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In 2023, 6% of Americans were living without a bank account, Federal Reserve data shows.
Black and Hispanic adults are disproportionately unbanked, according to the Fed.
Experts say a lack of brick-and-mortar banks in communities of color has exacerbated the issue.

Sean Gladwell | Moment | Getty Images

Even as many Americans go cashless, some don’t have the option to choose that lifestyle.
About 6% of Americans were unbanked in 2023, meaning they’re living without access to any traditional financial services such as savings accounts, credit cards or personal checks, according to data from the Federal Reserve.

This share of the population grows to 23% when only considering people making less than $25,000. 
The unbanked are more vulnerable to predatory lending practices and their cash is more at risk, financial experts say. This issue disproportionately affects Black and Hispanic adults, Fed data shows, putting financial institutions and local organizations in a position to build trust within marginalized communities.
“Oftentimes the most vulnerable among us, who need the resources most efficiently, aren’t able to get access,” said Wole Coaxum, CEO of MoCaFi, a fintech company serving the unbanked and underbanked.

Young adults, people of color are more often unbanked

Black and Hispanic adults are 14% and 11%, respectively, more likely to be unbanked than white (4%) and Asian (4%) adults, according to the Fed.
This doesn’t come as a surprise to Joe Lugo, founder and CEO of J^3 Creations, a Clearwater, Florida-based consulting business that helps organizations become more culturally sensitive.

Much of the disconnect between financial institutions and communities of color, he said, can be attributed to a lack of banks in their neighborhoods.
“There is a subliminal message being sent to the community from generation to generation,” Lugo said. “When they don’t see a financial institution or a bank, [they] tend to say, ‘There’s no avenue for me this way. If I had a dream to start a business or buy a home, that’s not for me because they don’t exist here.'”
Many rural areas of the U.S. also tend to be banking deserts, largely because of a lack of population density, according to Darrin Williams, CEO of Southern Bancorp, Inc., a community development financial institution that serves rural and minority communities in the mid-South.
“In many of the markets we serve, we’re the only bank in town,” Williams said. “Often competition of the bank is a payday lender or some predatory provider of capital.”
Younger adults are also more likely to be unbanked.
Of 18- to 29-year-olds, 11% are living without a bank account, compared to 9% of 30- to 44-year-olds, 5% of 45- to 59-year-olds and 2% of people 60 and older, according to the Federal Reserve.
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Part of this can be explained by Generation Z’s mindset toward banking, said Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners. She is also a member of the CNBC Advisor Council.
“They feel like banking is something that is old school and traditional and there’s not a fit for them,” said Sun, who is the mother of a Gen Zer. “It’s an opportunity for us to talk to them about why they need to bank and how to open an account that works for them.”

‘They’re getting preyed upon’

Your money is better protected in a Federal Deposit Insurance Corp.-insured bank account, experts say, rather than keeping cash at home or stored in a Venmo or Cash App account, which are not FDIC insured.
It’s not always easy to tell which fintech services offer FDIC deposit insurance coverage, and the Federal Deposit Insurance Corporation says “it depends.” The American Fintech Council did not respond to a request for comment.
It’s still a good idea to keep some cash on hand in case of emergencies, but putting money in an inexpensive or free checking account can help build credit and establish good habits, Sun said. 
“It would help you, even if it’s just small amounts, to start to build that savings pattern so that you can save for the future and other financial goals, too,” she said.
People without bank accounts might also turn to check cashing services or consider payday loans, especially if they’re the only brick-and-mortar financial services in their neighborhood. These each come with risks, such as steep interest rates and a lack of federal insurance, said Preston Duppins, a senior partner and financial advisor at Florida-based Vilardi Wealth Management. 
“They’re getting preyed upon,” Duppins said about people taking out payday borrowers.
“And they don’t have the pull to get Congress to change payday loan laws,” he added.
The Community Financial Services Association of America, which represents payday lenders, did not respond to a request for comment.

Building trust

To get the unbanked to trust financial institutions, Lugo, with J^3 Creations, said local leaders and banks must meet people where they are.
“Most of the time, marginalized folks are not willing to venture out of their areas. I think there are some financial institutions that are starting to get it” said Lugo, who also co-founded the Hispanic Chamber of Commerce of Pinellas County.
“They’re going out into the community, they’re promoting their services into the community, they’re creating programs specifically for the community,” he said.

