Investing

The 401(k) plan savings rate reached 14.2%, including employee and company contributions, as of March 31, according to a Fidelity analysis.
That’s the closest the combined savings rate has ever been to Fidelity’s recommended 15% benchmark.
Automatic 401(k) enrollment and yearly increases have contributed to higher employee deferrals.

Halfpoint Images | Moment | Getty Images

How much to save for retirement

“The 15% is just a goalpost,” with the understanding that everyone’s situation is different, said Mike Shamrell, vice president of thought leadership for Fidelity’s Workplace Investing. 
The right retirement savings rate depends on your age, expected retirement date, cash flow, projected Social Security income, pensions and retirement plans, among other factors.

However, “if you can’t reach that 15%, at least try to contribute [enough] to get your full company match,” Shamrell said.

If you can’t reach that 15%, at least try to contribute [enough] to get your full company match.

Mike Shamrell
Vice president of thought leadership for Fidelity’s workplace investing

The most common match formula for Fidelity plans is based on a 5% contribution rate with a 100% match on the first 3% of employee deferrals and a 50% match on the next 2%. In other words, if 5% is $100, the company would match $80, Shamrell said.
“We have target savings rates of 10% to 30% depending on the household,” said certified financial planner Andrew Herzog, an associate wealth advisor at The Watchman Group in Plano, Texas.
For example, a 20-year-old barely making ends meet may struggle to save 10%, whereas a 50-year-old couple may need to stretch their savings rate to 20% to reach their target retirement dates, he said.

401(k) savings rates are increasing

Over the years, both the individual savings rate and company contributions have continued to climb, said Shamrell with Fidelity. 
Many companies automatically sign eligible employees up for the 401(k) plan, leaving them to opt out if they don’t want to participate. While the default contribution rate for such auto-enrolled 401(k) plans was 4.1% last quarter, nearly 40% of auto-enrolled plans started employee deferrals at 5% or higher, according to Fidelity.
Automatic 401(k) contribution increases have also boosted savings rates, according to Shamrell.
More than 33% of plan participants increased 401(k) contributions at the end of 2023 — and about three-quarters of those increases were automatic adjustments, he said.  

About 78% of 401(k) plans that auto-enrolled employees also had auto-escalation in 2022, according to a yearly survey from the Plan Sponsor Council of America.
After combining those factors, “you start seeing some really positive trends in terms of savings rates,” Shamrell added.

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The Consumer Financial Protection Bureau recently announced that buy now, pay later providers must comply with U.S. credit card laws. 
But many already do, and the bigger issue is that BNPL loans have largely gone undetected because they still aren’t reflected on credit reports, according to Marshall Lux, a fellow at the Harvard Kennedy School.

Last month, the Consumer Financial Protection Bureau declared that buy now, pay later customers should have the same federal protections as users of credit cards.
However, Marshall Lux, a fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School who studies BNPL, says the government’s latest guidance is already a few steps behind.

“What substantively changes? Nothing really,” he said.
The new regulation means the industry — currently dominated by fintech firms like Affirm, Klarna and PayPal — must make refunds for returned products or canceled services, investigate merchant disputes and pause payments during those probes, as well as providing bills with fee disclosures.
In fact, major buy now, pay later providers already provide such safeguards for users.
“We’ve got an industry that’s moving at light speed and a regulatory process that takes time,” Lux said.
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The Financial Technology Association, an industry trade group representing companies such as Afterpay, Klarna, PayPal and Zip, said it welcomes the guidance for the rest of the industry.
“FTA member companies are committed to strong consumer protections, including for disputes and refunds, and agree these protections should be applied consistently across the industry and to those companies claiming to offer buy now, pay later-like services,” said Penny Lee, FTA’s president and CEO.

Sebastian Siemiatkowski, CEO and co-founder of Klarna, said he has called for this type of regulation for years.
“We support the CFPB’s guidance to protect consumers from harmful players, and Klarna already investigates consumer disputes, covers related refunds and provides purchase information in the Klarna app,” he told CNBC.

‘This is a looming debt problem’

Lux said a key gap in the CFPB’s efforts is regulating how BNPL lenders provide data to the three major credit bureaus: Equifax, Experian and TransUnion.
Up until now, installment payments have largely gone undetected in debt tallies, primarily because most lenders don’t report their customers’ loan information and payment history.
“If I were going to do one thing, it would be this,” Lux said of regulating how a consumer’s BNPL history could factor into their credit history and ultimately their credit score.
“This is a looming debt problem, which we don’t have our hands on yet,” Lux said.

This is a looming debt problem, which we don’t have our hands on yet.

Marshall Lux
fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School

A spokesperson for the CFPB told CNBC the agency has “been monitoring this issue closely and we’re starting to see some progress.”
“But we continue to share concerns that mortgage, auto, and even other BNPL lenders cannot get a full picture of a potential borrower’s debt burden when BNPL is not reported,” the spokesperson said. “So we will continue to surface options on how the industry and consumer reporting companies can develop appropriate and accurate BNPL credit reporting practices.”
For now, BNPL operates “in de facto stealth mode,” Tim Quinlan, senior economist at Wells Fargo, recently told CNBC.
“Because no central repository exists for monitoring it, growth of this ‘phantom debt’ could imply total household debt levels are actually higher than traditional measures,” Quinlan said.

