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    Gen Z, millennials are less worried about fraud than older generations. But they have a unique risk

    Only 15% of Gen Z and 20% of millennials are concerned about falling victim to stolen money or assets through deceptive tactics, according to Bank of America’s Better Money Habits survey.
    Younger generations should be more mindful of the risks, as fraud can have significant consequences, said Matt Schulz, chief credit analyst at LendingTree.

    Pekic | E+ | Getty Images

    Younger adults are less worried about financial fraud than are older generations, a recent study found.
    Only 15% of Gen Z and 20% of millennials are concerned about falling victim to stolen money or assets through deceptive tactics, according to a Bank of America Better Money Habits survey of 1,000 respondents. By comparison, about 27% of Gen X and 27% of baby boomers feel at risk of fraud.

    “Younger generations are still navigating financial literacy and [are] still understanding the pitfalls” of fraud, said Jennifer Ehresman, head of client protection for consumer and small business at Bank of America.
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    Younger cohorts also tend to believe they are less exposed to fraud thanks to the immediacy of online banking apps; the accessibility allows them to check account transactions in real time, Ehresman said.
    “They feel more connected in the flow of financials,” she added.
    However, believing they can spot and report fraud quickly may offer a false sense of security.

    It’s true that older adults tend to have bigger account balances on the line. But that doesn’t mean younger generations can’t experience severe consequences, said Matt Schulz, chief credit analyst at LendingTree.
    “Their credit may not be as strong … they don’t have that much wiggle room in their budget. Financial fraud is a really big deal and can be really impactful,” Schulz said.

    Social media scams are a problem for younger adults

    Fraudsters are using younger adults’ online presence to their advantage. Consumers lost about $2.7 billion to scams on social media, far higher than any other method of contact, the Federal Trade Commission reported in October.
    Those losses are more common for younger generations. During the first six months of 2023, social media was the criminals’ point of contact in 38% of fraud losses for people ages 20 to 29. For those 18 or 19 years of age, the figure was 47%, according to the FTC.

    Fraud isn’t always ‘fixed in an afternoon’

    The amount of time it takes to recover from a scam will depend on the information compromised.
    “In some cases, it’s fixed in an afternoon; other cases, there can be more involved,” Schulz said.
    For example, if a scammer obtained your credit card number and racked up charges, fixing the problem may take just a phone call where you report the issue, as credit cards have rigorous fraud protections.
    However, if someone stole your Social Security number, that can have bigger ramifications that are harder to recover from.
    A criminal could use that information to open new credit cards or take out new loans in your name.
    They could also use your personal information to file a tax return in your name and claim your refund. The IRS’ Identity Theft Victim Assistance program had 294,138 individual case receipts during fiscal year 2023, a hike from 92,631 cases in 2019, according to a recent report from National Taxpayer Advocate.

    How to build a ‘financial fraud check’

    “One of the best things to do is building [a] basic financial fraud check,” Schulz said.
    That means routinely checking your bills and credit card statements. A fraudster who gets your credit card information will test if you notice small charges.
    “It’s a matter of a bad guy [who] gets ahold of your credit card and they buy a candy bar at a gas station,” Schulz said.
    If you don’t recognize a charge, take action and report it.
    “The first time you look through the list of transactions will take a while. But … it builds that positive habit,” he said.
    Be skeptical any time you’re thinking of signing up for a service, especially if it requires your financial information. Before you fill in any forms with sensitive data, understand the fine print and what the impact could be if that information were stolen.
    “If something feels too good to be true, it’s okay to say no,” said Schulz.
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    SEC to vote today on tough new rules for blank-check ‘SPAC’ companies

    SEC Chair Gary Gensler testifies during the House Financial Services Committee hearing titled “Oversight of the Securities and Exchange Commission,” in Rayburn Building on Wednesday, September 27, 2023.
    Tom Williams | Cq-roll Call, Inc. | Getty Images

    The Securities and Exchange Commission, lead by Chair Gary Gensler, is voting Wednesday on new rules to curb SPACs.
    Special Purpose Acquisition Companies, sometimes called “blank check companies,” are companies formed to raise capital through an initial public offering for the purpose of buying or merging with an existing company.

