Investing

Enduring a wildfire or any other natural disaster can be emotionally and financially overwhelming.
Taking specific steps can help you regain control of your finances and better prepare for future emergencies.

An aerial view of homes destroyed in the Palisades Fire on January 27, 2025 in Pacific Palisades, California. 
Mario Tama | Getty Images

When the Los Angeles wildfires started dominating social media feeds, I reached out to a dear friend and client to check in. “We just found out an hour ago, our house is gone,” he replied.
Enduring a wildfire or any other natural disaster can be emotionally and financially overwhelming.

Here in Southern California, many of our clients and community are displaced and in shock by what the flames have taken. Families are trying to navigate the insurance red tape, worrying about where they will live and trying to make difficult decisions — such as if they can afford to rebuild or if they need to absorb the losses and move on.

More from CNBC’s Advisor Council

While rebuilding or restoring stability is challenging, taking specific steps can help you regain control of your finances and better prepare for future emergencies:

1. Ensure your safety and apply for disaster aid

Register for assistance immediately. The Red Cross and the Federal Emergency Management Agency, or FEMA, provide help including temporary shelter, emergency financial assistance and emotional support. Apply for disaster relief at disasterassistance.gov, and see if your state has wildfire or disaster-specific aid programs.

2. Assess your financial situation

Take inventory of accessible financial resources, including savings accounts, emergency funds or credit card limits for immediate needs. List financial obligations — such as rent, mortgages and utility bills — and begin looking into payment deferral options.

The Hughes Fire grows near Six Flags Magic Mountain amusement park and the community of Santa Clarita on January 22, 2025 in Castaic, California. 
David Mcnew | Getty Images

3. Adjust spending and budgeting

If you work with a financial advisor, let them know what has transpired. We’ve had clients recently tell us they’ve lost their homes and had to evacuate, and we are putting notations on their accounts and discussing short-term liquidity/income needs.

Use free budgeting tools to track spending.
Prioritize spending on essentials such as food, water, housing, and medication. Cancel subscriptions, defer large purchases and cut non-essential expenses to preserve cash flow.

Consider temporarily reducing the amount of money you are saving for retirement in order to build a bigger financial cushion to help you now. 
Contact utility companies, credit card issuers and other lenders to let them know your situation and negotiate payment plans or request hardship assistance. Many companies offer disaster forbearance programs that allow you to defer payments without penalty.

4. Protect your credit

If personal documents such as Social Security cards are lost or stolen after a disaster, freeze your credit at all three major credit rating agencies. You can always unfreeze your credit  once the crisis has passed if you need to borrow.
Also freeze any credit cards not in your possession. In many cases, you can do this easily in the card issuer’s app or online. It’s always a good idea to set up push notifications of any charges that occur. This way you can make sure all the charges are true and yours.

5. Begin the insurance claims process

Insurance claims may take weeks or months to process, so the sooner you get started, the better. 
Request “additional living expenses,” or ALE, coverage to pay for temporary housing, meals and other expenses.
Make a detailed list of damaged or lost items with photos and receipts (if available), and estimated replacement costs. This will support insurance claims.
Document communications with your insurer. If you believe your insurer has undervalued your claim, consider hiring a licensed public adjuster to negotiate on your behalf.
— By Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners. She is also a member of the CNBC Financial Advisor Council. More

The home office deduction allows some filers to claim a tax break for expenses incurred working remotely.
If you were a W-2 employee in 2024 — meaning your company withholds taxes from your paycheck — you can’t claim a deduction for home office costs.
But you may be able to take the tax break if you were a freelancer, contractor or self-employed worker, assuming you used the space “regularly and exclusively” for business, according to the IRS.

Coroimage | Moment | Getty Images

If you worked remotely in 2024, you may be eyeing the home office deduction. However, qualifying for the tax break may be harder than you expect, experts say. 
Only 7% of companies allowed fully remote work in 2024, down from 21% in 2023, according to a ZipRecruiter survey that polled 2,000 employers in September and October. But 40% of companies support hybrid work arrangements, the survey found. 