BNPL ‘can easily push consumers further into debt’

Buy now, pay later, which typically splits a purchase into a few interest-free payments, is one of the fastest-growing categories in consumer finance, according to a report by Wells Fargo.
Now, short-term financing plans are one of the most-used forms of credit — second only to credit cards — among consumers, according to a separate report by NerdWallet.

But as BNPL has become more popular, users have become more prone to overspending and missed or late payments, other studies show.
“With rising inflation and the ongoing debt crisis, now more than ever, it’s important that consumers are thoughtful with their purchases and payment methods,” said Michael Hershfield, founder and CEO of Accrue Savings.
“Platforms like BNPL have grown in popularity, even for everyday essentials, but can easily push consumers further into debt,” he said.

‘This is just the beginning’

“This is just the beginning of the CFPB’s regulation of the BNPL industry,” according to Erin Bryan, co-chair of international law firm Dorsey & Whitney’s consumer financial services group.
“This is the most significant regulatory response to BNPL to date,” she said.
For now, much of what consumers like about BNPL products is that they are different from traditional credit cards — “they typically don’t affect a user’s credit rating, the repayment terms are short, and they are available with the click of a button,” Bryan said. 
“The key question is whether the CFPB’s regulation of BNPL providers will ultimately make their products less appealing to consumers,” she added. 
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Financial TikTok, also known as #FinTok, is now one of the most popular sources for financial information, tips and advice, particularly among Gen Z.
“Loud budgeting,” “cash stuffing” and the “no-spend” challenge are just a few of the latest money-saving trends going viral.
There is no substitute for establishing a routine you can sustain over time, experts say.

Peshkova | Getty Images

From cash stuffing to loud budgeting, TikTok is chock-full of ways to build wealth — and more people are taking notice.
Financial TikTok, also known as #FinTok, is now one of the most popular sources for financial information, tips and advice, particularly among Generation Z.

With less access to professional advisors and a preference for obtaining information online, Gen Zers are more likely than any other generation to engage with finfluencer content on TikTok, YouTube and Instagram, according to a report by the CFA Institute.
More from Personal Finance:’Loud budgeting’ is having a moment Nearly half of young adults have ‘money dysmorphia’Here’s what’s wrong with the ‘100 envelope’ method
In fact, Gen Zers are nearly five times more likely than adults in their 40s or older to say they get financial advice — including stock tips — from social media, according to a separate CreditCards.com report.
But even the best advice can backfire. Here is what you should know before jumping on the latest money-saving trend.

‘Loud budgeting’ can ‘lead to frustration’

“Loud budgeting,” which encourages consumers to take control of their finances and vocalize making money-conscious choices over other activities, such as going out with friends, is one of the top trends of the year.

While scaling back on discretionary spending is key to better budgeting, limiting your social interactions also comes at a cost, according to Paul Hoffman, a data analyst at BestBrokers, who wrote a recent report on harmful FinTok trends. Before passing on a movie or dinner date, consider that turning down those invitations can “lead to frustration and emotional distress,” he said.

There may be better ways to cut back, Hoffman advised, without sacrificing time with the people close to you. “It’s important to find a balance between saving and engaging in enjoyable activities,” he said.

‘100 envelope’ trick creates a missed opportunity

More young adults are also trying the “100 envelope” method, which suggests saving a dollar more each day for 100 days. On the first day, you’ll set aside $1, then $2 the next day and so on, so by the end of the 100-day period, you will have more than $5,000 saved.
This seems like a good idea “with a relatively low ceiling,” according to Matt Schulz, chief credit analyst at LendingTree. However, “if there’s ever been a time when you shouldn’t stick your money in a binder, it’s today when you can get 4% to 5% or more back in these high-yield savings accounts,” he said.

After a series of interest rate hikes from the Federal Reserve, some top-yielding online savings account rates are now paying even more than 5%, according to Bankrate.com — well above the rate of inflation.
In this case, if you had $5,000 in a high-yield savings account earning 5%, you would have made roughly $250 in interest in a year.

‘Cash stuffing’ also forfeits interest

Another envelope method, called “cash stuffing,” advocates for dividing up your spending money into envelopes representing your monthly expenses, such as groceries and gas, to stay on budget and out of debt.
When the cash in one envelope is spent, you’re either done spending in that category for that month or you need to borrow from another envelope.
Yet, stashing cash not only forfeits the best returns in decades, but it also leaves you vulnerable to theft and could forgo the protections that come with consumer banking.
Whether and to what extent you are covered in case of a burglary may depend on your home insurance policy, whereas banks are covered by the FDIC, which insures your money for up to $250,000 per depositor, per account ownership category.