    Gensler says the new rules are necessary to protect investors.
    “Functionally, the SPAC target IPO is being used as an alternative means to conduct an IPO,” Gensler said in a March 2022 statement on the proposed regulations.

    Gensler is no fan of SPACs

    Gensler has been hostile to SPACs since the beginning of his tenure at the SEC. In a video published on the SEC website in December 2021, Gensler was openly disdainful of SPACs:
    “Suppose a group of strangers came up to you and said, ‘I have a company that doesn’t do much of anything, but sometime in the next two years will merge with another company. I don’t know what that company is yet.’ Would you invest in the stranger’s company?” Gensler says in the clip. “That’s essentially what a special purpose acquisition company, a SPAC, does.”
    Gensler has also been critical of the high 20% sponsor fees associated with SPACs, as well as other fees for bankers and financial advisors.

    He’s also been critical of how SPAC investors have been diluted by the use of so-called private investments in public equity, which allow investors, mostly big institutions, an additional opportunity to put money into the SPAC. PIPE investors can often can buy shares at a discount after a target merger, Gensler has asserted.

    SPACs: Much more disclosures will be required

    The new rules will:
    1) Expand disclosure requirements regarding SPAC sponsors, SPAC sponsor compensation, conflicts of interest, dilution, and the target company. After a blank-check SPAC goes public, it will usually announce within two years the acquisition of a target company, which is known as a de-SPAC transaction. The new rules would also require additional disclosures from a board of directors about whether the de-SPAC transaction is in the best interests of the SPAC and its shareholders.
    2) More closely align disclosure and legal liabilities for de-SPACS with those of traditional IPOs. Executives marketing de-SPACs often made wild claims about the future profitability of their companies, claims which would never have been possible to make had a traditional IPO route been used.
    “The idea is that parties to the transaction shouldn’t use overly optimistic language or over-promise future results in an effort to sell investors on the deal,” Gensler said in a March 2022 news release.
    The new rules would make the legal obligations and liabilities for a de-SPAC transaction similar to those of traditional IPOs. It would, for example, make the target company legally liable for any statement made about future results by assuming responsibility for disclosures.

    Forward-looking statements: No safe harbor

    Companies are provided with a “safe harbor” when they make forward looking statements, which provide them with protection against certain legal liability.
    However, IPOs are not afforded this “safe harbor” protection, which is why forward-looking statements in an IPO registration are usually very cautiously worded. The proposed rules would also make the “safe harbor” legal protections for forward-looking statements unavailable for blank check companies, meaning they could more easily be sued.

    The SPAC market has already collapsed

    2020 and 2021 were record years for SPAC IPO filing. In comparison, there were 86 SPAC IPOs in 2022, a significant decrease compared to the last two years, according to Statista.
    In 2023, the SPAC craze collapsed. Bloomberg data cited by Forbes indicated that 21 firms that had gone public via SPACs went bankrupt in 2023, the largest of which was flexible workplace provider WeWork, which filed for Chapter 11 protection in November 2023. Lordstown Motors also filed for bankruptcy.

    When asked if the SPAC craze was over on CNBC’s “The Exchange” on Tuesday, Duncan Davidson of Bullpen Capital laughed and said, “Yes. The SPAC companies were highly speculative and they collapse and nobody wants to touch a SPAC.”
    Still, better late than never.
    “Investors deserve the protections they receive from traditional IPOs, with respect to information asymmetries, fraud, and conflicts, and when it comes to disclosure, marketing practices, gatekeepers, and issuers,” Gensler said in the March 2022 statement when the rules were proposed.
    An SEC spokesman acknowledged there had been a decline in SPAC activity since 2021, but there is still activity in the marketplace.
    “The types of rules we are recommending are investor protections and disclosures that we think are necessary regardless of market fluctuations,” the spokesman said. More

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    These are the proposed changes to the child tax credit — and how much you could get

    Smart Tax Planning

    The $78 billion bipartisan tax package includes temporary child tax credit changes that could affect millions of families filing 2023 taxes.
    If the legislation is enacted, eligible families could see an average tax cut of $680 for 2023 taxes, according to the Urban-Brookings Tax Policy Center.