However, if you’re a W-2 employee — meaning your company withholds taxes from your paycheck — you can’t claim a tax break for 2024 home office expenses, according to certified financial planner Malcolm Ethridge, founder and managing partner at Capital Area Planning Group.
More from Personal Finance:Wholesale egg prices have ‘blown way past’ record highs, analyst saysA Roth IRA offers a ‘longer runway for tax-free investing,’ advisor saysSen. Elizabeth Warren: FDIC staffing shortages put banking system at risk
Before 2018, W-2 employees could claim certain unreimbursed work-related costs, including home office expenses, via “miscellaneous itemized deductions.” But that tax break was eliminated through 2025 via President Donald Trump’s 2017 tax cuts.
For 2024, you could still be eligible for the home office tax deduction with contract or self-employed work, whether you rent or own your home, said Ethridge, who is also an enrolled agent.
To qualify, you must have a dedicated space used “regularly and exclusively” for business, according to the IRS. The space could be part of your home, such as a separate room, or another structure on the property.

How to calculate the home office deduction

There are two ways to calculate the home office deduction: the “regular method” and the “simplified option,” according to the IRS.
The “simplified option” is a flat rate of $5 per square foot of the part of the home used, up to 300 square feet, for a maximum of $1,500.
By contrast, the “regular method” deducts actual expenses based on the percentage of your home used, such as part of your mortgage interest, insurance, utilities and repairs. This could also include depreciation, which subtracts a portion of your home’s value over time.

While it’s more complicated, the regular method can lead to “pretty substantial savings” in some cases, said CFP Neil Krishnaswamy, president of Krishna Wealth Planning in McKinney, Texas.
However, if you use the regular method, you could face “depreciation recapture” when you later sell your home for a profit, Ethridge said. This can trigger taxes on the depreciation previously claimed or that could have been claimed, which can be a “nightmare,” he said.
Regardless of whether you use the simplified option or the regular method, record-keeping is important, experts say. Otherwise, the deduction could be disallowed following an IRS audit. More

The advisory group known as the Department of Government Efficiency is seeking to make massive cuts to federal spending under billionaire Elon Musk.
A group of lawmakers and advocates held a rally outside the Social Security Administration’s Maryland headquarters in an effort to protect the agency.
“Keep your hands off our Social Security, because this has nothing, nothing to do with government efficiency,” Sen. Chris Van Hollen, D-Md., said at the rally.

Richard Stephen | Istock | Getty Images

The advisory group known as the Department of Government Efficiency, led by billionaire Elon Musk, has moved quickly to curb government spending at federal agencies including the U.S. Agency for International Development and the Consumer Financial Protection Bureau.
At a rally Monday outside the Social Security Administration’s Maryland headquarters, lawmakers and advocates warned that the federal agency responsible for benefits for 72.5 million Americans could be among DOGE’s next targets.

“Keep your hands off our Social Security, because this has nothing, nothing to do with government efficiency,” Sen. Chris Van Hollen, D-Md., said at the rally.
DOGE has launched plans to shut down the U.S. Agency for International Development and has told staffers at the Consumer Financial Protection Bureau to stop work until further notice.
The next target may be the Department of Education, Van Hollen said, followed by the National Oceanic and Atmospheric Administration, the Centers for Medicare & Medicaid Services and then the Social Security Administration.
More from Personal Finance:How Musk’s access to Treasury system may impact Social SecurityHere’s the average tax refund so far this yearA new bill would cap credit card interest rates at 10%
Social Security is one of the “most important social programs of our lifetime,” with Americans working for years to qualify for benefits, said Sen. Angela Alsobrooks, D-Md.

“It is America’s promise to us when we paid into Social Security,” Alsobrooks said. “And yet this is under attack even today.”
During his campaign, President Donald Trump repeatedly promised that he would not touch Social Security benefits. He reiterated that promise last week, according to reports, while also alleging that illegal immigrants are committing benefit fraud.
“The president remains committed to his promise not to touch [Social Security],” while also doubling down on his promise to end taxation of benefits, a White House official said in an emailed statement to CNBC. “Any work from DOGE is to find fraud, which they’ve successfully done,” the official wrote, without providing evidence of any fraud.

