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    New college grads underestimate starting salaries by $10,000. Here's how to know your worth, according to career experts

    Ariel Skelley | Digitalvision | Getty Images

    Despite recession fears and headlines about layoffs, there’s no sign of trouble yet in the overall job market. Openings are still near all-time highs, and unemployment claims remain low.
    That means job seekers have the upper hand as employers look to attract talent, according to career experts.

    “No one should feel paralyzed by the sense of impending doom that is shifting here every few days,” said Shayla Thurlow, vice president of people and talent acquisition at career website The Muse.
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    While surveys have shown workers are looking for flexibility, good benefits and work/life balance, compensation is also important. Yet new graduates are underestimating their salaries by about $10,000, a ZipRecruiter survey of 1,500 job seekers found.
    The median annual earnings of full-time workers with bachelor’s degrees, ages 25-34, was $55,700 in 2019, according to the career website’s analysis. Yet when new graduates were asked by ZipRecruiter how much they would need to be paid to accept a job, the answer was $45,900.

    Job market has shifted grads’ salary expectations

    The swift changes in the job market are the likely reason young adults are underestimating their worth.

    “We went from a total deep freeze in the labor market in 2020,” said Julia Pollak, ZipRecruiter’s chief economist.
    “That shock rippled through colleges and made everyone kind of terrified,” she added. “Then things turned around very, very quickly.”

    The findings are in opposition to a survey by Real Estate Witch in March that showed college students were wildly overestimating their salary potential, with expectations they’d earn $103,880 in their first job.
    Pollak chalks that up to the way the questions were framed — what you expect or hope to make versus what you need to be offered to accept a job.
    “It’s a more conservative way of asking the question and causes people not to think about their pie in the sky, sort of wildest dream or expectation,” she said.

    Arm yourself with information for salary conversations

    Morsa Images | DigitalVision | Getty Images

    Whether you are overestimating your worth or underestimating it, the advice is the same: Do the research to understand salary ranges in your given field.
    Market data is readily available on websites like Payscale, Salary.com, Glassdoor and ZipRecruiter.
    Colleges and universities also provided surveys about salaries, Thurlow said.
    When speaking with recruiters, have upfront conversations about compensation.
    “As you’re talking to someone, ask what the budget is for the role to make sure it is in line with your expectations,” Thurlow said.

    By doing your research ahead of time, you should have a sense of where the job falls — and it also puts you in a position to negotiate.
    “Most employers set the pay in a role, assuming that some portion of candidates are going to try to negotiate for more, so there often is wiggle room,” Pollak said.
    If you can’t negotiate more pay, you can also see if there is something else the employer can offer, such as more vacation time, the ability to work remotely or training, she said.
    “The funny thing about negotiating for more pay is that often companies actually are impressed by it,” Pollak noted.
    “It shows that you are confident in your abilities, that you have other options.”
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    Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns. More

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    Millennials want to retire early at 59. Here's how to make that happen

    Most millennials hope to retire early and the generation, as a whole, has made great strides when it comes to long-term savings.
    Still, there are some guidelines that can help determine exactly how much you’ll need to put away to reach your retirement goals.

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    Millennials are ‘struggling to afford the present’

    After experiencing the pandemic recession and the extreme market swings that followed, roughly three-quarters, or 76%, of adults between the ages of 26 and 41 are concerned that a crash could wipe out their savings and investments, Alto Solutions said.
    More than half, or 53%, worry they’ll never be able to afford retirement, the report also found.

    “In a world of conspicuous consumption, soaring living costs and mounting student loan debt, millennials find it difficult to invest for the future because they are struggling to afford the present,” said Eric Satz, Alto’s founder and CEO.

    How to make sure you’re on track for retirement

    Retiring early is achievable with proper planning, according to Leanna Devinney, a vice president at Fidelity Investments, and millennials have made some significant strides when it comes to their long-term savings.
    In fact, the number of retirement accounts and account balances are growing among this generation.
    The total number of 401(k) accounts rose 11% to 7.9 million in the last year while individual retirement accounts reached 12.5 million, up 11% from one year ago, according to the latest data from Fidelity Investments, the nation’s largest provider of IRA and 401(k) savings plans. Millennial Roth IRA accounts also jumped roughly 11% over the same time.
    The overall average 402(k) balance now stands at $45,400 and IRA account balances are near $20,300, according to Fidelity.
    The amount of money you’ll ultimately need depends on your circumstances and desired lifestyle, but there are some common guidelines to help you to reach your retirement goals.