‘No spend’ challenges can be tough to sustain

Alternatively, the “no-spend” challenge promotes eliminating all nonessential purchases altogether for a week, a “no buy month” or even a full year, and putting the money that would otherwise go to dinners out or new clothes toward a long-term financial goal.
“The gamification can be kind of fun,” Ted Rossman, senior industry analyst at Bankrate, recently told CNBC. But like any other quick fix, these challenges could be hard to sustain over time.
Rather than hop on the latest extreme fad, “it comes back to setting a budget and setting expectations,” he said.
Ultimately, there is no short cut to practicing good money habits, most experts say.
“No hack can teach you self-control, mindful spending or how to keep your balance low,” Hoffman added.
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Sixty percent of U.S. workers said they didn’t ask for higher pay when they were last hired, according to an April 2023 Pew Research Center survey.
Career experts urge employees to do market research before negotiating for more money or looking for a new job.
A discrepancy in pay between two comparable employees may not be malicious on the part of the employer and may be due to market conditions, experts said.

Early in her career, Kelly Harry worked at a major news organization in New York City as an account executive in ad sales.
“I was making $40,000 a year, and I really thought that that was a lot of money at the time, until I had a casual conversation with my co-worker who was actually complaining about making about $102,000 a year,” Harry told CNBC. “It never occurred to me until that conversation that I was severely underpaid.”

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Harry, who is an immigrant in the U.S. on DACA, said she was grateful to work at a well-known organization. DACA, which stands for Deferred Action for Childhood Arrivals, is a federal policy that provides eligible young adults who were brought to the U.S. as children with temporary work authorization.
She said she didn’t think to negotiate her salary when she received the job offer. This isn’t unusual; 60% of U.S. workers in an April 2023 Pew Research Center survey said they didn’t ask for higher pay when they were last hired. Of the remainder, 30% said they asked for higher pay and 10% said they don’t remember.

Why some workers are paid more

“The difference between someone who gets $55,000 and $60,000 a lot of times is just because person number two just asked for $60,000,” said Maddie Machado, founder of Career Finesse. “It’s not because they’re better at their job. It’s not because they’re more experienced. It is simply because they just asked for it.”
A discrepancy in pay between two comparable employees may also be due to market conditions. A phenomenon called “wage compression” can occur when newer employees are paid more than long-term employees because the recent hire was brought into the company at a time when the market valued their skills more.

“It’s possible that an objective person might say you’re wrong, that these pay differences are not really that different, or there’s justifications for them,” said Peter Cappelli, a professor of management at The Wharton School at the University of Pennsylvania and the director of its Center for Human Resources.

Do market research on pay and skills

When Harry first learned her colleague was paid 2½ times what she was earning, she did what career experts recommend: She went “back to the drawing board” and researched what the market was demanding for her skills.
“The term underpaid shouldn’t be used to compare you to a colleague,” said Sho Dewan, career expert and founder of Workhap. “It should be compared to you and the market, and there’s always going to be a range in the market.”

“Compensation has a lot of different pieces to it,” Machado told CNBC. “It’s not just a simple formula that’s like years of experience equals this amount of money, education equals this amount of money, location equals this amount of money.”
When trying to determine where you fall within the range for your position, it’s safe to assume “you’re probably going to fall somewhere in the middle,” Machado said.
It’s also crucial to factor in your location, Machado said, due to the cost of living.

How to request a salary adjustment

Only 34% of Americans are satisfied with how much they are paid at work, according to a March 2023 Pew Research Center survey.
One option if you suspect you’re being underpaid is to request a salary adjustment from your employer. But career coaches say you should go into the conversation prepared.
“You should never bring up another co-worker’s name in that conversation,” Dewan said. “You should never say, ‘I had a conversation with Henry. I know we had the same experience [and] the same skills. I realized that he gets paid 20% more than me. I want the same salary as him.'”
This is where that market research comes in handy, along with highlights from your performance review.
“You can’t just go to your employer and be like, ‘I want to get paid more … simply based on vibes,” Machado said. “When you go for that salary adjustment, you want to bring in other data points [showing] the impact that you’ve brought to the company, because at the end of the day, they could just find somebody else who’s cheaper to do your job as well.”
It’s also important to avoid escalating to threats, Cappelli said.
“Often your boss doesn’t want to let you go,” Cappelli told CNBC. “But the people at the top who are trying to hold the line on pay just say, ‘I’m sorry, we can’t do it. Good luck.'”

When to find a new position

If your employer is unreceptive to a salary adjustment, you can always consider leaving, but career coaches say you should be careful how you go about it.
“If that does not work out for whatever reason, that is when you need to [ask yourself], will I ever get paid what I’m worth?” Dewan said. “And if the margins of you getting paid versus what market value is [are] too crazy high, that is when you should look at other options out there.”
If you do end up getting an outside offer, you can try to use it to leverage more money from your current employer.
“There are some employers who really want you to shake them down in the sense that they will match an offer if you get it from someplace else,” Cappelli said. “It’s a bad practice, but it is pretty common.”
“Sometimes it’s easier to just jump ship,” Dewan said.
That’s what Harry did.
“I ended up finding another opportunity, which happened to be way better. It was remote, a … healthier environment,” Harry said. “Ultimately, in the end, I’m now an assistant VP. Without that experience, I probably wouldn’t have been able to get here today.”
Watch the video above to learn more about what career experts recommend you do if you think you’re being underpaid. More

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

In tumultuous markets, investors can turn to dividend-paying stocks that offer income and can help cushion a portfolio in tough times.
Given the massive universe of dividend-paying companies, selecting the right stocks can be a difficult task. To that end, investors can track the recommendations of Wall Street experts, who conduct a thorough analysis of a company’s earnings growth potential and dividend history.    

