Rising mortgage rates, lower homebuyer demand and fewer homeowners choosing to sell their homes caused the housing market to slow during the second half of 2022. In the title insurance industry this resulted in a drop in capital adequacy, according to a report released Friday by Fitch Ratings.
In 2022, the title industry’s aggregated risk-adjusted capital (RAC) ratio, which is a measure of resiliency of a financial institution’s balance sheet to endure an economic risk or recession, fell to 168%, compared to 182% in 2021. However, the 168% figure is consistent with Fitch’s guidelines for an “A” category rating.
According to Fitch, this shows that the headwinds faced in the second half of 2022 led to revenue and earnings weaknesses and it also adversely impacted capital levels at some underwriters.
Fitch attributed the decline in industry-wide aggregate RAC score to a drop of roughly 17% in adjusted policyholders’ surplus (APS), which was offset slightly by a decline in target policyholders’ surplus (TPS) due to a lower expense leverage and large loss charge.
In addition, Fitch estimates that the level of redundant statutory loss reserves fell 14% year over year, also contributing to the lower RAC ratio, and that 81% of reported statutory reserves ($5.1 billion) were used in the 2022 RAC ratio and just over 100% of Schedule P reserves ($4.1 billion). Fitch noted that based on Schedule P reporting, recent underwriting periods continue to generate low reported loss ratios compared to historical averages.
The industry base RAC score also fell, dropping 13 percentage points compared to the year prior to 136% at the end of 2022.
When broken down by company, of the Big Four, Fidelity National Financial had the lowest RAC ratio at the end of 2022, after it fell 13 percentage points year over year to 129%, with the largest driver of the decrease being an increase in the large loss and ceded reinsurance risk charge and an almost 32% decline in APS.
Old Republic had the second lowest RAC at 158%, six percentage points lower than a year ago. Fitch attributed this decrease to a 9% drop in surplus and an increase in large loss and ceded reinsurance charges, which was partially offset by a decrease in expense leverage and agency risk charges. First American ranked third, with a RAC ration of 186%, a slight increase compared to a year prior, keeping the firm in line with Fitch’s “A” rating guidelines. The slight increase was driven by an 18% drop in TPS, due to a drop in large loss and ceded reinsurance charges, despite a drop in surplus.
Stewart had the highest RAC at 221%, remaining essentially unchanged compared to a year ago, keeping the firm in line with Fitch’s “AA’ rating guidelines. Fitch attributes Stewart’s results to a slight decline in surplus and a slight improvement in estimated reserve redundancy, as well as a slight decline in TPS. Stewart’s base RAC of 191% is the highest in Fitch’s universe.
Looking ahead, Fitch believes that we will start to see the impact of some of the title firms’ expense reduction measures in the second quarter of 2023 and that the industry should expect net profits for full-year 2023 to be “on par or slightly better than 2022 despite the slowdown in originations and home price declines.”
“The declines in premium volume and reduced operating expenses, with flat to modestly higher capital levels, will promote modest capital adequacy improvement in 2023,” the report reads.
“Title insurers are actively pursuing expense reductions in response to macroeconomic pressure, which coupled with lower premium volumes, will promote modest improvement in capital adequacy in 2023,” Gerry Glombicki, Fitch’s senior director, said in a statement.
In addition, Fitch also expects industry capital levels to, at best, move slightly higher in 2023, benefiting from recent expense reduction measures. However, Fitch Ratings also states the further expense reductions may be necessary if market conditions worsen.
While the confluence of higher mortgage rates, lower home prices and limited existing home inventory continues to put a strain on the industry, the industry-wide decline in operating expenses coupled with flat capital levels is expected to cause an increase in the title RAC ratio by the end of 2023.
I don’t know about Get Rich Slowly readers, but I can tell you that the majority of Motley Fool readers are guys, and that’s true of most financial publications.
