Investing

The restart of student loan payments could impact your credit, experts say.
As a result, borrowers should monitor their reports and make sure any new information is accurate.

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On-ramp period should protect your credit

Generally, failing to make timely payments on debts, including your student loans, can damage your credit. Payment history accounts for 35% of your score, according to FICO.
Typically, “missing just one payment can cause your credit score to drop by 50 to 100 points, or more,” said higher education expert Mark Kantrowitz.
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But before federal student loan bills resumed in October, the Biden administration announced that it would implement a 12-month “on-ramp” to repayment, during which borrowers would be shielded from most of the consequences of late or missed payments.
As a result, throughout this relief period, set to expire Sept. 30, 2024, borrowers who aren’t making payments shouldn’t see negative marks related to their student loans on their credit reports, Kantrowitz said.

The Education Department recently sent a letter to credit reporting and credit scoring companies reminding them that borrowers’ current activity is not necessarily indicative of an inability or unwillingness to make payments.
Nonpayment will likely be reported to the credit reporting agencies as “an authorized forbearance,” Kantrowitz said: “It doesn’t hurt the borrower’s credit, but it doesn’t help, either.”

That doesn’t mean you shouldn’t make payments if you can afford to, said Ted Rossman, senior industry analyst at Bankrate.
“Negative information shouldn’t be reported during the 12-month on-ramp period, but positive information should be included,” Rossman said.
Kantrowitz agreed.
“If a borrower is trying to improve their credit, they should make all of their required payments on time, by the due date,” he said. “Doing this every month consistently eventually leads to a better credit score.”

Still, check for errors on your credit report

Student loan borrowers should regularly check their credit reports to make sure the information is accurate, Kantrowitz said. You can get a free weekly copy of your credit report from each of the three major bureaus — Equifax, Experian and TransUnion — at Annualcreditreport.com.
If your loan servicer makes an error, such as reporting your loan as delinquent during the on-ramp period, you’ll want to bring it to their attention quickly, he said.
Creditors typically have 30 days to investigate your complaint, he said. In this case the creditor would be your student loan servicer, on behalf of the U.S. Department of Education.

Rossman also recommends filing a complaint with each credit bureau that is showing the wrong information.
“The easiest way to file disputes is on the credit bureaus’ websites,” he said. More

An Amazon worker walks past his Amazon Prime delivery truck in Washington, DC, on February 19, 2022.
Stefani Reynolds | Afp | Getty Images

Worries over the prospect of elevated interest rates for a longer time horizon linger on investors’ minds, even as stocks reach fresh highs.
Nonetheless, analysts remain focused on the bigger picture and are bullish on stocks that offer attractive long-term growth prospects. Investors can weigh the recommendations of Wall Street’s top analysts as they pick out the best names to add to their portfolios.

With that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Amazon
First up is e-commerce and cloud computing giant Amazon (AMZN). Despite a challenging macro backdrop, the company delivered solid improvement in its earnings for the first nine months of 2023, supported by its cost-control measures.
Recently, RBC Capital analyst Brad Erickson called Amazon one of his favorite ideas in the internet space in 2024. The analyst reaffirmed a buy rating on AMZN stock with a price target of $180.
Erickson expects the growth in the company’s Amazon Web Services business to witness notable re-acceleration in 2024, following optimization in spending by clients last year. Additionally, he expects the company’s 2024 earnings before interest and taxes to outperform, driven by a stronger performance by the retail business rather than the cloud unit.
The analyst is also upbeat about AMZN’s advertising business and anticipates that it will generate robust growth, driven by several partnerships and Prime video ads.       