Here are three attractive dividend stocks, according to Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.

IBM

This week’s first dividend pick is tech giant IBM (IBM), which announced mixed first-quarter results. The company’s earnings exceeded expectations while revenue missed estimates amid an uncertain macro backdrop. Also, IBM announced a $6.4 billion acquisition of cloud software maker HashiCorp.
IBM paid dividends of $1.5 billion in the first quarter. The company generated free cash flow of $1.9 billion in Q1 2024 and expects to deliver free cash flow of about $12 billion in the full year. IBM’s yield stands at about 4%.  
Recently, Evercore analyst Amit Daryanani reiterated a buy rating on IBM stock with a price target of $215. The analyst is positive about the company’s growth levers and expects it to benefit from several tailwinds, including generative artificial intelligence and the acceleration of consulting revenue.
“IBM sounded confident on their ability to see revenues accelerate in H2 on the consulting side from the 2% growth in Q1,” said Daryanani.

While the consulting business in Q1 2024 was hit by the impact of macro challenges on discretionary spending, the analyst noted that there are many catalysts that hint at increased growth going forward. These catalysts include generative AI ramps, backlog conversion and M&A contribution in the second half of 2024 from previously announced deals. Daryanani is also optimistic about durable growth in the mainframe business.
Daryanani ranks No. 243 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 59% of the time, delivering an average return of 13.2%. (See IBM Stock Buybacks on TipRanks)

Hasbro

We move to toymaker Hasbro (HAS). In April, the company reported better-than-expected first-quarter earnings, thanks to its turnaround efforts. Hasbro paid dividends worth $97.2 million in Q1 2024. HAS offers a dividend yield of 4.7%.
Following meetings with Hasbro’s management at JPMorgan’s 52nd Annual TMC Conference, JPM analyst Christopher Horvers upgraded HAS stock to buy from hold while increasing the price target to $74 from $61.
The analyst stated that his estimates for Hasbro are higher than the consensus forecasts, as the Street is underestimating the company’s cost efficiency efforts and digital gaming prospects, both of which should be felt in the second half of 2024 and the first half of 2025.
Despite a shortened holiday season, Horvers is optimistic about the industry experiencing improved growth in 2024 due to recovery in low ticket and short replacement cycle product categories.
“HAS is specifically positioned better in 2H24 given the shift of Transformers to 3Q from 2Q and early benefits from improved merchandising (newness and process improvements under new management),” said the analyst.
Horvers ranks No. 769 among more than 8,800 analysts tracked by TipRanks. His ratings have been successful 60% of the time, delivering an average return of 7.2%. (See Hasbro Technical Analysis on TipRanks)

Target

Finally, let’s look at big-box retailer Target (TGT). In the first quarter of 2024, Target paid $508 million in dividends to shareholders. TGT offers a dividend yield of 2.8%.
Commenting on Target’s first-quarter results, Baird analyst Peter Benedict noted that the company slightly missed analysts’ earnings per share expectations, as higher operating expenses offset increases in gross margin.
Benedict thinks that the post-earnings selloff in TGT stock due to lower-than-expected earnings and price cuts announced by the company seems overdone. He contends that an incremental investment in value and affordability via low pricing was always a part of Target’s strategy for fiscal 2024. The analyst added that the company’s inventory continues to be in good shape.      
In particular, Benedict thinks that management’s aim to restore positive comparable sales growth seems achievable in the fiscal second quarter due to easier comparisons with the prior-year period.
The analyst also thinks that the company “continues to plan prudently given the value-conscious spending environment.”
Overall, Benedict thinks that the risk/reward profile of TGT stock looks compelling. The analyst reiterated a buy rating on Target with a price target of $190.
Benedict ranks No. 77 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 68% of the time, delivering an average return of 15.1%. (See Target Insider Trading Activity on TipRanks) More

The National Oceanic and Atmospheric Administration predicts an 85% chance of “above-normal” hurricane activity in 2024.
NOAA forecasts four to seven major hurricanes — Category 3, 4 or 5 — with winds of 111 mph or higher.
Here are ways you can help prevent devastating storm damage to your home.

Hurricane Irma strikes Miami, Florida, in 2017.
Warren Faidley | Getty Images

Hurricane season has officially begun.
With scientists predicting yet another active year for storms, making your home hurricane resistant has become a more valuable precaution.