    Workers should aim to retire with around 10 times their current income, according to benchmarks by Fidelity.
    Devinney recommends following a “50-15-5 rule,” which suggests allocating 50% of your take home pay to cover expenses. This variation on the popular 50-30-20 budget leaves 30% for discretionary purchases and 15% designated for a retirement plan, including the employer match, if one is offered. The remaining 5% is meant for emergency and short-term savings.
    “That’s a big goal,” she said. To get there, start small and opt into an auto-escalation feature, which will automatically boost your savings rate by 1% or 2% each year. “Those increases a big difference in your retirement savings.”
    Finally, set aside 5% in a separate savings account for emergency money, so you can tap that to cover an unexpected expense instead of your defined contribution plan.
    “Having that emergency fund set up gives you peace of mind there,” Devinney said.
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    Here's how the Supreme Court's Roe v. Wade decision could affect health insurance coverage

    Even when Roe v. Wade was in effect, health insurance coverage of abortions was limited.
    Now it’s expected to get even rarer.
    Still, women may have options available to them.

    Abortion rights demonstrators protest outside the United States Supreme Court as the court rules in the Dobbs v Women’s Health Organization abortion case, overturning the landmark Roe v Wade abortion decision in Washington, U.S., June 24, 2022. 
    Jim Bourg | Reuters

    Even when Roe v. Wade was in effect and women had the legal right to an abortion no matter where they lived in the U.S., health insurance coverage of the procedure was limited.
    Many states restrict what plans can cover, and a decadeslong national law bans the use of federal funds for abortions, meaning that women on Medicaid and Medicare were often not covered when it came to pregnancy terminations.

    With abortion now expected to be prohibited in at least half the states after the landmark decision protecting women’s right to an abortion was overturned by the Supreme Court last week, coverage will only become rarer, experts say.
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    “State-regulated insurers in states where abortion is banned will have to drop coverage of abortions to stay in compliance with state criminal law,” said Caitlin Donovan, a spokeswoman for the National Patient Advocate Foundation.
    Still, women seeking coverage for abortion may have options available to them. Although the landscape is quickly changing, here’s what we know as of now.

    How much does an abortion cost?

    Medication abortions, which account for over half of all abortions, and include a two-drug regimen of mifepristone and misoprostol, can be safely used within the first 10 weeks of pregnancy, and can cost up to $750 without insurance, according to Planned Parenthood.

    A surgical abortion, meanwhile, can run more than $2,000 out of pocket.

    How did coverage of abortions work before?

    Prior to the Supreme Court’s decision last week, abortion coverage was still highly dependent on where you lived and what type of plan you had, Donovan said. “Most states impose restrictions on coverage in varying degrees.”
    Eleven states limit the coverage of abortion in all private health insurance plans written in the state, according to The Guttmacher Institute, a pro-abortion rights research organization. They are Idaho, Indiana, Kansas, Kentucky, Michigan, Missouri, Nebraska, North Dakota, Oklahoma, Texas and Utah.

    Meanwhile, just six states — California, Illinois, Maine, New York, Oregon and Washington — require abortion coverage, with some stipulations, on private plans.
    The Hyde Amendment, passed in 1976, blocked federal funding for services such as Medicaid from being used for abortions, except in limited cases including rape and incest. States can choose to use their own budgets to supplement their Medicaid coverage and extend their abortion policies, but more than 30 states have not done so, Donovan said.
    As a result, “in many states, hundreds of thousands of women seeking abortion services annually are left without coverage options,” according to a 2019 report by the Kaiser Family Foundation.

    How will coverage now change?

    It will just get more limited, experts say.
    If you live in a state such as Louisiana or South Dakota, where abortion is now banned, “you probably don’t have any insurance coverage for it at all except in the case of rape, incest or a threat to the mother’s life,” Donovan said.
    “Some states may not even allow those exceptions,” Donovan added.
    However, employers that self-fund for their health insurance policy, meaning they take on most of the costs of benefit claims, may be able to maintain their abortion coverage, said Joelle Abramowitz, an assistant research scientist at the University of Michigan. Such plans tend to be subject to less regulation, giving the company more flexibility on benefits offered.