It’s one thing that Coaxum says MoCaFi aims to do. The fintech company, he said, initially assumed people who were unbanked or underbanked would readily adopt their free bank account offering with accessible ATMs. However, it wasn’t so simple, and Coaxum said the company’s “sophistication bias” impeded its ability to recruit customers.
The company shifted over time to partner with governments to distribute benefits like universal basic income programs, which gave recipients a reason to use the platform. 
“Giving them access to some benefit and then using that conversation as a way to be able to get them into our demand deposit account is how we shifted,” Coaxum said. 
Other ways to build trust are through education and representation, experts say. As a Black financial advisor, Duppins says he doesn’t see a lot of people who look like him in his field. 
“I spend a lot of time in my community. I don’t segment people by their access, because that means segmenting people who look like me,” Duppins said. “We need to continually focus on women, women of color, men of color in this space, in this banking industry.” More

Former President Donald Trump said this week that if elected, he would lower interest rates.
Interest rates are set by the Federal Reserve, which governs decisions about monetary policy independently from the White House. Therefore, it is theoretically free from political pressure.
Fed Chair Jerome Powell has maintained that politics will not play a role in the FOMC’s policy decisions.

Republican presidential nominee and former U.S. President Donald Trump speaks on a panel of the National Association of Black Journalists (NABJ) convention in Chicago, Illinois, U.S. July 31, 2024. 
Vincent Alban | Reuters

At the National Association of Black Journalists’ annual convention in Chicago on Wednesday, former President Donald Trump said inflation and high interest rates are “destroying our country.”
The Republican presidential nominee said if elected, he would “bring interest rates way down.”

“I bring inflation way down, so people can buy bacon again, so people can buy a ham sandwich again, so that people can go to a restaurant and afford it,” he said.
The president, however, exerts no direct control over interest rates. The Federal Reserve sets interest rates, and it operates independently of the White House.
Inflation has been a persistent problem since the Covid-19 pandemic, when price increases soared to their highest levels in more than 40 years. The Federal Reserve — which sets interest rates — responded with a series of rate hikes to effectively pump the brakes on the economy in an effort to get inflation under control.
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Now, recent economic data indicates that inflation is falling back toward the Fed’s 2% target, paving the way for the central bank to lower its benchmark rate for the first time in years. The personal consumption expenditures price index — the Fed’s preferred inflation gauge — showed a rise of 2.5% year over year in June. 

The federal funds rate, which sets overnight borrowing costs for banks but also influences consumer borrowing costs, is currently targeted in a range of 5.25% to 5.50%, the result of 11 rate increases between March 2022 and July 2023.
Once that rate comes down, consumers may see their borrowing costs fall as well.

‘A highly consequential year’

A contentious history

Trump, who nominated Powell to head of the nation’s central bank in 2018, became a fierce critic of the Fed chief and his colleagues, skirting historical precedent while in office by repeatedly and publicly berating the Fed’s decision-making. 
During his tenure in the White House, Trump complained that the central bank maintained a fed funds rate that was too high, making it harder for businesses and consumers to borrow and putting the U.S. at an economic disadvantage to countries with lower rates.
Ultimately, though, Trump’s comments had no impact on the Fed’s benchmark.
“Any chairman is going to remain loyal to the Fed’s mandate over any browbeating from the White House,” said Brett House, economics professor at Columbia Business School. 

Earlier this year, the former president told Fox Business that he would not reappoint Powell to lead the Fed. “I think he’s political,” Trump said. “I think he’s going to do something to probably help the Democrats, I think, if he lowers interest rates.”
Trump also told Bloomberg Businessweek in an interview in July that cutting rates just weeks ahead of the presidential election in November is “something that [central bank officials] know they shouldn’t be doing.”
When asked about these comments Wednesday, Powell underscored the Fed’s singular focus on the economy. (The central bank has a few main goals with respect to the economy: to promote maximum employment, keep prices stable and ensure moderate long-term interest rates.) 
“We don’t change anything in our approach to address other factors like the political calendar,” Powell said. “We never use our tools to support or oppose a political party, a politician or any political outcome.”