Massive budget cuts make Social Security a target

Because DOGE has been tasked with executing massive spending cuts, experts say it will be difficult to avoid Social Security.
“When you’re tasked with cutting $2 trillion and 70% of the federal budget is comprised of Social Security, Medicare, Medicaid and Defense, then you know that they’re going to continue to go after this,” said Rep. John Larson, D-Conn., during a Sunday town hall with constituents.  “We’re going to resist them.”
Lawmakers in red states may also push back, given how their constituents may negatively react to any changes, Larson said.
The Social Security Administration has “historically struggled to provide essential services in a timely manner,” a group of Democratic senators recently said in a letter to the Office of Personnel Management, with long waits to reach the agency by phone and for determinations on disability benefits.

According to the latest projections from the Social Security Trustees, the trust fund used to pay retirement benefits is projected to be depleted around 2033 if no legislative action is taken to address the issue. If Congress doesn’t act by 2033, the fund’s reserves will become depleted and continuing program income will be sufficient to pay 79% of scheduled benefits.
Any attempts by the Trump administration to make changes may be met with litigation.
A federal judge has temporarily stopped Musk and other DOGE team members from accessing Treasury Department systems and data, which had prompted worries that sensitive information involving Social Security numbers and tax information may be compromised. The Trump administration has filed a motion to vacate a restraining order prohibiting DOGE access to Treasury payment systems. Musk has called for the judge in that case to be impeached.

New moves ‘put people’s data at risk,’ expert says

While DOGE has access to the Treasury Department system, the concern is they may also have access to Social Security Administration data including Social Security numbers, direct deposit accounts and personal addresses, said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities and a former Social Security Administration employee.
In a statement to members of Congress last week, the Treasury Department sought to reassure lawmakers that DOGE will have “read-only” access to data.
“Treasury is committed to safeguarding the integrity and security of the system, given the implications of any compromise or disruption to the U.S. economy,” a Treasury official wrote in a letter to members of Congress. “The Fiscal Service is confident those protections are robust and effective.” 
The White House did not respond to CNBC’s request for further comment.
Nevertheless, Romig said there is the potential for new processes to put people’s data at risk “in major and very scary ways.”
“SSA has never had a data breach, and that’s because they have it so incredibly secure,” Romig said.
But with reports of DOGE using external servers and temporary employees without security clearances, that could put that sensitive information at risk, she said.
Other prospective budget cuts could also negatively impact Social Security, Romig said.
For example, if DOGE’s plans to cut federal leases impact the agency, that may leave Social Security beneficiaries without access to field offices, she said. Moreover, efforts to cut federal employees may hurt the agency as it already faces staffing issues. More

In a letter sent Monday to Inspector General Jennifer Fain and shared exclusively with CNBC, Sen. Elizabeth Warren, D-Mass., said the FDIC should evaluate whether the decision to rescind more than 200 job offers to bank examiners threatens the stability of the banking system.
The FDIC is already severely understaffed, the letter said.
“The FDIC should explain why it’s now axing even more examiners whose job it is to make sure big banks don’t crash our economy,” Warren also said in a post on X.

Sen. Elizabeth Warren, D-Mass.
Tom Williams | Cq-roll Call, Inc. | Getty Images

Sen. Elizabeth Warren is urging the Federal Deposit Insurance Corporation to reevaluate the decision to rescind more than 200 job offers to bank examiners in the wake of President Donald Trump’s federal hiring freeze.
The FDIC is already severely understaffed, which “threatens the stability of the banking system,” Warren, D-Mass., explained in a letter sent Monday to Inspector General Jennifer Fain and shared exclusively with CNBC.

In the letter, also signed by Sen. Raphael Warnock, D-Ga., Sen. Chris Van Hollen, D-Md., and Sen. Lisa Blunt Rochester, D-Del, the senators said staffing shortages directly contributed to Signature Bank’s failure in March 2023.
More from Personal Finance:Trump’s second term could mean the downfall of the FDICHere’s the average tax refund so far this yearA new bill would cap credit card interest rates at 10%
The lack of examiners “led to a series of supervisory delays, canceled or postponed exams, and quality control issues in the supervision of Signature,” the letter said.
“The lesson learned in this case was that a shortage of cops on the beat can threaten the safety and soundness of the banking system and pose risks to the Deposit Insurance Fund,” the letter stated.
The incident marked the largest U.S. banking failures since the 2008 financial crisis, and one of the biggest bank failures in U.S. history. The unexpected shutdown also caused widespread concern among consumers about their deposits, their bank and the banking system.