    Donovan recommends calling your plan provider and asking about its abortion coverage. Of course, if abortions are banned in your state, even if you’re covered, you’ll likely have to travel to another state to get one.
    Some companies are also covering travel expenses for employees who need to leave the state for an abortion.

    What about leaving my state for an abortion?

    If you have abortion coverage, you may need to go “out of network” on your health insurance plan to see a doctor in another state, experts say.
    Out-of-network coverage is typically less robust, and some health plans, including HMO plans, don’t offer it at all. Abramowitz suggests calling your insurance plan and asking whether you have out-of-network benefits and how they work.
    In some cases, people may find it’s cheaper to pay a provider out of pocket than to go through their out-of-network insurance option, Abramowitz said. Many abortion providers work on a sliding scale, she added.
    It’s also worth asking your insurance plan if there are any in-network abortion providers in another state. There could be one right over the state line, for example, Abramowitz said.
    You also may be able to see a provider in another state virtually through a telehealth visit to get a medication abortion. In these cases, your medication can be mailed to you or you’ll be asked to pick it up somewhere.
    However, 19 states have already made it illegal to receive medication prescribed during a telehealth visit.

    How can I get financial help?

    A growing number of resources are available to help people with the financial costs of an abortion.
    Information about those options can be found at AbortionFinder.org. There’s also a national network of abortion funds.

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    44% of Americans work a side hustle to make ends meet — but it may not be an efficient way to earn more, says expert

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    Americans are increasingly turning to side hustles to make more money amid economic uncertainty and persistent high inflation.
    Some 44% of Americans are working at least one extra job to make ends meet each month, according to survey from Insuranks, a small-business insurance marketplace. The online survey of more than 1,000 adults working at least one job took place from May 31 through June 2.

    An additional 28% said that they took on a secondary gig due to inflation — the highest the U.S. has experienced in 40 years — driving up costs.
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    The survey found that those who work a side hustle spend, on average, 13 hours per week on their second job, and bring in an extra $483 per month.

    Set expectations before you start a side hustle

    Before pursuing a side gig, people should establish their goal, whether that is to earn more money, explore a creative outlet or build skills that they aren’t using in their full-time job, said Gorick Ng, author of “The Unspoken Rules.”
    “There is more to life than just a single W-2,” he said, adding that he sees people using side hustles to fulfill many dreams from financial freedom to learning new skills or having a creative outlet.

    A side hustle may not be the best way to earn more

    If your goal is to make more money, a side hustle might not always make the most sense, said Paula Pant, host of the podcast “Afford Anything,” during CNBC’s recent Own Your Money (… Before it Owns You) event.
    If your main job is in a high-paying profession, it may be a better use of your time to go for a promotion or consult within your area of expertise instead of launching a side gig that’s entirely different.
    “Choose whatever is the most time-efficient and energy- and spirit-efficient way of earning more,” she said.

    Where you are in life should also factor into your decision to start a side hustle, according to Anh Tran, a certified financial planner and managing partner at SageMint Wealth in Orange, California. For example, if you’re a college student, you may have more time to devote to a potential side gig than if you’re trying to start a family.
    It’s important to consider the amount of time and effort launching a business will take versus the potential payoff, Tran said.
    “What are you going to have to put into it to get a return, and does that make sense for you from a financial standpoint?” said Tran.

    Consider a side hustle as a career pivot

    On the other hand, if you’re in an industry or occupation where there isn’t a whole lot of financial upside, a side hustle could be an efficient route to earning more.
    “At the end of the day, ultimately what matters is the size of the gap between how much you earn and how much you spend,” said Pant. One way of increasing that is to bring in extra income, especially if you don’t want to cut spending. More

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    SPACs wipe out half of their value as investors lose appetite for risky growth stocks

    Visit cnbcevents.com/delivering-alpha to register for this year’s conference on September 28, 2022.

    A trader works on the floor of the New York Stock Exchange (NYSE) in New York, June 16, 2022.
    Brendan McDermid | Reuters

    SPACs, once Wall Street’s hottest tickets, have become one of the most hated trades this year.
    The proprietary CNBC SPAC Post Deal Index, which is comprised of SPACs that have completed their mergers and taken their target companies public, has fallen nearly 50% this year. The losses more than doubled the S&P 500’s 2022 decline as the equity benchmark fell into a bear market.

    Appetite for these speculative, early-stage growth names with little earnings has diminished in the face of rising rates as well as elevated market volatility. Meanwhile, a regulatory crackdown is drying up the pipeline as bankers started to scale back deal-making activities in the space.