The central bank is an independent agency that governs decisions about monetary policy without interference from the president or any branch of government. Therefore, it is theoretically free from political pressure.
“The Fed will staunchly defend their independence regardless of who is president,” said Greg McBride, chief financial analyst at Bankrate.com.

The election effect on interest rate policy

In previous presidential election cycles, the Fed has maintained its charted course through the election, whether that was tightening as in 2004, cutting in 2008 or remaining on hold as in 1996, 2012 and 2020, according to a research report by Wells Fargo released in February.
Further, since 1994, the Fed adjusted its policy rate roughly the same number of times in presidential election years as in non-election years, the report said.
A separate research note by Barclays also found “no compelling statistical evidence that Federal Reserve policy is conducted differently during presidential elections.”

“The Fed’s independence will remain paramount,” McBride said. Going forward, “what will influence what the Fed does is what is happening in the broader economy.”
And yet, Fed board members are nominated by the president and must be approved by the Senate. Powell will conclude his second four-year stretch as chair in 2026 — opening the door to a potential change in leadership — and, possibly, the direction of monetary policy — smack in the middle of the next presidential term. 
The Trump campaign did not respond to CNBC’s request for comment. 
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Many Americans are pessimistic that Social Security benefits will be there for them when they retire.
It is possible benefits will change to address a looming Social Security funding shortfall.
But experts say the chances are slim that Social Security benefits will go away completely.

Twenty47studio | Moment | Getty Images

Workers who pay into Social Security while they’re working should expect benefits from the program when they retire.
Yet 72% of adults worry Social Security will run out of funding in their lifetimes, a new survey from Nationwide Retirement Institute finds.

Meanwhile, 23% do not expect to receive even a dime of the Social Security benefits they’ve earned.
Millennials and Gen Xers are most concerned the program’s funding may run out, according to Nationwide’s online survey of more than 1,800 adults, ages 18 and up.
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The pessimism comes as the program’s future funding status is uncertain. The trust fund the program relies on to pay retirement benefits is due to run out in 2033. At that time, just 79% of benefits will be payable.
Voters in the November presidential election are expected to place a high priority on where the candidates stand on fixing Social Security.

However, fears that Social Security benefits may dry up completely are overblown, experts say.
“The odds of it going away completely, I think, are really, really low,” David Blanchett, managing director and head of retirement research at PGIM DC Solutions, recently told CNBC.com.

However, it is possible benefits could be rearranged to make it so high earners receive a reduced income replacement rate, he said. Nevertheless, Americans shouldn’t worry Social Security will disappear.
“We’re always going to have a public pension system that almost all Americans will have access to,” Blanchett said.
While it is possible future Social Security benefits will be reduced, it is unlikely they will be eliminated altogether, Joe Elsasser, a certified financial planner and president of Social Security claiming software company Covisum, recently told CNBC.com.
“It’s totally reasonable to expect a benefit cut for younger people,” Elsasser said. “But to plan for it not to be there at all is a poor assumption.”

Most Americans don’t fully understand Social Security

While many Americans worry about Social Security’s future, they also don’t know fully understand how the program works, Nationwide’s survey found.
“What is disappointing is to recognize that the gaps actually widened,” said Tina Ambrozy, senior vice president of strategic customer solutions at Nationwide, said of the results of the firm’s 11th annual survey.
More than half of respondents — 51% — do not know how to maximize their Social Security benefits and 33% are uncertain when they may qualify for full retirement benefits.
Likewise, recent research from the National Institute on Retirement Security found just 11% of Americans know exactly how much Social Security benefits they may receive.

Social Security retirement benefits are calculated based on the top 35 years of wages that are averaged together to determine your benefit, Blanchett explained.
If you start working and paying into the program through payroll taxes at age 20, and then retire age 65, you have a 45-year wage history. Social Security will use your highest 35 earning years to calculate your benefit.
Importantly, beneficiaries are not limited to a fixed retirement benefit amount and can maximize their benefits.
You can claim retirement benefits at the earliest at age 62 or wait until 70, the highest claiming age. At age 62, you will receive a permanently reduced benefit. If you wait instead until full retirement age — 66 to 67, depending on when you were born — you will receive 100% of the benefits you earned.
But if you wait even longer, you may receive even more. Most experts recommend waiting until the highest age at which benefits can grow — 70 — to maximize Social Security benefit income.
Many people are not familiar with the highest claiming age, NIRS recently found.
“If you wait until age 70 you get the maximum possible benefit,” Blanchett said. “Every month or year you claim before that, the benefit is proportionally reduced.”