The National Oceanic and Atmospheric Administration said in its forecast May 23 that it expects an 85% chance of “above-normal” activity this hurricane season, which spans from June 1 to Nov. 30.
NOAA forecasts 17 to 25 total named storms with winds of 39 mph or higher. Eight to 13 are expected to spiral into hurricanes, and four to seven of those might turn into major hurricanes — Category 3, 4 or 5 — with winds reaching 111 mph or higher.
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“Severe weather and emergencies can happen at any moment, which is why individuals and communities need to be prepared today,” Erik A. Hooks, deputy administrator at the Federal Emergency Management Agency, said in a statement released with the NOAA forecast.
“Already, we are seeing storms move across the country that can bring additional hazards like tornadoes, flooding and hail,” he said. “Taking a proactive approach to our increasingly challenging climate landscape today can make a difference in how people can recover tomorrow.”

How climate change may affect storm activity and damage

Hurricanes are among the most expensive natural disasters in the U.S., and experts say the storm-related damage is likely to become more significant as storms become more severe.
NOAA said “near-record warm ocean temperatures in the Atlantic Ocean” are expected to be among the factors creating the environment for tropical storm formation.
A separate forecast from hurricane researchers at Colorado State University predicts an “extremely active” hurricane season in 2024 due to record-warm tropical and eastern subtropical Atlantic sea surface temperatures.
The water temperatures across the tropical Atlantic in 2024 on average are about 1 degree Celsius, or 1.5 to 2 degrees Fahrenheit, warmer than normal. While it doesn’t sound like much, it’s a big difference, said Phil Klotzbach, a senior research scientist at the Department of Atmospheric Science of Colorado State University.
“The tropical Atlantic right now is record warm,” he said. “That means more fuel for the storms that are trying to form.”

Now’s the time to prepare and have a plan in place.

Phil Klotzbach
a senior research scientist at the Department of Atmospheric Science of Colorado State University

While atmospheric and water conditions may change, it’s wise for residents of storm-prone areas to think about undertaking home projects sooner rather than later.
“Now’s the time to prepare and have a plan in place,” Klotzbach said. “You don’t want to be making these preparations at the last minute.”
Some of the projected effects of global warming on hurricane activity include sea level rise increasing coastal flooding, higher rainfall rates, and storms that are more intense and strengthen rapidly, according to a research overview from NOAA’s Geophysical Fluid Dynamics Laboratory.
“Warmer sea surface temperatures intensify tropical storm wind speeds, giving them the potential to deliver more damage if they make landfall,” wrote the Center for Climate and Energy Solutions, a think tank.
Projections from reinsurer Swiss Re show that since the 1970s, hurricane residential loss expectations have been on the rise, in part due to an increase in hurricane activity and changes in property value from population growth. Improvements in building standards have offset some of that increase, however.

Wind resistance is about preventing ‘pressurization’

Upgrades could help consumers protect their home, typically one of their most valuable assets, from windstorms and other natural disasters.
Making your home hurricane resistant can be a significant financial undertaking. But it’s one that has the potential to pay off as such storms become more intense due to climate change.
In 2024, the national average cost to upgrade an entire house with hurricane windows runs between $1,128 and $10,293, or $100 and $500 per window, including installation, according to home improvement site This Old House. And that’s just one project.
About $8.1 billion could be saved annually in physical damage from windstorms if homes had stronger connections between roofs and walls, or tighter nail spacing, according to a 2022 analysis on hurricane-resistant construction by the Massachusetts Institute of Technology.
Part of the challenge of making home improvements with windstorms in mind is that hurricanes are different and unpredictable, said Jeff Ostrowski, a housing analyst at Bankrate.
“You don’t know if you’re going to be dealing with storm surge, or high winds or heavy rains. You’re trying to prepare for all those things at once,” he said.

It’s like a balloon that blows up, and when it blows up so much … it pops. That’s what happens to your house when the wind comes in. 

Leslie Chapman-Henderson
president and chief executive officer of the nonprofit Federal Alliance for Safe Homes

There are two key elements in your home to help prevent wind-related damage in a hurricane, according to Leslie Chapman-Henderson, president and chief executive officer of the nonprofit Federal Alliance for Safe Homes, or FLASH. You want to:

Make sure the structural strength between the roof and the wall can withstand wind pressure and impact of debris.
Protect all the openings in your home: the doors, windows and the garage.

“What we’re working to prevent is pressurization. It’s like a balloon that blows up, and when it blows up so much … it pops,” she said. “That’s what happens to your house when the wind comes in.” 

Ways to make your home more hurricane resistant

1. Have an inspector assess your house
Having an inspector come out to see your house is a good starting point for your projects. They will provide a report of what areas in your home need to be redone or reinforced against harsh weather.
2. Reinforce your roof
The average cost to replace a roof in the U.S. is about $10,000, but the exact cost will depend on multiple factors, such as the size of your roof, according to the Department of Energy.
Fortified, a nonprofit reroofing program that helps strengthen homes against severe weather, offers guidelines to homeowners planning to replace their roofs on how to withstand challenges in their area, said Jennifer Languell, president and founder of Trifecta Construction Solutions, a sustainable consulting firm in Florida.
“It tells you what you need to do to make your roof more sturdy,” she said.
If you’re not ready to completely reroof your house, adding caulk or an adhesive to strengthen the soffits — the material connecting the roof edge to the exterior walls — will reduce the probability of wind and water gushing into your attic in a storm, said Chapman-Henderson of FLASH. Repair jobs for the soffit and fascia, a horizontal board usually outside the soffit, can cost between $600 and $6,000, according to Angi.com.
Securing the roof to the walls in an existing home with an attic can be done by installing metal clips or straps that strengthen the hold-down effect, she said. While the exact cost will depend on factors such as the size of your home and the scale of the project, such retrofitting costs span from $850 to $1,350, according to Kin, a home insurance company.