    Kate_sept2004 | E+ | Getty Images

    House lawmakers on Friday advanced a $78 billion bipartisan tax package, which includes temporary child tax credit changes that could affect millions of families this filing season.
    The plan temporarily expands access to the child tax credit with retroactive changes. If it is enacted, eligible families could see an average tax cut of $680 for 2023, according to estimates from the Urban-Brookings Tax Policy Center.

    While the bill cleared the House Ways and Means Committee on Friday, negotiations may still continue, and the path forward is unclear. The tax bill is on hold while the House is on recess this week.

    More from Smart Tax Planning:

    Here’s a look at more tax-planning news.

    How the child tax credit works

    Currently, the child tax credit is worth up to $2,000 per qualifying child under age 17 for 2023 and reduces your taxes on a dollar-for-dollar basis.
    “For most median-income Americans, you’re getting the full $2,000” because you’re likely to have at least that much tax liability, said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
    The tax break begins to phase out with modified adjusted gross income, or MAGI, of $200,000 for single filers and $400,000 for married couples filing together.

    Up to $1,600 of the credit is currently refundable for 2023, meaning the credit could provide a refund even with zero taxes owed. This makes the credit harder to access for lower earners, who typically have little to no tax liability.
    “Individuals who don’t have a lot of earned income may hardly qualify for hundreds of dollars worth [of the credit] or maybe none at all,” Lucas said.

    How much the child tax credit could increase

    If enacted, the bipartisan tax bill would make several temporary changes to the child tax credit that could benefit the lowest-earning Americans, according to the Urban-Brookings Tax Policy Center.
    The refundable portion of the child tax credit would increase to $1,800 for tax year 2023, $1,900 for 2024 and $2,000 for 2025 — and a new calculation would expand access.
    The current calculation for the maximum refundable credit multiplies earned income above $2,500 by 15%. But the new formula would be on a per-child basis — allowing families to use the same formula and then multiply it by the number of qualifying children. This means more lower-income families with multiple children would qualify for a higher credit.
    “The child tax credit is upside down because it gives more benefits to higher-income people than lower-income people,” said Chuck Marr, vice president for federal tax policy for the Center on Budget and Policy Priorities. “This is an attempt to at least partially fix that.”
    For tax years 2024 and 2025, filers may use the prior year’s earned income to calculate the credit, and the provision also adjusts the $2,000 tax credit for inflation. More

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    Federal Trade Commission bans ‘deceptive advertising’ for free filing from TurboTax maker Intuit

    The Federal Trade Commission has banned “deceptive advertising” from Intuit, maker of tax filing software TurboTax.
    The FTC on Monday found Intuit violated federal law by marketing free TurboTax software to filers who were not eligible.
    The final order bans Intuit from advertising “free” services unless all filers can use the free software or the company “clearly and conspicuously” discloses eligibility.

    Sopa Images | Lightrocket | Getty Images

    “Absolutely no one should be surprised that FTC Commissioners — employees of the FTC — ruled in favor of the FTC as they have done in every appeal for the last two decades,” Derrick Plummer, spokesperson for Intuit, said in a statement. “This decision is the result of a biased and broken system where the Commission serves as accuser, judge, jury, and then appellate judge all in the same case.”