Finally, regarding generative artificial intelligence opportunities and AMZN’s Bedrock platform for building AI applications, Erickson said, “We expect AMZN to gain ‘share’ in the GenAI narrative battle between itself, GOOGL & MSFT as Bedrock builds partnerships and gains more traction.”
Erickson ranks No. 175 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 55% of the time, with each delivering an average return of 19.6%. (See Amazon Hedge Funds Trading Activity on TipRanks)  
DoorDash
Delivery platform DoorDash (DASH) is the next pick this week. The company’s strong execution, expense discipline and growth investments helped it deliver impressive results last year.
On Jan. 9, BMO Capital analyst Brian Pitz initiated coverage of DASH with a buy rating and a price target of $120, calling the company a “beneficiary of categorical and consumer secular tailwinds.”
The analyst thinks that DoorDash is a category leader with a huge and expanding market opportunity across the globe. In particular, the analyst estimates the total addressable market for the company to be $2.2 trillion in the U.S. and $2.5 trillion in Europe. This marks a considerable increase from the overall TAM of $600 billion at the time of the company’s initial public offering in 2020.
Pitz noted that the year-over-year growth in DoorDash’s U.S. marketplace orders accelerated in the third quarter of 2023 across restaurant and non-restaurant categories. He highlighted that new vertical growth also accelerated in the third quarter. Further, the analyst specified that the company is already delivering positive adjusted EBITDA and is on track to generate GAAP profitability.
Pitz holds the 117th rank among more than 8,600 analysts tracked by TipRanks. His ratings have been successful 77% of the time, with each delivering an average return of 20.1%. (See DoorDash Technical Analysis on TipRanks)  
Nvidia  
We finally move to semiconductor giant Nvidia (NVDA). The stock generated stellar returns last year due to the robust demand for the company’s graphics processing units in generative AI.
JPMorgan analyst Harlan Sur reaffirmed a buy rating on NVDA stock following a presentation by Nvidia’s vice president of health care, Kimberly Powell, at the JPMorgan 42nd annual health-care conference. Sur has a price target of $650.
The analyst highlighted that the health-care vertical has already generated more than $1 billion in revenue in FY24, two to three years ahead of the targeted time period. This growth was fueled by the rising computational demand for AI in drug discovery, genomics, patient diagnostics and robotics. He thinks that the health-care business features among the top three verticals of the company’s data center segment.
“NVIDIA’s ability to drive accelerated computational solutions through its HPC [high performance computing] and AI/DL [deep learning] platforms continue to drive significant revenue opportunity for the firm,” said Sur.         
The analyst noted the company’s optimism about the emerging massive opportunity in computer-aided drug discovery and the demand for BioNeMo, Nvidia’s generative AI platform for drug discovery, which is now advancing into the beta phase. He expects the competitive positioning of Nvidia’s health-care vertical to be strengthened by its recent partnerships with Amgen (AMGN) and clinical-stage techbio company Recursion Pharmaceuticals (RXRX).        
Sur ranks No. 75 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, with each delivering an average return of 19.9%. (See Nvidia Insider Trading Activity on TipRanks)   More

While rent payments do not traditionally affect your credit, so-called rent-reporting services are changing that.
This week, real estate site Zillow Group launched its new rent payment reporting feature.
To reap the full benefit, make sure the service reports your payment to all three major credit bureaus.

Luis Alvarez | Digitalvision | Getty Images

While rent payments do not traditionally affect your credit, a growing number of so-called rent-reporting services are trying to change that.
These services track users’ rent-paying habits and report them to one or more of the big credit bureaus — Equifax, Experian and TransUnion — with the aim of helping renters build credit and potentially boost their credit score.

But these services don’t all operate the same way, and some may have less value for renters. There’s one major detail you should consider before signing up, said Matt Schulz, chief credit analyst at LendingTree: Is your payment record going to all three bureaus?
“It’s important for people to understand that you don’t just have one credit score,” he said. “You just don’t know which bureau your lender is going to use to get your information.”
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How rent-reporting programs work

This week, real estate site Zillow Group launched a new rent payment reporting feature. Renters who pay through the site can now opt in to have their on-time rent payments reported to Experian, one of the three major credit bureaus, at no charge to the renter or landlord.
In order for a renter to use the Zillow feature, their landlord must be a user of Zillow Rental Manager and have agreed to receive payments through the firm.