In a Jan. 27 post on X,  Warren also said: “the FDIC should explain why it’s now axing even more examiners whose job it is to make sure big banks don’t crash our economy.”
Subscribe to CNBC on YouTube. More

McDonald’s and Charles Schwab have been outperforming the market this year, but now may be the time for investors to sell the stocks, according to James Demmert, chief investment officer of Main Street Research. 
Demmert appeared on CNBC’s “Power Lunch” on Monday to share his opinions on where he thinks some of the biggest stocks in the market are headed. Here are his thoughts on the two stocks to sell, as well as one name he encourages traders to buy. 
McDonald’s 

Although shares of McDonald’s jumped 5% Monday following its fourth-quarter results, the move higher belies the weakness in the earnings report, Demmert said. Although earnings came in line with consensus estimates, revenue was weaker than expected due to a large drop in same-store sales. 
“Those golden arches look good on the market today, but the report was awful. They missed what was already a low bar,” said the investor. 
The stock’s climb higher on Monday is the perfect opportunity for investors to sell on the strength, Demmert added. The stock is already trading at 23 times earnings, with limited further upside potential in a very competitive market, he added. 
“There’s many more modern brands in fast, or ‘faster’ food, such as Cava,” Demmert said. 
McDonald’s has logged a nearly 7% gain year to date and over the past 12 months

Charles Schwab

Broker Charles Schwab is another name investors should look to leave, according to Demmert. 
The stock fell more than 2% Monday after TD Bank Group announced it would sell all of its $1.5 billion in shares in the company, representing a 10.1% stake. 
“You don’t want to wake up as a public shareholder or company and find out that your largest stakeholder is selling shares. That’s really some overhang on the stock,” Demmert said. 
Although Schwab has announced it would buy back the stock, Demmert expects it to remain a headwind that will limit the stock’s ability to rise despite a strong growth rate. 
“With this overhang of one of the largest shareholders selling, I think it’s going to put some brakes on the stock’s ability to go to higher,” said Demmert. “I think this is a stock that — yes, maybe buy it cheaper — but here we’d be a seller.”
Shares have advanced almost 10% year to date. Over the past 12 months, the stock has gained more than 28%.
SAP 
The European market offers opportunities at compelling valuations, Demmert said, offering software company SAP as one example.
The investor described SAP as a way to play the artificial intelligence trend. It is “a great example of second derivative AI in this early part of [the] AI tech-led bull market,” he explained.
It’s “sort-of like — if you will — larger than Oracle, or maybe a Salesforce, and has a platform similar to ServiceNow,” he added.
Profits have jumped more than 28% over the past year, and the company recently reported a top- and bottom-line beat.
SAP is also “a great way to play a foreign stock that we think will be spared by Trump tariffs,” Demmert added. More

President Donald Trump told reporters Sunday that he will impose 25% duties on all steel and aluminum imports into the U.S.
U.S. Steel, Cleveland-Cliffs, Nucor and Alcoa surged.
The U.S. relies on imports for more than 80% of its aluminum needs, according to a note from JPMorgan.

A water tower at the U.S. Steel Corp. Edgar Thomson Works steel mill in Braddock, Pennsylvania, on Sept. 4, 2024.
Justin Merriman | Bloomberg | Getty Images

Steel and aluminum stocks surged Monday after President Donald Trump said he will impose 25% duties on all imports of the metals into the U.S.
Cleveland-Cliffs rallied nearly 18%, Nucor jumped more than 5%, Alcoa rose more than 4% and U.S. Steel gained nearly 5%.

“Any steel coming into the United States is going to have a 25% tariff,” Trump told reporters on Air Force One on Sunday. The president said he will also slap 25% tariffs on aluminum imports.
The U.S. relies on imports for more than 80% of its aluminum needs, according to a note from JPMorgan. Canada supplies about 70% of raw aluminum to the U.S., according to the investment bank.
The aluminum tariff would add nearly 30 cents per pound to prices, not including transportation and other costs, according to JPMorgan. The bank expects domestic production of aluminum to increase as a result of the tariffs.
“Although existing stockpiles may provide a short-term buffer, the medium-term outlook suggests a modestly bearish impact on aluminum prices, due to potential declines in U.S. demand and a possible increase in domestic supply,” JPMorgan analysts led by Dominic O’Kane told clients.