    “Intuit has appealed this deeply flawed decision, and we believe that when the matter ultimately returns to a neutral body Intuit will prevail,” he added.
    The opinion comes as the IRS prepares to launch Direct File, the agency’s free electronic tax filing pilot program, which will allow certain taxpayers to file federal returns directly with the IRS. The limited pilot will roll out in phases in certain states, with wider availability expected by mid-March. More

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    ‘Housing affordability is reshaping migration trends,’ economist says. Here’s where people are moving

    Residents from major cities across the country are increasingly moving to Southern and Midwestern cities where housing costs and competition are less severe, and where construction is keeping up with the demand, according to a recent Zillow report.
    “Housing affordability has always mattered…and you’re seeing it across the country,” said Orphe Divounguy, a senior economist at Zillow.

    Maskot | Digitalvision | Getty Images

    With high mortgage rates and home prices, would-be buyers are understandably looking for deals — even if they have to move to a different city, state or region to find them.
    Last year, consumers moving interstate tended to pick new metropolitan areas where housing costs and competition are less severe, and construction is keeping up with demand, according to a recent Zillow Group analysis of United Van Lines data.

    Homes in those consumers’ new metros cost $7,500 less, on average, compared to the places they left.
    “Housing affordability has always mattered…and you’re seeing it across the country,” said Orphe Divounguy, a senior economist at Zillow. “Housing affordability is reshaping migration trends.”
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    The 10 metros where people are moving

    The search for affordability has led a strong migration flow into states like Florida, North Carolina, South Carolina, Tennessee and Texas, said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors.
    Cities in the Zillow analysis showing the most inbound moves include Charlotte, North Carolina; Providence, Rhode Island; Indianapolis, Indiana; Orlando, Florida; and Raleigh, North Carolina, according to the Zillow analysis.

    The real estate market is facing a low supply of active listings; while builders are trying to fill the gap, they can only do so in areas where it is financially feasible for both buyers and builders.
    “That’s why you’re seeing these relatively more affordable Southern, Midwestern markets rise to the top of the list,” Divounguy said.
    The draw of these metros is because they “are markets where jobs are being created rapidly” and where more new houses are being constructed, Divounguy said. For example, Charlotte and Raleigh have become tech and financial hubs attracting workers from metro areas like New York City.
    “Because of that, they have remained relatively more affordable than other markets across the country,” he said. More

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    Here are the top 10 hottest housing markets in 2024 — and why you may consider other options

    Here are the top 10 hottest housing markets in 2024, according to an analysis by Zillow.
    “In markets where you’re going to have a ton more job creation than there is housing supply, you’re likely going to see homes move faster, [and] stronger home value appreciation,” said Orphe Divounguy, a senior economist at Zillow.

    Grace Cary | Moment | Getty Images

    The top 10 hottest housing markets are expected to be spread across the South, Northeast and Midwest this year, according to an analysis by real estate marketplace Zillow. But a “hot” market isn’t always great for would-be buyers.
    Buffalo, New York, made the top of the list, as the area is slated to see increased job growth compared with the number of approved construction permits for new homes.

    “In markets where you’re going to have a ton more job creation than there is housing supply, you’re likely going to see homes move faster, stronger home value appreciation,” said Orphe Divounguy, a senior economist at Zillow.

    The list is based on an analysis of home value appreciation, how long it takes to sell a home and job growth relative to housing supply. That’s important information that can help you decide where you may want to look for a home — and places you may want to avoid.

    What a ‘hot’ market means for buyers

    “Market heat” refers to the level of competition among buyers; when you have more buyers than sellers, you have a hot market, Divounguy said.
    “These are areas where competition will be stiff among homebuyers,” he said. “The hottest market doesn’t necessarily mean market health.”
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    Market growth in some areas may not correlate to newly created jobs.
    Florida, for instance, is attracting baby boomer residents who are seeking warmer, tax-friendly places to retire, said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors.
    The claim that “the biggest share of homebuyers are baby boomers looking into warmer climates is a trope, but it’s a trope that’s true,” she said. “They’re looking into warmer areas, favorable tax conditions and better housing affordability.”
    Baby boomers are also the generation that holds most of the wealth and some of them are going to be cash buyers as they can tap into their home equity.