“It aligns with our goal of providing accessibility to building credit in the rental space. It’s a really positive step in that direction,” said Michael Sherman, the vice president of rentals at Zillow Group.

While Zillow is the first real estate marketplace to report rental payment data to a credit bureau, it joins a host of different rent-reporting services already available for consumers.
There are many services renters can look into, including some that are free, such as Piñata, and others that come with service or processing transaction fees, such as Rental Kharma, which charges $8.95 a month after an initial set-up fee of $75.
There are also services geared to landlords that offer rent reporting for tenants, including ClearNow, Esusu and PayYourRent. Landlords usually shoulder the cost of these programs, but there may be processing fees depending on how you make your rent payments.

Rent reporting can help the ‘credit invisibles’

Nearly 50 million Americans have no usable credit scores, according to a 2022 fact sheet from the Office of the Comptroller of the Currency’s Project REACh, or Roundtable for Economic Access and Change.
Being “credit invisible” can affect your ability to qualify for loans and affect the interest rates and terms you are given when you apply for credit.
When rent payments are included in credit reports, consumers see an average increase of nearly 60 points to their credit score, according to a 2021 TransUnion report.
Other payment reporting programs such as Experian Boost, StellarFi and UltraFICO have aims similar to those of rent-reporting services, but with different kinds of payments. They allow users to build credit based on alternative metrics such as banking activity and payments for streaming services, electric bills and mobile phone plans. 

Talk to your landlord before you sign up for a rent-reporting service on your own. They may be open to signing up as a benefit to their tenants.
While “people are creatures of habit and don’t always embrace change,” a credit building feature can help a landlord stand out in a competitive rental market, said Schulz.
“It would be significant added value; building credit is a big deal and if you are somebody who can help people build credit, you may be a little more interesting to them,” he added.

‘Three credit reports are different reports’

Before you sign up to a rent-reporting service, it’s important to understand which bureau or bureaus the company sends reports to. It may not be worth using a service that sends rent payment reports only to a single bureau.
“If a rent-reporting service only gives your information to one of [the three big bureaus], and the lender that you are getting your auto loan from uses a different credit bureau, the benefits that could and should come with that tool may not end up panning out,” said Schulz.
The ideal is that the rent-reporting company gives the data to Equifax, Experian and TransUnion.
“People hear about three credit bureaus, but they don’t understand that your three credit reports are different reports, and different companies report to different bureaus,” said Schulz. More

House Republicans have reintroduced legislation to permanently repeal the federal estate tax.
For 2024, the federal estate tax exemption is $13.61 million per individual or $27.22 million for spouses.
However, without bipartisan support for the policy, it’s unlikely to pass through the current split Congress.

Rep. Jason Smith, R-Mo., speaks during a House Oversight and Accountability Committee impeachment inquiry hearing into U.S. President Joe Biden on Sept. 28, 2023.
Jonathan Ernst | Reuters

House Republicans this week reintroduced legislation to permanently repeal what they’re calling the “death tax” — or federal estate tax, which is levied on inherited property above a certain value.
Introduced by Rep. Randy Feenstra, R-Iowa, with support from 162 lawmakers, the Death Tax Repeal Act follows past Republican proposals to abolish estate taxes, including a Senate bill from early 2023. 

“Families who spend a generation building up a successful farm, ranch or small business should be rewarded — not punished — by our tax code,” House Ways and Means Committee Chairman Jason Smith, R-Mo., said in a statement Thursday, applauding the bill.
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However, there hasn’t been bipartisan support for repealing the estate tax, and it’s unlikely to be enacted via the current split Congress, experts say.
“It seems like it’s largely a messaging play here where they’re trying to keep these ideas in the forefront,” said Garrett Watson, senior policy analyst and modeling manager at the Tax Foundation. “It’s a reminder especially as we approach the 2025 discussion.”
The federal estate tax exemption adjusted for inflation by rising to $13.61 million per individual or $27.22 million for spouses in 2024. Estates can owe up to 40% levies on anything above that.