    Arrows pointing outwards

    “We believe SPACs will need to continue to evolve in order to overcome challenges,” said James Sweetman, Wells Fargo’s senior global alternative investment strategist. “General market volatility in 2022 and an uncertain market environment resulting in losses in the public markets have also dampened enthusiasm for SPACs.”
    The biggest laggards this year in the space include British online used car startup Cazoo, mining company Core Scientific and autonomous driving firm Aurora Innovation, which have all plunged more than 80% in 2022.
    SPACs stand for special purpose acquisition companies, which raise capital in an IPO and use the cash to merge with a private company and take it public, usually within two years.
    Some high-profile transactions have also been nixed given the unfavorable market conditions, including SeatGeek’s $1.3 billion deal with Billy Beane’s RedBall Acquisition Corp. 
    — CNBC’s Gina Francolla contributed reporting. More

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    58% of Americans are living paycheck to paycheck after inflation spike — including 30% of those earning $250,000 or more

    With inflation still near 40-year highs, more than half of all Americans are living paycheck to paycheck, according to one report.
    Consumers who are struggling to afford their day-to-day lifestyle tend to rely more on credit cards and carry higher monthly balances making them financially vulnerable.
    Even top earners say they are stretched thin, the report found.

    With inflation at 40-year highs, workers across all income levels are having a harder time making ends meet.
    As of May, 58% of Americans — roughly 150 million adults — live paycheck to paycheck, according to a new LendingClub report. That’s down slightly from 61% who reported living paycheck to paycheck in April but up from 54% in May 2021.

    Even top earners say they are stretched thin, the report found. Of those earning $250,000 or more, 30% are living paycheck to paycheck. (Another recent survey, from consulting firm Willis Towers Watson, estimated 36% of those earning $100,000 or more are living paycheck to paycheck.)
    “Consumers have experienced a tough last couple of years as different factors have affected their financial lifestyle, and there seems to be little relief in sight,” said Anuj Nayar, LendingClub’s financial health officer.
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    With inflation, paychecks don’t stretch as far

    Credit card balances contribute to financial vulnerability

    Those struggling to afford their day-to-day lifestyle tend to rely more on credit cards and carry a higher monthly balance, making them financially vulnerable, the survey said.
    Overall, credit card balances rose year over year, reaching $841 billion in the first three months of 2022, according to a separate report from the Federal Reserve Bank of New York.

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    There’s a growing interest in direct indexing as the investing trend becomes ‘democratized’

    There’s a growing interest in direct indexing, buying the stocks of an index, rather than a mutual or exchange-traded fund, to achieve goals like tax efficiency, diversification or values-based investing. 
    While fees and account minimums are dropping, direct indexing may still be more costly and complicated than passive investing, experts say.

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    As demand grows for specialized portfolios, a trend known as direct indexing is quickly becoming an option for more investors.  
    Rather than owning a mutual or exchange-traded fund, direct indexing is buying the stocks of an index to achieve goals like tax efficiency, diversification or values-based investing. 

    Traditionally used by institutional and high-net worth investors, direct indexing is poised to grow more than 12% per year, faster than estimates for mutual funds and ETFs, according to Cerulli Associates. 
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    Companies like Morgan Stanley, BlackRock, JPMorgan Chase, Vanguard, Franklin Templeton, Charles Schwab and Fidelity have already entered the space, betting on broader access. 
    “It says a lot that these large fund providers are leaning into direct indexing,” said Adam Grealish, head of investments at Altruist, an advisor platform with a direct indexing product.

    How direct indexing works

    Charles Sachs, a certified financial planner and chief investment officer at Kaufman Rossin Wealth in Miami, said one of the biggest perks of direct indexing is flexibility.

    Here’s how it works: Financial advisors buy a representative share of an index’s stocks and rebalance over time, typically in a taxable brokerage account.

    Direct indexing generally works best for bigger portfolios because it may be costly to own an entire index. However, this barrier is shrinking as more brokers offer so-called fractional trading, allowing investors to buy partial shares. 

    Boost portfolio returns through tax-loss harvesting

    One of the biggest perks of direct indexing is so-called tax-loss harvesting, enabling investors to offset profits with losses when the stock market drops.   
    More than half of actively-managed accounts don’t receive any tax treatment, according to a Cerulli report.
    “Direct indexing offers more opportunities to tax-loss harvest because there are simply more individual stocks,” Grealish said.