You can do all this stuff in terms of hardening the house, but you’re still kind of at the mercy of whatever storm comes.

Jeff Ostrowski
housing analyst at Bankrate

3. Secure your windows and doors
“Do you have hurricane-impact windows? If not, can you put them in?” said Melissa Cohn, regional vice president of William Raveis Mortgage.
If installing new hurricane windows isn’t in the budget, shutters are lower-cost options to protect windows and other openings, said Chapman-Henderson.
Shutters vary by material, installation and price. Removable galvanized storm panels made of steel are $5 to $6 per square foot, making them the most affordable option, according to information compiled by FLASH.
It may be worth installing shutters as an extra layer of protection, even with impact-proof windows, said Trifecta Construction Solutions’ Languell.
Meanwhile, garage doors are the “largest and weakest opening,” said Chapman-Henderson. Replacing the entire garage door for a wind-rated or impact-resistant version can span from $2,000 to $9,000, according to FLASH.
Emergency bracings can be a lower-cost solution: temporary 2-by-4 wood braces can reinforce your nonwind-resistant door for approximately $150 for materials and installation. A garage door storm kit can run up to $750, FLASH data found.
“You can do all this stuff in terms of hardening the house, but you’re still kind of at the mercy of whatever storm comes,” said Bankrate’s Ostrowski.
4. Talk to your insurer about possible discounts
Strengthening your home against disasters may help lower your insurance cost.
Insurers typically factor in natural-disaster risks when deciding what properties to underwrite and at what cost. That’s why some are pulling back in high-risk areas, or raising prices significantly.
Insurance costs also tend to be higher for existing homes than newly built ones, because many older homes were constructed under less stringent building codes.

Once you have an inspector visit your house and recommend projects to make your home more hurricane resistant, talk to your insurance agent about which suggestions are most likely to reduce your premium, Ostrowski said.
Keep in mind that each state is different in terms of what premium reductions are available and to what extent, and it depends on the risks, the company’s exposure and the regulatory environment, said Loretta Worters, a spokeswoman for the Insurance Information Institute.
Homeowners’ insurance premium rates are based on measurable risk, and while mitigation efforts might help reduce the risk, the scientific measurement of catastrophe risk and mitigation efforts is still evolving, she said.
“All analysis of premium pricing related to mitigation efforts is a question of degree of risk, and not removal of risk entirely from the policy,” Worters said.

Grants, financing can help mitigate costs

If the cost of preparing your home against hurricanes is daunting, there may be grants, tax credits and other programs to help lessen the burden.
Some states have set up matching grant programs for disaster retrofits, said Chapman-Henderson.
In Florida, residents may be eligible to apply for grants up to a $10,000 dollar-for-dollar match for approved upgrades such as shutters, roofing, or strengthening a garage door or roof-to-wall connections, she said. There are similar programs in Alabama and Louisiana.
To find out more, homeowners can search for loans, grants or tax credits available in their state through dsireusa.org, which lists all the funding opportunities and incentives for hardening your home against disasters, Languell said.

For people with poor credit or who live in states that don’t have matching-dollar programs, Property Assessed Clean Energy programs allow a homeowner to finance upfront costs of eligible improvements on a property and pay the costs over time through the property tax bill, said Chapman-Henderson.
Energy-efficient mortgages, also referred to as green mortgages, may also be worth exploring. These loans are meant to help homeowners finance eco-friendly home upgrades or outright buy homes that help reduce energy consumption and lower utility bills, although they often have strict loan limits and require additional information during your application, according to LendingTree.
Depending on your hurricane-resistance project, that might be a fit: Sometimes, energy efficiency goes hand-in-hand with durability, Languell said.
“Sealing the underside of your roof sheathing would also help you from an energy standpoint because it’s sealing all the cracks and crevices,” she said, as this repair both keeps your roof on your house and helps avoid water or air leaks.
The same goes for window replacements: “If you are going to replace your windows from a single-pane window to an impact window that has a better energy performance, it’s saving you on energy,” Languell said.
In this new series, CNBC will examine what climate change means for your money, from retirement savings to insurance costs to career outlook. More

The Texas Instruments Inc. logo is seen on scientific calculator packages in Tiskilwa, Illinois.
Daniel Acker | Bloomberg | Getty Images

Company: Texas Instruments (TXN)

Business: Texas Instruments is a global semiconductor company. The company designs, manufactures, tests and sells analog and embedded processing chips for markets, including industrial, automotive and personal electronics. Texas Instruments’ segments include Analog and Embedded Processing. Analog’s product lines include Power and Signal Chain. Power includes products that help customers manage power in electronic systems. Signal Chain includes products that sense, condition and measure real-world signals to allow information to be transferred or converted for further processing and control. The Embedded Processing segment includes microcontrollers, digital signal processors and applications processors. Texas Instruments also offers DLP products, which are primarily used to project high-definition images, as well as calculators and certain custom semiconductors known as application-specific integrated circuits.
Stock Market Value: $177.55B ($195.01 per share)

