savings rate — and more — comes informally through word of mouth.
“If they have a financial mentor, a family member or a friend who has taught them about the importance of saving, that also has a huge impact on their focus on saving,” Collinson said.
Having an example may also help those savers better manage other aspects of their financial lives, such as budgeting, spending, increasing their earning potential or seeking higher-paying jobs or careers, Collinson said.
Optimally, 401(k) savers should strive to increase their savings rate by 1% per year until they hit that target, according to Jenkin.
The biggest rule Jenkin says he emphasizes with clients is what he calls the rule of thirds. Whenever you receive a pay raise or bonus, one-third will generally go to taxes, while one-third should go to increasing your savings and investments and the remaining one-third should go to fun, he said.
“That’s your opportunity to not let lifestyle inflation get in the way,” Jenkin said. “Otherwise, the money is going to fall into a black hole.” More

Nearly 1 in 5 student loan borrowers in the U.S. — or 19% — say they are hiding their debt balance from their partner, according to a recent report.
Shame, guilt, depression and anxiety swirling around the topic of student debt can lead people to keep secrets, therapists say.
Yet professionals recommend coming clean as soon as possible to salve your conscience, protect your loved one from financial risk and improve your relationship.

Morsa Images | Digitalvision | Getty Images

It’s no secret that many college graduates are struggling with student loan debt. Still, many borrowers aren’t talking about their loans with their significant other.
Nearly 1 in 5 student loan borrowers in the U.S. — or 19% — say they are hiding their loan balance from their partner, according to a new report from NerdWallet. The personal finance site and The Harris Poll surveyed 2,098 adults in early May.

Shame, guilt, depression and anxiety swirling around the topic of student debt can lead borrowers to withhold the details of their loans, therapists say. Yet professionals recommend coming clean as soon as possible to salve your conscience, protect your loved one from financial risk and improve your relationship.
“In our society, we collectively acknowledge the price tag and benefits of higher education, and it is also considered shameful to have debt,” said Traci Williams, a clinical psychologist and certified financial therapist in East Point, Georgia. “This creates complex emotions for graduates who celebrate their success, while silently worrying over their loans.”
Outstanding education debt in the U.S. stands at roughly $1.6 trillion, and burdens Americans more than credit card or auto debt.
The average loan balance at graduation is around $30,000.

Student debt and power imbalances

Most people were never taught how to speak about money, said New York-based licensed clinical social worker Clay Cockrell. If your significant other doesn’t also have outstanding student debt, the topic can feel especially taboo, he added.

“Now we are talking about a power imbalance of someone who comes from wealth versus someone who had to use loans to get their education,” Cockrell said.
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But despite the shame that often accompanies debt, being open and honest with your partner is the key to a healthy romantic relationship, therapists say.
“By keeping your debt, or financial history, in general, secret, you are being disingenuous to your partner and ultimately putting them at risk, too,” Cockrell said.
Student debt can make it harder to buy a house, start a family and save for the future, research shows.

How to talk about student debt with your partner

The first step to coming clean with your partner about your debt is to be kind with yourself, said NerdWallet loans expert Kate Wood.
“This wasn’t you going on an ill-advised spree with a credit card — you were funding your education,” Wood said. “By dealing with the debt — and being open about it — you’re taking responsibility. These aren’t red flags.”
If you’re in a supportive relationship, your partner will want to help you more than cast blame, she said.
“If you’re mostly worried about feeling embarrassed or like you’ve made a mistake, remember that this is someone that you love and trust,” Wood said. “You shouldn’t need to hide from them.”