    Direct indexing offers more opportunities to tax-loss harvest because there are simply more individual stocks.

    Adam Grealish
    Head of investments at Altruist

    Financial experts say direct indexing may offer so-called tax alpha, providing higher returns through tax-saving techniques. 
    Indeed, strategic tax-loss harvesting may boost portfolio returns by one percentage point or more, according to research from Vanguard, which may be significant over time.

    Easier to customize your portfolio 

    Direct indexing may also appeal to those looking for portfolio customization, such as value-based investors who want to divest from specific sectors.
    “Everyone’s values are slightly different,” said Grealish. “So a fund is rarely the best way to get pinpoint accuracy in expressing your values.”

    Customization may also be handy for someone with many shares of a single stock who wants to diversify their portfolio.  
    However, direct indexing may have higher costs and more complexity than buying a passively-managed index fund, Sachs said.

    Direct indexing becoming ‘democratized’

    Although the concept has been around for decades, it’s becoming more accessible as major asset managers enter the space and fees and account minimums drop.
    “It’s kind of being democratized,” said Pete Dietrich, head of wealth indexes at Morningstar.
    While platforms with tax features and values-based investing customization may have cost around 0.35% a year and a half ago, you may see similar platforms around 0.3%, 0.2% or even lower today, Dietrich said. 
    By comparison, the average expense ratio for passively managed funds was 0.12% in 2020, according to Morningstar.
    “I think you’re starting to see around $150,000 to $250,000 account minimums, coming down very quickly to $75,000,” he said, noting some platforms are even lower, depending on platform capability.

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    Health insurance premiums poised to jump next year for 13 million people unless Congress extends expanded subsidies for marketplace coverage

    On average, premiums are set to rise by more than 50% for people getting health coverage through a marketplace plan.
    The American Rescue Plan Act, which was signed into law in March 2021, removed — for two years — the income cap for eligibility (400%) of the federal poverty level.
    Of the 14.5 million people enrolled in marketplace plans, 13 million receive subsidies of varying amounts to reduce what they pay in premiums.

    The Good Brigade | Digitalvision | Getty Images

    If you get your health insurance through the government Health Insurance Marketplace, you may want to brace for higher premiums next year.
    Unless Congress takes action, enhanced premium subsidies — technically, tax credits — that have been in place for 2021 and 2022 will disappear after this year. The change would affect 13 million of the 14.5 million people who get their health insurance through the federal exchange or their state’s marketplace.

    “The default is that the expanded subsidies will expire at the end of this year,” said Cynthia Cox, a vice president at the Kaiser Family Foundation and director of its Affordable Care Act program. “On average, premiums would go up more than 50%, but for some it will be more.”
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    Most enrollees — which includes the self-employed and workers with no job-based health insurance — receive subsidies, which reduce what they pay in premiums. Some people also may qualify for help with cost-sharing such as deductibles and copays on certain plans, depending on their income.
    Before the temporary changes to the calculation for subsidy eligibility, the aid was generally only available to households with income from 100% to 400% of the poverty level.
    The American Rescue Plan Act, which was signed into law in March 2021, removed — for two years — that income cap, and the amount that anyone pays for premiums during the reprieve is limited to 8.5% of their income as calculated by the exchange.

    Assuming Congress does not extend the expanded tax credits, only people with household income from 100% to 400% of the federal poverty level will once again qualify for subsidies.
    Exactly how much of a premium increase a person would see depends on income, age, the premium cost where they live and how the premiums charged by insurers change for next year, according to Kaiser.
    Here’s a hypothetical example, based on a report from the Congressional Budget Office: Say a 64-year-old with $58,000 in income — about 430% of the 2022 poverty level of $13,590 — has insurance through the exchange. The 8.5% limit currently in place means they would pay no more than $4,950 for premiums this year. However, if faced with a 400% cap on eligibility in 2023, that same person would pay $12,900 for premiums because they’d no longer qualify for subsidies.
    A proposal to extend the extra subsidies through 2025 was included in the Democrats’ Build Back Better bill, which cleared the House last year but fell apart in the Senate.
    It’s uncertain whether the provision will be revived in some form via other legislation that Democrats may try to get through the Senate before a new Congress starts in January — the makeup of which could look very different due to the midterm elections Nov. 8.

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