Don’t miss these insights from CNBC PRO More

Bird flu outbreak has pushed the price of eggs even higher.
Wholesale egg prices have eclipsed record highs. Retail prices may also push past their 2023 record.
Chicken meat prices haven’t risen as dramatically, at least for now.

Sign on an empty supermarket shelf in Queens, New York.
Lindsey Nicholson/UCG/Universal Images Group via Getty Images

Wholesale egg prices have eclipsed record levels as the U.S. scrambles to contain a bird-flu outbreak — and consumers may soon see more sticker shock at their local grocer as a result, according to analysts.
On Friday, average wholesale prices for large, white shell eggs reached $8 a dozen, beating the previous record by a large degree, according to data from Expana, which tracks agricultural commodity prices.

“The previous all-time high was late December 2022 heading into Christmas, when we touched $5.46 per dozen,” Ryan Hojnowski, a market reporter at Expana, wrote in an e-mail. “Of course we have blown way past that this time.”
There’s a lag by a few weeks before those wholesale price hikes show up in retail stores, Hojnowski explained. How closely retail price dynamics track those of wholesale prices will vary by grocer, he said.

Bird flu drives egg supply shortage, economists say

JOHN THYS/AFP via Getty Images

At a time when U.S. inflation has eased broadly, egg inflation has caused anxiety for consumers.
Retailers like Trader Joe’s and CostCo have imposed some limits on consumers’ egg purchases due to higher prices.
What’s more, the Waffle House restaurant chain began charging customers an extra 50 cents per egg for each order. It’s not the only restaurant to do so. Some local restaurants have also increased the cost of egg dishes for customers, according to a recent Wall Street Journal report, which cited examples like like Storm’s Drive-In in Texas and Kroll’s Diner in Fargo, North Dakota.

Consumers paid about $4.15 for a dozen large, grade A eggs, on average, at the retail level in December, according to U.S. Bureau of Labor Statistics data.
While shy of the record retail high of $4.82 per dozen in January 2023, retail prices are up 65% from about $2.51 in December 2023 — and price pressures don’t appear to be easing.

“Highly pathogenic avian influenza,” more commonly known as bird flu, is the primary driver of egg price inflation, experts said.
The disease — highly infectious and lethal among birds — has killed millions of chickens at commercial egg farms and reduced egg supply, experts said. To prevent spread, farmers must kill their entire flock if they detect a case.
More than 40 million egg-laying chickens died in 2024, about 13% of the national total, said Amy Smith, vice president of Advanced Economic Solutions, an economic consulting firm specializing in agricultural commodities.
More from Personal Finance:2025 could be a renter’s market — but it won’t lastHere’s the average tax refund so far this yearA new bill would cap credit card interest rates at 10%
Consequently, inventories of shell eggs are roughly 15% to 16% below the five-year average, said Smith, citing U.S. Department of Agriculture data. (There’s currently about 1.2 million cases of 30-dozen eggs in shell-egg inventory, according to USDA data.)
Most of the egg-laying chickens — nearly 22 million — died in the fourth quarter of 2024 alone, creating a supply shock that ran headlong into peak seasonal demand around the winter holidays, when more households buy eggs for baking recipes, for example, Smith said.
Wholesale prices “are triple, quadruple where we were a year ago,” Smith said. The runup is “very significant,” she said.

How wholesale prices may impact consumers

Depending on the grocer, consumers may not see price flare-ups trickle down to store shelves quite as dramatically.
“Large national retailers like Walmart and Aldi often have more flexibility to absorb wholesale price increases,” Hojnowski wrote.
They may be able to offset those higher wholesale costs through stronger margins on other food products, or by securing some of their egg supply on fixed-price contracts, which many do, he said.
However, smaller, independent retailers don’t have the same economies of scale and need to maintain profitability on each item they sell, “leading them to adjust prices more quickly in response to wholesale changes,” Hojnowski said.