    Where the housing market is cooling

    Meanwhile, home values are expected to decline this year in the “coolest markets,” or places that will be less competitive. These places are New Orleans; San Antonio; Denver; Houston; and Minneapolis.
    “It’s a matter of affordability as well; if a market has gotten less affordable … you’re likely not going to see that type of heat in the market,” Divounguy said.

    Denver, for instance, was a popular attraction for homebuyers during the pandemic, but it has turned into an area where affordability was constrained.
    “Denver had a massive population flow,” Lautz said. “Finding the new Denver will be important to buyers.”
    Millennials will also be major buyers; most are in their prime homebuying age and some have reached their peak earning potential.
    Unlike baby boomers who are looking for favorable areas to retire, this cohort may be seeking employment opportunities or the ability to work remotely in new areas.
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    Employers and workers are at odds over work-life balance — here’s who is winning

    Employers have been pushing for more in-person time at the office.
    However, employees are increasingly prioritizing work-life balance and flexibility in their careers.
    Now half of workers are more interested in balance and belonging than climbing the career ladder, according to a new study by Randstad.

    MoMo Productions | DigitalVision | Getty Images

    At the end of last year, Wayfair CEO Niraj Shah had a clear message for workers heading into 2024: “Winning takes hard work.”
    “Working long hours, being responsive, blending work and life, is not anything to shy away from,” Shah wrote in an email to employees first obtained by Business Insider. “There is not a lot of history of laziness being rewarded with success,” Shah wrote.

    The online furniture retailer, which also recently announced layoffs, has been working aggressively to return to profitability as the home market remains under pressure. In a statement, a Wayfair spokesperson responded to criticism of the CEO’s message. “In his note, Niraj was reinforcing some of the values that have contributed to Wayfair’s success, including questioning the status quo, being cost-efficient and working hard together to drive results.”
    However, employees now have other priorities, new research shows, and more time at the office is not one of them.
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    While 56% of workers consider themselves to be ambitious, 47% are not focused on career progression at all, according to Randstad’s latest Workmonitor, which surveyed 27,000 workers globally.   
    Employees are more likely to consider work-life balance, flexible hours and mental health support as more important, the report found. 

    Employees would quit rather than give up hybrid work

    To that end, fewer want to spend any more time at the office than they already do.
    Since the Covid pandemic, a significant number of workers have moved or made other changes to their lives based on being able to work remotely, at least some of the time.
    To that point, 37% of workers now say they would consider quitting their job if their employer asked them to spend more time in the office, and 39% say that working from home is nonnegotiable, Randstad found.  
    “We saw a huge acceleration of the shift to hybrid work during the pandemic and people don’t want to give this up,” said Sander van ‘t Noordende, Randstad’s CEO.

    And yet, some employers continue to push return-to-office mandates.
    Citing productivity among other concerns, companies such as Amazon, Disney, Goldman Sachs, Microsoft and Walmart recently revised their hybrid and remote work policies. A few organizations even threatened to fire workers who don’t return to the office for a certain number of days.
    “There is a growing gap in understanding between employers and talent,” van ‘t Noordende said.
    Also among high-paying job listings, fully remote and hybrid opportunities fell 12% and 69%, respectively, at the end of 2023, while in-person postings jumped 93%, according to a separate report from career site Ladders. 
    “Companies that were previously offering hybrid roles are now increasingly posting in-office positions, especially for jobs paying over $200,000,” said John Mullinix, director of growth marketing at Ladders, in an emailed statement. 