But those limits will drop by roughly one-half after 2025 when provisions sunset from former president Donald Trump’s 2017 signature tax overhaul.
“Because the revenue effects are relatively small, they may have more leeway to eliminate [the estate tax] altogether if they had full control,” Watson said.

Who pays the federal estate tax

“In a sense, [the federal estate tax] has already been repealed,” said Robert McClelland, senior fellow at the Urban-Brookings Tax Policy Center, noting that most Americans aren’t affected by the levy.
In 2019, roughly 2,100 tax returns — representing 0.08% of adult U.S. deaths — were subject to federal estate taxes, according to the latest IRS data.
“It’s not something that should worry the average American” or even the average wealthy American, McClelland said.

While some Republicans say the federal estate tax puts a burden on family farms and small businesses, most aren’t affected, he said.
For 2022, the U.S. Department of Agriculture’s Economic Research Service estimated that 0.22% of 39,534 farms with principal operator deaths would owe estate taxes. Of course, the need for estate tax returns largely depends on the farm size, USDA noted.

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The cost to raise a child has become expensive for parents in the U.S.
For instance, 47% of parents spent more than $1,500 a month on child care expenses in 2023.
To help get a return on these costs, here are two tax credits parents can look into.

Maskot | Maskot | Getty Images

The cost to raise a child has become expensive for parents in the U.S. As tax season approaches, it’s smart to pay attention to tax breaks related to children and care expenses.
Costs for child care have increased significantly due to inflation. Many child care centers also bumped their rates amid the so-called child care cliff of pandemic aid expiring.

To that point, 47% of parents spent more than $1,500 a month on child care expenses in 2023, Care.com found. Meanwhile, 20% of parents shelled out at least $3,000 per month. The site polled 2,000 U.S. parents with children age 14 or younger.
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“I have some clients that have three young kids in daycare and their daycare costs are like $5,000 a month,” said Sophia Bera Daigle, a certified financial planner and the founder of Gen Y Planning in Austin, Texas. She’s also a CNBC Financial Advisor Council member.
Fortunately, there are two tax credits with different parameters that are meant to serve parents and help offset some of these costs.

How the child tax credit works

The child tax credit is meant to help families navigating the expense of raising a child.

“The intent behind the child tax credit is to give parents a bit of a break,” said Ted Rossman, a senior industry analyst at Bankrate.
The child tax credit was temporarily expanded during the Covid-19 pandemic, but expired at the end of 2021. Now, lawmakers are considering an $87 billion bipartisan tax agreement that could once again boost the child tax credit starting in 2023.
The changes proposed earlier this week would retroactively boost the maximum refundable tax break to $1,800 per qualifying child for 2023, up from the current limit of $1,600. The limit would increase to $1,900 for tax year 2024, and $2,000 for tax year 2025, along with inflation adjustments.
“The child tax credit is very broadly applied,” Rossman said.
It’s “something that all parents can claim within the income thresholds,” he added. For 2023, the credit starts to phase out for those with an annual income of $200,000 or more, or $400,000 for married couples filing jointly.

How the child and dependent care tax credit works

The child and dependent care tax credit is meant to help working families offset the costs of care for kids under age 13 and adult dependents. It’s not just for daycare. Expenses such as summer day camp can qualify, too.
“It’s not as generous as the child tax credit, but it still can be meaningful,” Rossman said.
The credit is capped at eligible expenses of $3,000 for one qualifying child, or $6,000 for two or more. Depending on your income, the credit may be worth up to 35% of those expenses.
However, there are a few limits, Daigle said.
“It’s specifically for working single parents or dual-income, working spouses. If you have a stay-at-home parent … you cannot claim this credit,” she explained.
Families who use a dependent-care flexible spending account to set aside pretax dollars for child care will also need to pay attention to those contributions. Expenses you paid for with FSA funds can’t be counted toward the tax credit.Don’t miss these stories from CNBC PRO: More

Egg prices rose 8.9% from November to December, according to the consumer price index. The figure is adjusted for seasonal patterns.
Highly pathogenic avian influenza, also known as bird flu, reemerged in U.S. commercial table-egg farms at the end of 2023 after a hiatus.
Bird flu caused an egg shortage in 2022-23 that led prices to soar to record highs, economists said.