That men are more likely to be consumers of investment information could explain the gender gap in financial literacy — especially among older Americans — that some studies have uncovered. I don’t mean to demean the better-smelling sex; in fact, some studies have found women deliver better investment returns than men do. But the deficit in financial literacy is especially troubling given the other challenges women face in retirement planning. Some of these challenges are faced by all women, while others pose particular problems for women who are or were married, especially if they put their careers on hold to raise a family.
The Troubling Statistics Here are some stats to put it in perspective:
Women, on average, earn 76% of what men earn, resulting in an average lifetime earnings differential of $250,000.
Women leave the workforce for an average of 12 years to raise children or care for relatives, resulting in a loss of $550,000 in wages over their lifetimes.
The average woman lives five years longer than the average man. Sounds good, but it means women have to stretch their retirement savings longer.
Some of the biggest health-care costs are incurred in the year prior to death, which reduces financial resources left to surviving family members. Those survivors are most likely to be women, since wives tend to outlive their husbands.
Women of the baby boom generation are more likely to be divorced than women from other generations and to have fewer children to rely on in their old age.
A couple must have been married 10 years before an ex can claim spousal Social Security benefits. But most divorces occur within the first seven years.
In addition, here are some sobering facts from the Center for Retirement Research:
As employers drop defined-benefit plans (pensions) for defined-contribution plans (401(k)s), divorced women may suffer. According to the center’s director, Alicia Munnell, “Traditional pensions give wives an automatic claim on their spouse’s benefits, but 40l(k) plans usually do not.”
Despite being an average of three years younger than their spouses, wives usually retire when their husbands do. This can cut short their careers, savings, and retirement benefits.
Among single women 65 and older, 28.2% are considered poor or near poor, compared with 22.7% for non-married men and 8.1% for married people in the same age group.
A married couple’s combined Social Security benefit is reduced by one-third to one-half when one spouse dies. Also, payments received from a defined-benefit pension might be reduced or eliminated.
What’s a Woman to Do? The solution for all women — single, married, widowed, or divorced — is to take control of their financial futures. It stands to reason that since women live longer, they should consider retiring later. Postponing retirement can mean a larger nest egg and Social Security benefits. Note that Social Security benefits are based on your highest 35 years of earnings. If you worked fewer than 35 years, those no- and low-earning years might be used to calculate your benefit. By working a few more years, you can increase your benefit. Also, non-working spouses can contribute to a spousal IRA, allowing for more tax-advantaged savings.
For married couples, both spouses should be involved in the day-to-day management of the finances. If one person handles the finances and the other doesn’t want to take over after he or she becomes widowed, assemble a list of trusted advisors who could assume those duties.
Remember that a married person can receive a Social Security benefit based on his or her work record or their spouse’s work record, whichever is greater. Because of their lower lifetime earnings, approximately two-thirds of wives receive benefits based on their husband’s record. But if the husband applies for Social Security benefits early — and thus receives a reduced monthly payment — the survivor benefit will also be lower.
For this reason, husbands should consider postponing the application for Social Security benefits as long as possible. The same principle generally applies to defined-benefit pensions, so be sure to consider the benefit to the surviving spouse when you’re deciding when to receive your pension and in what form.
Home prices have been holding firm through most of 2023, but high mortgage rates and a weakening economy could send them lower through the rest of this year, according to researchers at Capital Economics.
In a June 9 report, economists forecasted that waning demand means home prices look poised to fall in the second half of 2023.
While Case-Shiller data showed home prices climbed in both February and March, that was preceded by seven consecutive months of declines. The increases stemmed from resurgent demand, which coincided with easing mortgage rates at the start of the year.
However, the economists pointed out that mortgage rates have rebounded close to the two-decade highs set in October of last year, which will crimp demand once again.
“Given this and a weakening economy, we expect sales will remain low and that price growth will turn negative again later this year,” Capital Economist researchers wrote. “In the rental sector, prices are headed for an even larger correction. We expect apartment capital values will plunge a further 20% in 2023 and 2024, resulting in a peak to trough fall of around 25%.”
Experts also anticipate home prices to decline in 2023, with most of them pointing to buyers being priced out and sitting on the sidelines, lowering demand as rates stay high.