    Hybrid work is here to stay, for now

    Although some companies are ramping up return-to-office plans, most hybrid work arrangements are staying — for now, according to another survey by the Conference Board. Only, 4% of U.S. CEOs said they will prioritize bringing workers back to the office full time in the year ahead.
    The share of paid work-from-home days was flat in 2023, Nick Bloom, an economics professor at Stanford University, recently told CNBC. In a post on X, formerly Twitter, he wrote, “Return to the office is dead.”
    With top talent still in high demand, employers have to be more flexible and amenable to workers’ wants and needs as it relates to working remotely, according to Vicki Salemi, career expert at Monster, as well as increased time off policies and shorter work weeks.
    “This is excellent news for workers who need that flexibility,” she said.
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    As the S&P 500 enters bull market territory, here’s what to consider before you invest

    The S&P 500 index has continued to climb to new highs in recent days.
    Investing in funds that track the index was a favorite strategy for Vanguard founder John Bogle.
    Here’s what experts say you should think about before you invest.

    People walk through the Financial District by the New York Stock Exchange (NYSE) on the last day of trading for the year on December 29, 2023 in New York City.
    Spencer Platt | Getty Images

    The S&P 500 stock index climbed to a new all-time high on Monday.
    A bull market — by two definitions — is here. Last year, the S&P 500 rose more than 20% from its most recent low. As of Friday, it crossed another bull market threshold when it surpassed its previous high.

    For investors who want to get in on the action, the good news is that investing in a fund that tracks the S&P 500 index is an easily accessible strategy.
    But experts say it also deserves a word of caution: Past performance is not indicative of future returns. And while the S&P 500 was a clear winner in 2023 — finishing the year up 26%, including dividends — it may not be the strategy that comes out ahead at the close of 2024.

    What is the S&P 500 index?

    The S&P 500 includes around 500 large cap equity stocks. The index is a market cap-weighted index, which means each company’s weighting is based on its market capitalization, or the total value of all outstanding shares.
    The top companies by weight include Apple, Microsoft, Amazon, Nvidia, Alphabet (with two share classes), Meta, Tesla, Berkshire Hathaway and JPMorgan Chase.
    Information technology represents the largest sector, with 28.9% of the index. A recent rally of big tech names has helped push the index to its recent highs.

    How can you invest in the S&P 500?

    Today, investors may choose from mutual funds or exchange-traded funds that track the index. Among the biggest ETFs are: SPDR S&P 500 ETF Trust, iShares Core S&P 500 ETF, and Vanguard S&P 500 ETF.
    Vanguard in 1975 created the first index mutual fund that tracked the S&P 500. Vanguard founder John Bogle was famously a proponent of investing in a broad index fund.
    “Simply buy a Standard & Poor’s 500 Index fund or a total stock market index fund,” Bogle wrote in his book, “The Little Book of Common Sense Investing.”
    “Then, once you have bought your stocks, get out of the casino — and stay out,” he wrote. “Just hold the market portfolio forever.”
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    For stock investors who want to keep their strategies simple, experts say the approach can work.
    “Among the better decisions people can make is starting with an index-based fund tracking the S&P 500 because it works,” Todd Rosenbluth, head of research at VettaFi, recently told CNBC.com.
    Over time, passive strategies have shown better returns than actively managed funds. Moreover, the cost of those funds is much lower compared to active strategies. Together, that combination is hard to beat.
    “I don’t think individual investors or money managers can generally outperform the S&P 500,” 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. Jenkin is also a member of the CNBC FA Council.

    When does it pay to diversify?

    The greater a portfolio’s exposure to the S&P 500 index, the more the ups and downs of that index will affect its balance.
    That is why experts generally recommend a 60/40 split between stocks and bonds. That may be extended to 70/30 or even 80/20 if an investor’s time horizon allows for more risk.

    Moreover, exclusively investing in the S&P 500 on the stock side of a portfolio may be limiting if other areas of the market prove more successful in 2024.
    In 2023, the S&P 500 was up around 26% for the year, besting other strategies like a U.S. small cap index fund or an international stock index fund, noted 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.
    It may be tempting to throw out those other strategies and just go with the one that did really well last year, Spinelli noted.
    “But I wouldn’t go overboard,” Spinelli said. “You shouldn’t be 100% U.S. large cap and let it sit there and expect the same level of returns we’ve seen over the last five years.” More