To be sure, waiting may not be the optimal strategy for everyone.
Nationwide and other firms recommend consulting a financial professional to help individuals assess their Social Security claiming options.
Many Americans are heading into their retirement years with a shortfall in retirement savings, which has prompted debate as to whether the U.S. is on the brink of a retirement crisis.
While many Americans may be forced to make significant changes to their lifestyles in their golden years, Social Security should help prevent worst case scenarios, according to Blanchett.
“If we didn’t have Social Security benefits, we would have a crisis where we’d have people retire, they’d be destitute, they’d be in a lot of trouble,” Blanchett said. More

Home prices have been rising faster than incomes, which can be a problem for homeowners because as the value of a home rises, so does the cost to maintain it.
Property taxes and home insurance rates are rising, influenced by inflation and the increase in catastrophic weather events.
More than 1 in 4 homeowners with mortgages are considered “cost-burdened,” according to a 2023 analysis by the Chamber of Commerce.

Record inflation may have people questioning whether homeownership is still a good investment.
Home prices have been rising faster than incomes, which can be a problem for homeowners because as the value of a home rises, so does the cost to maintain it.

More than 1 in 4 homeowners with mortgages are considered “cost-burdened,” meaning they spend more than 30% of their income on housing costs, according to a 2023 analysis of U.S. Census data by the Chamber of Commerce.
“Unfortunately, a lot of people go into buying a home and they don’t understand that their monthly payment could change,” said Devon Viehman, regional vice president for the National Association of Realtors.
Changes in two expenses in particular tend to surprise people, experts say.
“What many [homeowners] have failed to anticipate is the rise in both property taxes — and that’s correlated to the rise in the value of their home, something that at some level helps them — as well as the increased cost of paying for that insurance,” said Mark Hamrick, senior economic analyst at Bankrate.

‘Paper’ wealth and rising expenses

Single-family homeowners accumulate an average of $225,000 in wealth from their homes during a 10-year period, according to a 2022 report from the National Association of Realtors.

“That wealth sort of boils down to being primarily only on paper, and the time that you cash in that asset is when you sell the home,” said Hamrick.
Property taxes are one of the costs that can increase with the value of the home. Homeowners whose properties were reassessed between 2019 and 2023 amid skyrocketing valuations saw a median tax increase of 25%, according to a February 2024 study by CoreLogic. The annual median taxes for properties in the U.S. that were reassessed increased more than $600 over that period.
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Home insurance is the other major expense that can fluctuate after a home purchase. 
There has also been a 20% increase in average home insurance premiums between 2021 and 2023, according to insurance comparison company Insurify. Insurify estimates rates will rise another 6% by the end of 2024.
Florida, Louisiana, Texas and Colorado have seen the biggest spike in insurance rates over that period, influenced by extreme weather events.
Florida is leading the pack. The average annual rate for home insurance in Florida was nearly $11,000 in 2023, which is more than $8,600 than the U.S. average. The state’s cities make up six of the top 10 most expensive cities to insure in the country, Insurify found.
What’s more, the cost of repairing a home has risen, which also affects insurance premiums.
“This is going to be a space to watch for the foreseeable future, simply because it is such a dynamic and volatile and potentially costly environment,” Hamrick said.

Tips for homebuyers

Viehman of the NAR recommends people shopping for a home “lean on their realtor first.” She recommends homebuyers ask their real estate agent for a history of costs associated with owning the home such as property taxes, insurance, trash removal, water, gas and electrical bills.
Homebuyers should also see if the state they’re looking to buy in has any laws restricting property tax increases per year.

Just because you qualify for $3,000 a month in a mortgage payment doesn’t mean you should max it out right now … Go a little lower than that so that you give yourself that room.