Data from the Mortgage Bankers Association shows that Americans are facing the least affordable market ever.
The group’s Purchase Applications Payment Index, which shows what borrowers can expect to pay for a newly originated mortgage, increased 0.5% in April to a record high of 172.3. A higher reading indicates declining affordability conditions, resulting from increasing loan amounts, climbing mortgage rates, or declining earnings.
“For new home buyers, this is the worst situation since the end of the Great Recession,” Edward Seiler, MBA’s associate vice president for housing economics, told Insider earlier. “Current homeowners that were lucky enough to get a 2.75% interest rate in 2022 are in a great position, but for new home buyers looking to buy a first home, or those looking to move to another home, it’s a very daunting proposition.”
Inside: Working mothers face many challenges when balancing work and family life. This guide offers the best jobs for moms. Find out how to maximize your career opportunities while raising children.
Moms often feel like they can’t have a successful career and be a good moms at the same time.
I completely feel that way too. I struggled to be a stay-at-home mom when my kids were little because I wanted to help out financially to help pay down debt. It took me a few years, but I soon realized there are great ways to make a mom and be a great mom!
I have uncovered plenty of jobs for moms with no degree that offers flexible hours, good pay, and satisfying work.
The best jobs for moms with no degree are ones that offer flexibility, good pay, and room for growth.
It can be tough to balance family and career, but it is possible to find a job that fits your lifestyle.
Here are the best jobs for moms with no degree or with a degree.
What jobs are good as a mom?
As a mom, finding a job that allows for flexibility and growth can be challenging, especially if you don’t have a college degree.
However, there are still plenty of opportunities out there that can help you balance your family and career.
Most importantly, you need to find a job that you LOVE! An environment that you thrive in!
With flexible schedules, remote work options, and potential for growth, these jobs can provide the stability and income moms need while still being able to prioritize their families.
Whether you’re looking for a part-time job or a full-time career, there are plenty of opportunities out there for moms.
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What are the best careers for current stay-at-home moms?
Stay-at-home moms face the challenge of balancing their family responsibilities with the desire to pursue a career.
With the high cost of child care, you need to find a job that allows you to take your kids or one that offers flexibility to work around your kid’s schedules.
Hello- that is me! I am a blogger and day trader when I’m not taxing my kids around.
Your best bet is to check out how to make money online for beginners. That is where you will find the most job options that can be done from home or offer flexible schedules, making it possible to have the best of both worlds.
What are the best careers for former stay-at-home moms?
Returning to the workforce after being a stay-at-home mom can be a daunting task, but there are many careers that are best suited for moms.
You still want careers that offer flexibility, high earning potential, and a good work-life balance.
You need to consider your previous employment, any education or certificates you hold, or skills and/or interests.
As such, the answer will vary for each person reading this post. So, consider any one of these past ideas.
Best Jobs for Moms
There are plenty of great jobs for working moms.
The key is to find a position that offers the right mix of income, hours, and flexibility.
Preferably, you want a low-stress job that pays well without a degree.
Here are jobs to consider if you’re a working mom with no degree.
1. Web developer
Web development is a highly flexible and lucrative career option that is ideal for working moms who may not have a college degree. With the ability to work remotely or part-time, web development is a perfect fit for moms who need a flexible schedule.
This field is rapidly growing and in high demand, making it an excellent choice for those looking for a career change.
To become a successful web developer, proficiency in programming languages like HTML, CSS, and JavaScript is essential. Additionally, knowledge of website design and development tools is crucial to create visually appealing and functional websites.
The skills required for web development can be learned through online courses or boot camps, making it accessible to anyone with an interest in technology and design.
Benefits:
Many web developers work from home or have flexible schedules, making it easier for moms to balance work and family life.
The demand for web developers is expected to grow, making it a stable and secure career option.
Web development is a field that allows for creativity and self-expression.
Pay: The salary for a web developer varies greatly on experience, but it is possible to make six figures.
2. Customer Service Representative
Customer service representative is an excellent career option for working moms who do not hold a college degree.