When you feel ready to open up about your loans, be thoughtful about timing and location, Williams said. Picking a calm, quiet space when you are both able to focus is ideal, she said.
You can begin the conversation by sharing a little about why you’ve kept the details of your debt a secret, and how you’ve been worried about their reaction to the news, therapists say. They also recommend apologizing and using “I” statements, such as “I felt” or “I thought,” rather than using your partner as an excuse.
After revealing the truth, your partner will likely want to hear how you plan to pay off your student debt, so therapists recommend having that information at the ready.
“When considering sharing sensitive information, such as your secret debts, remind yourself that your partner cares about you and is likely to want to support you,” Williams said.
In unhealthy or abusive relationships, someone may withhold certain information as a self-protection strategy, Wood said. There are resources available if you’re experiencing any kind of abuse, including financial mistreatment, like the anonymous National Domestic Violence Hotline.
If you or someone you know is experiencing domestic violence or the threat of domestic violence, call the National Domestic Violence Hotline for help at 1-800-799-SAFE (7233), or go to www.thehotline.org for anonymous, confidential online chats, available in English and Spanish. Individual states often have their own domestic violence hotlines as well.Advocates at the National Domestic Violence Hotline field calls from survivors of domestic violence as well as individuals who are concerned that they may be abusive toward their partners.

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If you’re nearing retirement with a large pre-tax 401(k) plan or individual retirement account balance, you need a plan for managing future levies, experts say.
With required withdrawals approaching, great savers could face a “tax time bomb” in retirement, said Scott Bishop, partner and managing director of Presidio Wealth Partners.
Only 3 in 10 Americans have a plan to reduce taxes on retirement savings, according to a January study from Northwestern Mutual.

Vladimir Vladimirov | E+ | Getty Images

If you’re nearing retirement with a large pre-tax 401(k) plan or individual retirement account balance, you need a plan for managing future levies, financial experts say.
Great savers could face a “tax time bomb” in retirement when required withdrawals kick in, said certified financial planner Scott Bishop, partner and managing director of Presidio Wealth Partners in Houston.

Starting in 2023, Secure 2.0, a $1.7 trillion legislative package signed by President Joe Biden in December 2022, raised the age that savers must start taking required minimum distributions, or RMDs, to 73. RMDs are typically tied to pre-tax retirement accounts, which incur regular income taxes for withdrawals.
Those RMDs could push some retirees into a higher tax bracket, according to Bishop, who is also a certified public accountant.
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Plus, the Tax Cuts and Jobs Act of 2017 temporarily reduced federal income tax brackets, with the top rate falling to 37% from 39.6%. Those lower rates are scheduled to sunset after 2025 without an extension from Congress.

Meanwhile, only three in 10 Americans have a plan to reduce taxes on retirement savings, according to a January 2024 study of roughly 4,600 U.S. adults from Northwestern Mutual.

However, once retirees reach age 59½, there’s no longer a penalty on most withdrawals from IRAs, which could offer tax planning opportunities, Bishop said.
Here are some key tax planning strategies to consider before RMDs begin.

Weigh ‘partial Roth conversions’

“The most obvious strategy is partial Roth conversions at lower tax rates,” said CFP George Gagliardi, founder of Coromandel Wealth Management in Lexington, Massachusetts.
Roth conversions transfer pretax or nondeductible IRA money to a Roth IRA, which begins tax-free future growth. But you’ll owe regular income taxes on the converted balance in the year you make the conversion.

The temporary 22% and 24% federal income tax brackets “offer the best opportunity” to convert large pretax balances to Roth IRA, Gagliardi said. Without action from Congress, those rates will revert to 25% and 28%.

Withdraw retirement funds sooner

If you retire around age 59½ and you’re in a lower tax bracket, you could also consider withdrawing pretax retirement funds sooner, said Bishop. Typically, investors can tap IRAs and 401(k)s without penalty for any reason at age 59½.
“You can use some of the lower brackets now versus hitting higher brackets with RMDs later,” he said.

The strategy could be appealing before collecting Social Security income, particularly between age 59½ and 63, since added income can impact Medicare premiums, experts say.
In some cases, higher income can trigger income-related monthly adjustment amounts, or IRMAA, for Medicare Part B and Part D premiums. Your IRMAA is based on so-called modified adjusted gross income, which is your adjusted gross income plus tax-exempt interest, from two years prior.

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