Devon Viehman
regional vice president for the National Association of Realtors

A good agent ought to be able to answer all those questions for you, Viehman said.
Viehman also recommends leaving room in your monthly budget to address the possibility of surprise expenses.
“Just because you qualify for $3,000 a month in a mortgage payment doesn’t mean you should max it out right now,” she said. “Look for something where you can get in around $2,500 if $3,000 is your comfortable budget. Go a little lower than that so that you give yourself that room.”

Tips for current homeowners

Current homeowners who are struggling to meet their monthly payments also have some options to consider.
The Consumer Financial Protection Bureau recommends reaching out to the Department of Housing and Urban Development, to see if you qualify for any programs or additional help.
The CFPB also suggests cash-strapped homeowners call their mortgage servicer to explain the situation: Why they’re unable to pay, whether it’s a permanent or temporary situation and details about their income and expenses. A mortgage lender may be able to work out a repayment plan or provide a loan modification.

Homeowners can also consider switching insurance companies if their rates get too high.
“You should be interviewing insurance companies,” Viehman said. “Interview everyone. Interview a few lenders. Interview a few realtors. Interview a few insurance agents because they all have different things that they offer, and you need to find what works best for you.”
Watch the video above to learn more about why home payments are skyrocketing and what homebuyers can do to help navigate in this challenging market. More

Senate Republicans on Thursday blocked legislation that would have expanded the child tax credit, a key tax break for millions of families.
However, it is still a “top priority for Democrats,” particularly as the 2025 tax cliff approaches, according to Chuck Marr, vice president for federal tax policy for the Center on Budget and Policy Priorities.
Without action from Congress, the child tax credit will shrink from $2,000 to $1,000 per eligible kid after 2025 once tax cuts enacted by former President Donald Trump expire.

Lisa5201 | E+ | Getty Images

Senate Republicans on Thursday blocked legislation that would have expanded the child tax credit, a key tax break for millions of families.
Despite strong bipartisan support for the House bill passed in January, the legislation met resistance from Senate Republicans. Thursday’s procedural vote was not expected to clear the 60-vote hurdle needed to move forward. However, Senate Democrats forced the vote to show election-year positions.

“Today’s a good opportunity for both sides to show we back up good talk with strong action,” Senate Majority Leader Chuck Schumer, D-N.Y., said from the Senate floor before the vote.
Sen. Mike Crapo, R-Idaho, the ranking member of the Senate Finance Committee, in a statement described Thursday’s vote as a “blatant attempt to score political points.” He said Senate Republicans have concerns about the policy, but are willing to negotiate a “child tax credit solution that a majority of Republicans can support.”
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Sens. Joe Manchin, I-W.Va., and Bernie Sanders, I-Vt., who caucus with Democrats, also voted against the measure.
If enacted, the bill would have improved access to the child tax credit and retroactively boosted the refundable portion for 2023, which could have triggered refund checks from the IRS.

Roughly 16 million children would have benefited during the first year of the proposed child tax credit expansion, according to an analysis from the Center on Budget and Policy Priorities.
Eligible families could have seen an average tax cut of $680 for 2023 taxes, based on estimates from the Urban-Brookings Tax Policy Center.
“It’s a sad day for these 16 million kids,” especially after the support from House Republicans, said Chuck Marr, vice president for federal tax policy for the Center on Budget and Policy Priorities.
But expanding the child tax credit is still a “top priority for Democrats,” particularly as the 2025 tax cliff approaches, he said.

The American Rescue Plan of 2021 temporarily boosted the child tax credit to $3,000 from $2,000, with $600 extra for children under age 6, and families received up to half via monthly payments. 
As a result, the child poverty rate dropped to a historic low of 5.2% in 2021, largely due to the expansion, according to a Columbia University analysis. Then, in 2022, the rate more than doubled to 12.4% once pandemic relief expired, the U.S. Census Bureau found.

2025 child tax credit negotiations

Enacted by former President Donald Trump, the Tax Cuts and Jobs Act, or TCJA, of 2017 temporarily increased the maximum child tax credit to $2,000 from $1,000 per child under age 17 and boosted eligibility with higher income phaseout ranges. 
The TCJA also capped the refundable portion of the credit, which has reduced the benefit for lower-income families without taxes due.    
Without action from Congress, the child tax credit, among other individual tax provisions, will revert to 2017 levels after 2025.   