As a customer service representative, you will be the primary point of contact between customers and the organization, providing information about products and services, taking orders, responding to customer complaints, and processing returns.
You can work from home part-time or full-time, and many times the work takes place remotely. To succeed in this role, you will need to have strong communication and negotiation skills, patience, and the ability to multitask.
Benefits:
The work environment is flexible, and you can work from the comfort of your home.
Job offers great work-life balance and schedule options, making it an ideal choice for working moms.
Pay: As a customer service representative, you can expect to make from minimum wage to $20 an hour.
3. Proofreader
Being a proofreader can be a rewarding and fulfilling career for individuals who have a way with words and a keen eye for grammar. As a proofreader, your primary responsibility would be to review and correct spelling, grammar, and punctuation errors in various types of written content, such as books, websites, and social media posts.
Moreover, the earning potential as a proofreader can be quite lucrative. For instance, Caitlin Pyle, a successful proofreader, made $43,000 in one year working part-time.
To get started as a proofreader, it is important to develop the necessary skills. You can start by attending a free introductory workshop or enrolling in a course that teaches the skills needed to become a freelance proofreader.
Benefits:
Great flexibility as you work on a project basis.
The significant earning potential in the field of proofreading, especially for those who are dedicated and skilled in their craft.
Rewarding career path for individuals with a passion for language and a meticulous eye for detail.
Pay: In terms of salary, the median pay for a proofreader ranges from $15.22 to $26 an hour, depending on experience and the project you are working on. Many other proofreaders earn between $1,000 to $4,000 per month.
4. Flight Attendant
A flight attendant is a career that does not require a college degree but extensive training and certification. It is an ideal job for working moms due to its non-traditional scheduling that allows them to work part-time, take extended periods off, and get out of the house.
Flight attendants can take on trips when they know they have child care covered, and stay at home for days at a time.
Benefits:
Enjoy the perks of travel.
Flexible schedules.
Great health benefits.
Pay: The pay ranges by airline, but the median salary is $65000 per year.
5. Blogger
For moms who are looking for a flexible work-from-home job that doesn’t require a degree, becoming a blogger could be the perfect fit.
With the rise of the internet, there is an increasing demand for content writers and bloggers. These jobs allow you to work from home, set your own schedule, and choose the topics you want to write about. Additionally, these jobs don’t require a degree, making them accessible to anyone who has a passion for writing and a way with words.
Blogging is another option for those who want to write about specific topics they are passionate about and share their insights with others.
Benefits:
Be your own boss.
Flexibility blogging offers – work as much or as little as you want.
Work from home.
Choose the topics you want to write about.
Pay: As a blogger, you are creating passive income through ads, affiliating marketing, and paid sponsorships.
6. Engineer
Returning to work as a mom can be a challenging transition, but leveraging your engineering degree can open up a range of opportunities for you. With your technical skills and problem-solving abilities, there are several career paths that can offer a healthy work-life balance and flexibility to accommodate your family responsibilities.
Here are ways to utilize your degree and still have the flexibility you crave:
Pursue freelance work in your field. As a freelance engineer, you have the freedom to determine your own schedule and take on projects that align with your interests and availability. Platforms like Upwork provide a space for engineers to connect with clients and offer their services on a project basis. This allows you to work on engineering projects from the comfort of your own home, giving you the flexibility to balance work and family life.
Explore part-time or remote positions with engineering firms or companies that value work-life balance. Many engineering firms recognize the importance of accommodating working parents and offer flexible work arrangements. With your engineering background, you can contribute to projects and collaborate with teams remotely, allowing you to work from home and adjust your schedule to meet the needs of your family.
Pursue a career in technical writing or content creation. Many companies and organizations require technical documentation, manuals, and instructional materials to accompany their products or services. With your engineering background, you can leverage your expertise to create clear and concise technical content.
Work as an engineering consultant. As a consultant, you can offer your specialized knowledge and expertise to clients on a project basis. Consulting also provides the opportunity to work remotely or have a flexible work arrangement, making it an ideal option for moms returning to work.