A customer shops for eggs in a Kroger grocery store in Houston, Texas.
Brandon Bell | Getty Images News | Getty Images

Egg prices are on the rise again, after having fallen from record highs in 2023.
Average egg prices jumped 8.9% from November to December, following a 2.2% rise the prior month, according to the consumer price index. The U.S. Department of Labor adjusts these numbers to account for seasonal patterns.

December’s egg price move was the largest relative to other items in the CPI basket, which measures prices of everything from concert tickets to furniture, electricity and prescription drugs. For comparison, the overall CPI basket rose 0.3% during the month.

Bird flu ‘pops back up again’

Matthew Hatcher | Afp | Getty Images

A dozen grade A, large eggs cost $2.51 in December, still well below last year’s peak at $4.82 in January 2023. At the time of that early 2023 high, prices had more than doubled in less than a year.
That increase was largely due to a historic outbreak of highly pathogenic avian influenza, also known as bird flu, according to agricultural economists.
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The virus is extremely contagious and lethal among birds, including egg-laying hens. The outbreak killed tens of millions of birds, contributing to an egg shortage that coincided with peak consumer demand heading into the winter holiday season, economists said.

After having subsided for most of 2023, bird flu reappeared among commercial U.S. table-egg flocks in early November and has since been detected in several states, according to U.S. Department of Agriculture data.
“Just when it seems that perhaps it’s behind us, it pops back up again … after a roughly 10-month hiatus,” said Karyn Rispoli, head of egg market coverage at Urner Barry, a market research firm.

More than 14 million egg-laying chickens died in November and December due to avian flu, according to USDA data. There are more than 368 million egg-laying chickens in the U.S., the USDA said.
That loss has caused wholesale prices to increase, though “not nearly to the same degree” as at the end of 2022 into 2023, Rispoli said.
At the time, a farm group alleged that price gouging and profiteering among major egg suppliers also drove high prices in 2022, though some economists were skeptical that factor was at play.

Strong consumer demand may also be a factor

Some of the increase consumers saw in December was also likely attributable to the typical seasonal patterns of demand, which tends to spike around the winter holidays and therefore increases shelf prices, said Brian Moscogiuri, global trade strategist at Eggs Unlimited, an egg supplier.
Prices have increased higher than most expected, however, though “nowhere near the shock markets” in 2022, Moscogiuri said.

The extent to which bird flu may continue to spread and affect egg supply — and therefore prices — going forward is unclear, economists said.
“It’s hard to predict when a virus is going to present itself and how impactful that could and will be,” said Amy Smith, vice president at Advanced Economic Solutions.Don’t miss these stories from CNBC PRO: More

TikTok’s “loud budgeting” trend encourages consumers to take control of their finances and be vocal about making money-conscious decisions.
Being open about your financial constraints and cutting down on impulse purchases can help reduce anxiety and achieve broader goals, experts say.

Just months ago, we were coveting Loro Piana cashmere baseball hats and $300 Smythson notebooks in the name of “quiet luxury” and justifying such expensive purchases using “girl math.”
But in 2024, there’s a new idea taking hold that overtly rejects the urge to overspend and promotes speaking up about saving money — welcome to the era of “loud budgeting.”

What is loud budgeting?