“Next year, they’ll have a bigger job to do because you have an underlying credit that’s much more expensive to extend,” said Garrett Watson, senior policy analyst and modeling manager at the Tax Foundation.  
Ahead of 2025, questions remain on whether Democrats and Republicans are willing to compromise on the child tax credit’s refundability and work requirement, he said.  
Regardless of the design, families would benefit from permanent updates, rather than temporary changes that must be renegotiated in Congress later, Watson said. 
Of course, future child tax credit updates will hinge on who controls the White House and Congress, which is difficult to predict in a close election.

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Even with several months to the November election, President Joe Biden still has time to take a leadership position on Social Security and Medicare.
Meanwhile, the election of former President Donald Trump or Vice President Kamala Harris to the Oval Office could also usher in certain changes to those programs.
Here’s what we know so far about the plans from the candidates.

A voter fills out a ballot at a polling station on Election Day in Falls Church, Virginia, U.S., November 7, 2023. 
Kevin Lamarque | Reuters

When it comes to the November election, there is one issue that is at the top of voters’ wish lists: Social Security.
Despite political division, most Americans — 87% — want action to address Social Security’s trust fund shortfall, according to the National Institute on Retirement Security. The group polled 1,208 individuals aged 25 and older.

Meanwhile, 69% of Americans said a candidate’s stance on Social Security will be a major factor in how they vote in the presidential election, according to Nationwide Retirement Institute.
It polled 1,831 adults age 18 and up who “currently receive or expect to receive Social Security.”
While experts mostly agree a fix is needed, they are divided on how that should happen — whether it be through tax increases, benefit cuts or a combination of both.
The deadline to fix the programs will only grow more urgent during the next presidential administration.
“If something is going to happen before the eleventh hour, it is going to require presidential leadership,” said Emerson Sprick, associate director of the Bipartisan Policy Center’s Economic Policy Program. “That’s something we haven’t seen on this issue for a very long time.”

Projected depletion dates are looming

The latest projections from the Social Security trustees estimate the program’s combined funds may run out in 2035. At that time, just 83% of benefits may be payable. The projected depletion date for the trust fund used to pay retirement benefits is even sooner in 2033.
Medicare also faces a looming depletion date for its hospital insurance fund, which is projected to be able to pay 100% of benefits until 2036.
It is up to lawmakers to address the shortfalls before the projected depletion dates, when the programs will face across-the-board benefit cuts.
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The looming depletion dates come as the programs face other pressures.
Retirees are now reaching “peak 65” — with more than 11,200 individuals turning 65 every day.
As more individuals rely on Social Security and Medicare, the gross national debt has now climbed to a record $35 trillion.
“We should fix our dangerously close to insolvent Social Security and Medicare trust funds,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement.

Biden can ‘show leadership’ before presidency ends

U.S. President Joe Biden is flanked by family members as he speaks about the release of Americans detained in Russia during brief remarks at the White House in Washington, U.S., August 1, 2024. 
Nathan Howard | Reuters

While the focus is on the presidential campaigns, President Joe Biden still has a window of opportunity to work to address Social Security and Medicare.
“Biden has a really fantastic opportunity, if he wants to get the ball rolling and show some leadership on the issue in the lame duck,” Sprick said.
Some Democrats have proposed raising taxes for the wealthy and increasing benefits.
Meanwhile, a bipartisan group of lawmakers has proposed forming a commission to identify next steps. But those efforts like those have yet to prompt action, which would likely require compromises.
“The folks in Congress need leadership and a little bit of cover from the top of the ticket,” Sprick said.
Biden publicly vowed to protect Social Security and Medicare and “make the wealthy pay their fair share” during his March State of the Union address.
“We could extend the life of Medicare’s Trust Fund permanently — without cutting benefits — if Congressional Republicans would get on board with the President’s historic budget proposal to raise taxes on the wealthy,” said White House spokesperson Robyn Patterson.
“The President’s budget also clearly states his principles for strengthening Social Security,” Patterson said. “He looks forward to working with Congress to responsibly strengthen Social Security by ensuring that high-income individuals pay their fair share, without increasing taxes on anyone making less than $400,000 or cutting benefits.”