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Texas Instruments’ 2024 performance

Activist: Elliott Investment Management

Percentage Ownership:  1.4%
Average Cost: n/a
Activist Commentary: Elliott is a very successful and astute activist investor. The firm’s team includes analysts from leading tech private equity firms, engineers, operating partners – former technology CEOs and COOs. When evaluating an investment, the firm also hires specialty and general management consultants, expert cost analysts and industry specialists. Elliott often watches companies for many years before investing and has an extensive stable of impressive board candidates. The firm has historically focused on strategic activism in the technology sector and has been very successful with that tactic. Over the past several years, its activism group has grown. The firm has been doing a lot more governance-oriented activism, creating value from a board level at a much larger breadth of companies.

What’s happening

On May 28, Elliott announced that it has taken a $2.5 billion position in Texas Instruments. It is calling on the company to adopt a dynamic capacity-management strategy and introduce a free cash flow per share target of $9.00+ in 2026.

Behind the scenes

Texas Instruments is one of the most iconic semiconductor companies in the world, with a history dating back nearly a century. It was a pioneering company that invented numerous pillars of modern technology, including the integrated circuit in 1958, the handheld electronic calculator in 1967 and the digital signal processor in 1978. Today, Texas Instruments offers approximately 80,000 unique products in support of more than 100,000 customers with a portfolio of analog and embedded semiconductor offerings. The company positioned itself as a strategic and operational leader following decades of thoughtful strategic decisions and focusing on high-performance analog, one of the stickiest and highest-margin markets in semiconductors. 

Over the years, Texas Instruments has differentiated itself with a commitment to manufacturing as a core competitive advantage. It was the first analog semiconductor company to invest in 300-mm wafer production technology more than 15 years ago, which gave them a 40% cost-per-chip advantage relative to legacy 200-mm production. Today, Texas Instruments sources 80% of wafers internally, of which 40% are cost-advantaged 300-mm wafers. This investment in 300-mm technology resulted in gross margin expansion from 54% in 2010 to 63% in 2023. Additionally, the company has the world’s biggest footprint of geopolitically dependable 300-mm analog manufacturing capacity, with 47% of global capacity outside of China and Taiwan and 85% of capacity in the U.S.
Even though Texas Instruments has the No. 1 position in analog semiconductors, 74% exposure to the most attractive end markets (automotive and industrial), software-like margins (approximately 60% gross margins and approximately 40% operating margins), geopolitical security and company-owned manufacturing capacity, it has significantly underperformed peers in recent years.
Elliott points the finger at the one metric that Texas Instruments has focused on for years as the best indicator of value and management performance – free cash flow per share.
Elliott points out that the company’s history supports this core principle: It grew free cash flow per share at an annual rate of 17% from 2006 to 2019 while the stock generated a roughly 440% total return, outperforming the S&P 500 by about 200% and analog semiconductor peers by around 135% during the period.
During this time, prior to 2021, Texas Instruments spent an average of about $650 million per year in capex over the preceding decade, representing 5% of revenue. Then, the firm spent $2.5+ billion per year in 2021 and 2022. In 2022, the company announced that it would expand its manufacturing capacity with a plan that ultimately called for six new 300-mm fabrication facilities in the U.S. This plan calls for spending $5 billion per year through 2026 and several billion dollars annually thereafter, equating to 23% of revenue, and would nearly triple Texas Instruments’ internal manufacturing capacity by 2030. What did this do to free cash flow per share? Last year, the company generated only $1.47 per share in free cash flow – 77% lower than the prior year and 76% lower than five years ago. It’s also below the free cash flow per share generated at the depths of the 2008-2009 financial crisis, when Texas Instruments’ revenue was 40% below what it is today. 
Elliott does not have a problem with the company increasing capex to accommodate future growth and the 2022 plan, when announced, was not necessarily wrong. However, in 2022, consensus expectations for 2026 revenue were $26 billion. Today, expectations have declined by 24% to $20 billion, which has Texas Instruments now spending billions of dollars to build to a 50% excess capacity. Elliott is asking for the company to do what it had done for years and what the industry does and what economic logic dictates – to modulate capex spend based on demand. Elliott does not even take credit for this plan; the firm uses the company’s own history as a blueprint. In 2003, Texas Instruments chose a site in Richardson, Texas to build the world’s first 300-mm analog fab, known as RFAB 1, in the midst of a semiconductor industry downturn. The company said that it would initially build the facility’s shell and then gradually outfit the facility with equipment in accordance with customer demand, as the equipment is 80% of the cost of the plant and a shell building could be fully equipped within six months to meet demand. RFAB 1 largely sat dormant for the next roughly five years and shipped its first products for revenue from in 2010, with Texas Instruments’ management frequently saying that RFAB “will ramp up consistent with demand.”
Elliott suggests that the company adopt a dynamic capacity-management strategy and introduce a free cash flow per share target of $9.00+ in 2026, representing a level that is about 40% above current investor expectations. The firm thinks that a commitment to prudent capital discipline will restore investors’ confidence, while providing Texas Instruments with flexibility to achieve this target through a combination of strong organic growth, market share gains and sensible capacity management. Elliott is not asking the company to cut 2024 or 2025 capex. The firm simply recommends that the company decrease 2026 capex to $2.75 billion if there is no increase in consensus revenue projections or keep it at $5.0 billion if Texas Instruments can increase its market share by 250 basis points. In either case, Elliott thinks the company can achieve $9.01 of free cash flow per share.
The company’s capex plan has decimated free cash flow per share and is building to a 50% excess capacity. Elliott’s plan restores the free cash flow per share growth and still builds to a 30% or 39% excess capacity. The company might argue that Elliott is being a “short-term minded activist,” but Elliott’s plan creates short-term value without sacrificing any long-term opportunities or value. It arguably creates more long-term value than the company’s plan. Texas Instruments’ performance and capex plan is exacerbated by its poor market communication. Free cash flow is down 77% due to an aggressive capex plan, and the company has not publicly laid out a detailed plan or made a case as to why they need 50% excess capacity.
This is such an easy ask, one has to wonder why Elliott has not worked this out with management before having to resort to a public letter. The firm supports the company’s strategy. It supports management, and it supports capex for 2024 and 2025, but there is no evidence that Elliott requested a meeting with management prior to sending this letter. Sometimes the process is as important as the content, and Elliott would have a much better chance of persuading management had it approached the company privately.
A proxy fight at a company like this would be a Herculean task for any activist, but if there is any activist with the resources and conviction to do it, it is Elliott. Given the firm’s reasonable ask and its support for management outside of this one inexplicable capex decision, we would expect this to settle amicably. We do not see Elliott getting one of their people on this board, but it could use some independent industry executives. Elliott does not go into a situation like this without a Rolodex of industry professionals with whom it consults and who would be available for board duty. If the company thinks it can ignore Elliott, it would be mistaken. But if Texas Instruments needs any additional evidence of Elliott’s conviction outside of the firm’s history, Elliott has built a $2.5 billion position here, which is big by even the firm’s standards.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More