TikTok’s loud budgeting trend encourages consumers to take control of their finances and be vocal about making money-conscious decisions, rather than modeling purchase decisions after celebrities and their bottomless pockets — and financial experts love it.
The idea making waves on social media is centered around the everyday person, or the “average Joe,” according to Lukas Battle’s viral TikTok video.
“Let’s send a message to corporations about the national inflation level. Let’s take a stand,” Battle said.
“It’s not ‘I don’t have enough,’ it’s ‘I don’t want to spend,'” Battle explained.
In fact, the truly ultrarich are less interested in conspicuous consumption, he contends. In that way, loud budgeting is “it’s almost more chic, more stylish, more of a flex.”

‘Being loud can be empowering’

“Being loud can be empowering,” said Erica Sandberg, personal finance expert at CardRates.com. “With this process, you become proud that you bring a bag lunch, make your own coffee, or take the bus.”
Further, being open about your financial constraints can also help reduce anxiety and crowdsource solutions, she added.
“Not only can consumers find commonality with budgeting concerns, they can also find community to achieve broader goals and cut down on impulse purchases,” Sandberg said.

Aire Images | Moment | Getty Images

Although a majority of all Americans say they are living paycheck to paycheck and feel increasingly strained by higher prices, consumers routinely spend more than they can afford on impulse purchases, many studies show — particularly on sites like TikTok, Instagram and Facebook.
One report by online lender SoFi found that 56% of consumers said that more than half of their online purchases are spontaneous, driven largely by changing habits post-Covid and the surge in online shopping.
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In fact, there are a growing number of catchy phrases, such as “bougie broke” and “de-influencing,” which aim to consciously stop overspending on social media and adhere to a realistic budget.
“When opening Instagram and routinely seeing photos of that friend who travels to Europe every month, or near daily dinners in $100 per person downtown restaurants, it can become easy to feel that doing the opposite, putting more into savings for a single annual vacation, isn’t really ‘living,'” said Yuval Shuminer, CEO of budgeting app Piere.
Yet, Battle is spot-on, Shuminer said.
“Deprivation isn’t the goal or the outcome,” she said. “It’s the creation of a lifestyle that creates real individual value. It’s about spending money and allocating resources on what you prioritize in life, and cutting ruthlessly on what you don’t.”

How to jump on the loud budgeting trend

Quiet the noise altogether, consumer savings expert Andrea Woroch recently told CNBC.
“The most simple way to dodge temptations is to get off the list by unsubscribing from emails, opting out of text alerts, turning off push notifications in retail apps and unfollowing brands on social,” she said.
In addition, deleting payment details stored online helps create a “purchase hurdle” that forces you to think through your buying decisions, Woroch said.
Otherwise, Jacqueline Howard, head of money wellness at Ally, recommends trying “the 48-hour rule,” which requires waiting a full two days before making a purchase, even if it’s on sale.
“This small window of time allows you to calm your emotions from the urgency of the sale and helps you decide if you really want or need the item,” she said.
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While a 12% annual rate of return has been suggested as possible in retirement investing, that’s not always achievable.
Here’s why you may want to anticipate a more conservative return to account for life’s inevitable curveballs, according to experts.

GlobalStock | Getty Images

When you invest toward retirement, experts often like to say you are letting your money work for you. But how much can you realistically expect to earn on your money?
The annual rate of return — defined as the percentage change in an investment’s value — is an estimate of the gains you may earn over time.

Exactly how much you can expect to earn per year on average has been the subject of debate.
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A 25-year-old who invests $100 per month in an S&P 500 index fund in a Roth individual retirement account until they are 65 may see a 12% annual rate of return over 40 years, personal finance expert Suze Orman recently told The Wall Street Journal in an interview. Dave Ramsey has long called for a 12% return estimate in his calculations.
However, David Blanchett, managing director and head of retirement research at PGIM DC Solutions, is seeking to debunk the idea of 12% return assumptions. Among other reasons, that rate of return is “absolutely nuts” because it doesn’t incorporate volatility or inflation, Blanchett said.
He said a more reasonable return assumption is 5% for a balanced portfolio of stocks and bonds or 7% for a more aggressive exposure to stocks.