Trump wants to eliminate some Social Security taxes

Republican presidential nominee and former U.S. President Donald Trump holds a campaign rally in Harrisburg, Pennsylvania, U.S., July 31, 2024. 
Elizabeth Frantz | Reuters

Former President Donald Trump posted on Truth Social on Thursday, in all capital letters, “Seniors should not pay tax on Social Security!”
Experts say the post likely refers to the taxes Social Security beneficiaries may owe on their benefit income. The Trump campaign did not return a request for comment by press time.
Exactly how much Social Security beneficiaries pay in taxes is based on their “combined income,” which includes adjusted gross income, nontaxable interest and half of their Social Security benefits.
For individuals with $25,000 to $34,000 in combined income — or married couples who file jointly with between $32,000 and $44,000 — up to 50% of benefits are taxed.
For individuals with more than $34,000 in combined income — or married couples with more than $44,000 — up to 85% of benefits may be taxable.

Those thresholds are not adjusted for inflation. Consequently, as time passes and benefit income increases, more beneficiaries are liable for taxes on their benefits.
Nixing those levies would allow beneficiaries to keep more of their benefit income. But it would also reduce revenues for both Social Security and Medicare by about $1.6 trillion to $1.8 trillion between fiscal years 2026 and 2035, the Committee for a Responsible Federal Budget estimates.
Like Biden, Trump has mostly promised not to cut Social Security. Yet in a March CNBC interview, Trump said he would consider cutting “entitlements,” which may refer to Social Security, Medicare or Medicaid.
“There is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and bad management of entitlements,” Trump told CNBC’s “Squawk Box.”

Harris opposes benefit cuts

Democratic presidential candidate, U.S. Vice President Kamala Harris speaks at a campaign rally at the Georgia State Convocation Center on July 30, 2024 in Atlanta, Georgia. 
Megan Varner | Getty Images

Vice President Kamala Harris’ position on Social Security and Medicare is similar to Biden’s, according to the White House.
Together, Biden and Harris have worked to extend Medicare’s solvency and give the program the authority to negotiate drug prices, thereby lowering costs for seniors and individuals with disabilities.
“The president and vice president oppose any proposal to cut benefits and have put forward a plan in the president’s budget to extend Social Security and Medicare solvency by asking the highest-income Americans to pay their fair share,” a White House official said.
As a senator representing California, Harris was a co-sponsor of the Social Security Expansion Act, which calls for raising taxes on the wealthy while making Social Security benefits more generous.
Once Harris was tapped to step in to the 2024 Democratic campaign for president, she readily got the endorsement of retirement advocacy groups.
“Unlike the GOP ticket, Vice President Harris has always been on the side of older Americans as a consistent supporter of Social Security, Medicare and lower drug prices,” Max Richtman, president & CEO of the National Committee to Preserve Social Security and Medicare, said in a statement. More

The Biden administration is sending emails out to tens of millions of borrowers about its new plans to cancel student debt.
Here’s what to know.

U.S. President Joe Biden speaks as he announces a new plan for federal student loan relief during a visit to Madison Area Technical College Truax Campus, in Madison, Wisconsin, U.S, April 8, 2024. 
Kevin Lamarque | Reuters

The Biden administration is sending emails to tens of millions of borrowers this week about its new plans to cancel student debt.
“We want to make you aware of this potential relief,” the U.S. Department of Education writes in the email, which CNBC reviewed.

The Department of Education estimates that at least 25 million borrowers could qualify.

Who will be eligible?

The same day the Supreme Court blocked President Joe Biden’s first attempt at sweeping student loan forgiveness, Biden announced that the White House would try to deliver the relief another way.
With the hope that this aid package survives the inevitable next round of legal challenges, the Education Department revised its forgiveness plan to be more targeted.
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In its email to borrowers, the department lists four categories of eligibility.

Those are:

Borrowers who owe more than they did at the start of repayment.
Those who entered repayment on their undergraduate loans on or before July 1, 2005, or, if they have graduate loans, on or before July 1, 2000.
People who are already eligible for student loan forgiveness under one of the government’s existing programs but just haven’t yet applied.
Students from “low-financial value” programs.