Roth individual retirement accounts offer tax-free growth and other benefits, but some investors earn too much for direct contributions.
Higher earners can bypass the income limits with mega backdoor Roth conversions, which shift after-tax 401(k) contributions to a Roth account.
However, you need to understand plan restrictions and other rules first.

Getty Images

If you’re a higher earner and looking to boost tax-free retirement savings, there’s a lesser-known strategy that could be worth considering.
While Roth individual retirement accounts offer tax-free growth and other benefits, some investors earn too much for direct contributions. For 2024, the adjusted gross income limits for Roth IRA contributions are $161,000 for single filers or $240,000 for married couples filing jointly.

However, so-called mega backdoor Roth conversions — which shift after-tax 401(k) contributions to a Roth account — can sidestep Roth IRA income limits for contributions.
It’s a “no-brainer” after maximizing other tax-advantaged options, assuming you don’t need the cash for other goals, said certified financial planner Brian Schmehil, managing director of wealth management at The Mather Group in Chicago.  
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A mega backdoor Roth conversion makes sense for higher earners who otherwise would have invested their extra money in a brokerage account, which is subject to yearly taxes on capital gains and dividend distributions, Schmehil said.

How mega backdoor Roth conversions work

Generally, mega backdoor Roth conversions are for investors who have already maxed out their pretax 401(k), according to CFP Ashton Lawrence, director at Mariner Wealth Advisors in Greenville, South Carolina. 

For 2024, the pretax or Roth 401(k) deferral limit is $23,000, plus an extra $7,500 for savers aged 50 and older.
Some employees can make after-tax 401(k) contributions above the yearly deferral limits and transfer those funds to a Roth account to kickstart tax-free growth. The max 401(k) limit is $69,000 for 2024, which includes deferrals, employer matches, profit sharing and other deposits.
“It can be huge for a high-income earner,” Lawrence said.
However, not all 401(k) plans allow this strategy. At the end of 2023, only about 11% of 401(k) plans permitted mega backdoor Roth conversions, according to data from Fidelity Investments.
Before making after-tax contributions, experts recommend reviewing your 401(k) documents to understand your plan’s features and restrictions.
While you won’t owe taxes on converted after-tax contributions, there could be levies on growth.

Watch for taxes on after-tax growth

One of the differences between Roth and after-tax 401(k) contributions is the tax treatment of growth. While Roth contributions grow tax-free, after-tax investments are tax-deferred, which means you’ll owe regular income taxes on withdrawals in retirement.
Experts recommend converting after-tax funds regularly to minimize upfront taxes on the conversion. Otherwise, you’ll need to plan for taxes on after-tax growth.
“By doing this right, you can essentially avoid taxation on all growth,” CFP Dan Galli, owner of Daniel J. Galli & Associates in Norwell, Massachusetts, previously told CNBC. “And that’s where the magic is.” More