Return assumptions as a lesson on compounding

The point of her example was not to expect a 12% average rate of return on your money, Orman told CNBC.com. Instead, it was intended to teach young investors what time and compounding can do, she said.
“You have no idea how many kids have said to me, ‘When I heard that I immediately opened a Roth IRA, I immediately started to put money in it,'” Orman said.
Young investors should start right now and should not wait, she said. The reason comes down to a concept called compound interest — that both the money you initially invest and the interest earned on that money will continue to grow.

Those investors start to learn that — no matter the return — it’s better to start at age 25 versus 35, she said.
“Every year that you wait, you have less time for your money to compound,” Orman said. “The less time you have for your money to compound, the less money you could have.”
Moreover, investing through a post-tax Roth IRA account versus a pretax traditional retirement account may help boost your returns, as tax rates may increase in the future.
Ramsey was not available for comment.

Why 12% is an optimistic benchmark

There’s a reason that 12% tends to be used as a benchmark, according to Blanchett. The average historical return from 1926 to 2023 is 12.2%, according to a monthly data set called stocks, bonds, bills and inflation, or SBBI.
But that is based on a simple arithmetic return, which may not accurately reflect all fluctuations, according to Blanchett.
For example, if you have $100 and your portfolio goes up 100%, you now have $200. But if it then goes down 50%, that brings you back to $100. The average return, by taking the 100% and negative 50% returns and dividing by two, would be positive 25%. Yet your realized return would be 0%, as you are back to your original $100 balance, Blanchett said.
Another more complicated calculation used by experts, known as compounded or geometric returns, would better account for those fluctuations, he said.
“It’s just the impact of negative returns that hurt you so much,” Blanchett said.

How much retirement savers can expect to earn

So how much can you realistically expect to earn on your retirement investments?
“I would tell them 4% to 6%,” Orman said.
The two different returns Orman cites serve different purposes, she said. The first example, with a 12% average rate of return, is to illustrate the power of compounding. The second is a lesson to anticipate a conservative return, “because you never know what can happen in life,” Orman said.
Orman’s conservative estimate is in line with Blanchett’s 5%.
Investors saving for retirement may see tools that provide return projections. However, it is important to be mindful of how those anticipated rates of return are determined.
For example, Fidelity provides a balance projection for a NetBenefits accountholder’s next milestone age that anticipates a 3.5% return, among other assumptions. Because those time frames tend to be shorter, using historical returns is not necessarily the best strategy for those estimates, nor is it intended to be a long-term growth assumption, according to the firm.

How your personal rate of return may vary

Of course, no rates of return are guaranteed.
Much of the rate you may anticipate earning on your investments depends on your personal asset allocation, said Brian Spinelli, a certified financial planner and co-chief investment officer at Halbert Hargrove Global Advisors in Long Beach, California, which was No. 8 on CNBC’s FA 100 list in 2023.
Investors in workplace retirement accounts typically have a limited menu of options from which to choose. If they opt for greater exposure to bonds or stable value funds, they can expect more muted returns compared with someone who is more heavily invested in stocks, Spinelli said.

The goal is to match those allocations to your time horizon, which typically means reducing the size of your stock investments the closer you get to your anticipated retirement date.
Generally, investors should not have major asset allocation shifts from month to month, quarter to quarter or even year to year, according to Spinelli.
It also helps to pay attention to the fees you may be charged on your investments, he noted. Fees eat into your returns.
To stay the course, it helps to anticipate a certain amount of volatility from the outset, he said. By selling and sitting on the sidelines and waiting for the market to recover, you may miss the market’s best performance days.
“In order to get those returns, you have to stay in it,” Spinelli said. “You cannot try to market-time and try to get out and expect yourself to get back in at the lows, because [you] probably won’t make that decision.” More