Is there anything I need to do?

Those who want to be included in the relief do not need to do anything, the Education Department said. No application will be needed.
However, if, for some reason, a borrower wants to opt out of the debt forgiveness, they must do so by Aug. 30 with their loan servicer.

When could I see the relief?

The Education Department is expected to publish its final rule on the debt relief sometime in October. Once that happens, it will likely move to cancel people’s loans quickly to get ahead of lawsuits, said Luke Herrine, an assistant professor of law at the University of Alabama.
“It is often harder to undo something rather than prevent its being done, both administratively and legally,” Herrine said.
“And if the administration doesn’t wait, it forces opponents to put together a lawsuit quickly and without full information,” Herrine said.

Yet opponents of the relief may already be prepared to fight it, said higher education expert Mark Kantrowitz.
“Most likely a lawsuit will be filed the day the rule is final, seeking a temporary injunction to prevent the Biden administration from forgiving loans” while the legal battle plays out, Kantrowitz said.
In that case, borrowers may be stuck waiting for news on the relief for months or longer. The case may even go to the Supreme Court again, where it is uncertain if it would survive.

Will I owe taxes on any forgiven debt?

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As a U.S. citizen or permanent resident, you incur U.S. income taxes on “worldwide income,” whether you’re making money while working from a ship or in another country. 
Taxes get more complicated if you disembark and work in a different country.
Casino prizes won on board are also subject to federal income tax.

Jenny Hunnicutt poses in front of the Royal Caribbean Ultimate World Cruise, which she’s been on for nearly nine months traveling the world. While on board, she’s working remotely for her writing and consulting business based in Florida.
Courtesy: Jenny Hunnicutt

Income made ‘worldwide’ is taxable

Despite a Bahamas flag flying atop the Serenade of the Seas, American cruise passengers making money while working from the ship are still subject to U.S. federal income taxes, experts say.
As a U.S. citizen or permanent resident, you incur U.S. income taxes on “worldwide income,” whether you’re making money from a ship or another country. 

That means filing taxes was pretty normal for Hunnicutt and her husband.
“My remote work through my consulting business, it’s all through Florida where my business is based,” she said. “It didn’t change for us.”

However, leaving the boat and working remotely could potentially trigger tax issues.  
When you work from another country, “that’s a completely different thing,” said certified financial planner Jane Mepham, founder of Elgon Financial Advisors in Austin, Texas, who specializes in international planning.  
As a U.S. citizen or permanent resident working abroad, you would still incur U.S. income taxes — but could also face tax liability for that country, depending on its laws and how long you worked there, she said.  
Some places could start trying to collect income taxes after day one, which is why you should speak with a cross-border tax professional before leaving for the trip, Mepham said.
To avoid double taxation, some expats qualify for the foreign earned income exclusion or the foreign tax credit. But cruise passengers aren’t likely to meet the requirements, experts say. 

Gifts can become ‘taxable income’

For some self-employed cruise passengers, income could come in different forms. 
Joe Martucci, another passenger on the ship, is a certified public accountant who lived abroad for 16 years. He’s retired now, but offered some tax advice to influencers on board who were monetizing content posted about the trip. 

Retired CPA Joe Martucci poses for a photo in Montenegro, a stop on the Royal Caribbean Ultimate World Cruise.
Courtesy: Joe Martucci

“A company in Australia gave them some gifts. Those gifts are taxable income, because they asked [the influencers], ‘Can you do a TikTok showing this gift we gave you?'” Martucci said. “You have to pay tax on that.”

Passengers ‘surprised’ by taxes on casino winnings

For U.S. citizens and permanent residents, casino prizes won aboard a cruise are also subject to federal income taxes, regardless of where the boat is when you hit the jackpot, experts say.   
“Some people could be a bit surprised” by a future tax bill, said James Border, a Florida-based certified public accountant and attorney, who specializes in maritime tax law. 
Typically, casinos issue a copy of Form W2-G, which must be reported on your tax return. Gambling losses can’t be deducted unless you itemize tax breaks and keep accurate records, according to the IRS.  More