Why chicken has been less impacted than eggs

Bird flu has plagued egg farms into 2025, too, meaning supply may continue to be impacted, experts said. More than 22 million egg-laying chickens at commercial farms have died of bird flu so far in 2025, according to USDA data.
Bird flu doesn’t seem to have had as large an impact on farms that raise chickens for meat instead of eggs — at least not yet.

Average retail egg prices increased about 170% from December 2019 to December 2024, according to BLS data. By comparison, the average retail price for one pound of fresh, whole chicken rose about 42% during that time. A pound of boneless chicken breast meat jumped about 32%.
All increase more than average U.S. inflation overall during that time, as measured by the consumer price index, which increased about 23%.
That’s largely because of how bird flu has impacted different types of chickens, experts said. Chickens raised for eggs are different from those raised for chicken meat, which are known as “broilers.”

About 7.5 million broilers have died from bird flu since October, when the latest disease outbreak began, said Matt Busardo, team lead of U.S. poultry reporting at Expana. By contrast, more than 20 million egg layers have have died since the beginning of 2025.
“This alone provides a clearer picture of why egg prices have risen so dramatically compared to chicken,” Busardo said.
Wholesale chicken prices have risen slowly due to disease complications limiting availability, he said. While those prices are “positioned for more upward potential,” the increase “may not necessarily occur at the same rate as eggs, at least for now.” More

Since 2023, most retirees must take required minimum distributions, or RMDs, from pretax retirement accounts at age 73.
However, RMDs don’t apply to Roth individual retirement accounts while the owner or surviving spouse is alive.
That can provide more time for tax-free growth over the owner’s lifetime or for heirs, experts say.

© Marco Bottigelli | Moment | Getty Images

When saving for retirement, more time in the market can be beneficial depending on your goals and risk tolerance. Generally, the longer your investing timeline, the greater the opportunity to save and the bigger risk you can afford to take.
But your investing timeline can be shortened due to required minimum distributions, or RMDs, which apply to pretax 401(k) plans and individual retirement accounts starting at age 73.

However, RMDs aren’t required for Roth IRAs during the original owner’s lifetime. Surviving spouses can also avoid RMDs if they roll the funds into their own Roth IRAs. 
Therefore, a Roth IRA provides a “much longer runway for tax-free investing,” said certified financial planner Thomas Scanlon at Raymond James in Manchester, Connecticut.
More from Personal Finance:2025 is a renter’s market — but it won’t last, economists sayLooming $2.7 billion Pell Grant shortfall poses a new threat for college aidTrump wants to end the ‘carried interest loophole.’ What it means for Wall Street
Roth IRA contributions are made with after-tax dollars — meaning that you pay taxes on the contributions upfront — and any future withdrawals you make in retirement aren’t taxed as income.
For 2025, the Roth IRA contribution limit is $7,000, or $8,000 if you’re 50 and older, which is unchanged from the previous year. However, you or your spouse must have at least as much “earned income,” such as wages or self-employed earnings, as the amount of your contribution. 

While there are income limits for direct Roth IRA contributions, there are ways to bypass the earnings thresholds, including Roth conversions, which move pretax or nondeductible IRA funds to a Roth IRA.   
Anyone with a pretax IRA should “strongly consider” a yearly partial Roth conversion, said Scanlon, who is also a certified public accountant.
But it’s important to run tax projections before completing a Roth conversion to avoid unexpected consequences, experts say.

‘Tax-free compounding’ for legacy planning

Roth IRAs can also be a powerful tool for estate planning when the original owner and his or her spouse leave the assets to their children, experts say.
Without RMDs during the owner’s lifetime, there can be more “tax-free compounding” — or growth on growth — for heirs who eventually inherit the account, according to CFP Edward Jastrem, chief planning officer at Heritage Financial Services in Westwood, Massachusetts.
Since 2020, certain inherited accounts are subject to the “10-year rule,” meaning heirs must deplete inherited IRAs by the 10th year after the original account owner’s death. However, heirs won’t owe taxes on withdrawals. 
If the adult child leaves the inherited funds in the account for the full 10 years post-death, that’s “another decade of tax-free growth,” Jastrem said.  
“That’s a big gift to the heir,” he added. More