By expanding your knowledge and skill set, you can position yourself for more opportunities and increase your marketability in the engineering field.
Benefits:
This can be done on a freelance basis or as a remote employee, allowing you to work from home and have more control over your schedule.
Take on projects that align with your skills and interests.
Have a fulfilling career that allows you to balance work and motherhood successfully.
Pay: Additionally, engineering offers high earning potential, which can help support a family and provide financial stability. Most engineers earn over $100000 a year.
7. Virtual Assistant
For working moms with no degree, finding a job that balances well with their family life can be a challenge. However, virtual assistant jobs can be the perfect solution.
As a virtual assistant with no experience, you can work from home, set your own schedule, and earn a good income.
A virtual assistant provides administrative support remotely, handling tasks such as email and social media management, scheduling appointments, data collection, customer service, and event planning. The skills required for this job include strong multi-tasking, organizational, and time-management skills, as well as basic computer skills.
Here is a virtual assistant checklist to see if you would enjoy this job possibility.
Benefits:
Be the boss of your own schedule.
Build your own small business if you desire.
Earn significant income
Pay: Most virtual assistants can earn $21 an hour or more pending experience.
8. Teacher
Teaching can be an excellent option for moms who want to work in a field that values education and have the same schedule as their kids.
Plus you can take on one of these summer jobs for teachers to extra cash.
Another option is to become a teacher’s aide that assists teachers in the classroom, helping with tasks such as grading papers, supervising students, and preparing materials. To become a teacher’s aide, you need to have a high school diploma or GED.
Benefits:
Same work hours as your children.
Work in a field that values empathy and care for children, while also providing financial stability and work-life balance.
Most teacher retirement plans are well worth working your full 30 years for that ongoing income post-retirement.
Pay: Unfortunately, teachers are one of the lowest paid salaries for the fantastic work they do. Find out if teachers get paid in the summer.
9. Substitute teacher
Substitute teaching can be an excellent job option for working moms who don’t have a degree. It offers flexibility, a chance to get teaching experience, and a decent daily rate of pay.
A substitute teacher fills in for full-time teachers when they are absent.
This experience can be helpful if you decide to pursue a permanent teaching position in the future.
Benefits:
Allows you to work when your schedule permits. You can note your availability and work as much or as little as you like.
Gain teaching experience without committing to a full school year.
Rewarding job option for some.
Pay: As of right now, there is a shortage of teachers, so the pay for substitute teachers has increased immensely. Substitute teachers can earn a daily rate ranging from $60 to $200, depending on the school district and the region with most substitutes making $22 an hour or more.
10. Consultant
As a consultant, you can use your prior work or life experience to offer solutions and advice to clients in a wide range of areas, including sales, marketing, operations, and management.
Furthermore, consulting can be an ideal way to transition your prior work or life experience into a new career and shorten the time spent in school, making it a great option.
To become a successful consultant, you need to have strong communication skills, the ability to work independently, and experience in your field to run a successful business.
Benefits:
As a consultant, you can enjoy flexible work hours.
The potential to work from home.
Ability to control your schedule.
Pay: The hourly rate for consultants varies depending on the type of consultant and the industry, with some earning high salaries.
11. Day Trader
Swing or day trading is a popular option for individuals who want to work from home and make a living from the stock market. Day traders buy and sell securities within the same day, aiming to make a profit from small price movements.
This job requires a certain set of skills and investing knowledge, as well as specific equipment and software.
It is possible to make money with stocks fast.
Day trading can be a good option for working moms with no degree because it offers flexibility and the potential for high earnings. Personally, I love trading stocks and options. I learned from Teri Ijeoma.
Benefits:
Unlike traditional jobs, day trading allows individuals to work from home and set their own schedules.
Successful traders can make a significant amount of money, with some earning six-figure or seven-figure incomes.
While a degree is not required for day trading, I highly recommend taking this investing course to jumpstart your learning.
Pay: Widely variable as it depends on your risk. You can lose money or make $1000 a day.
12. Claims adjuster
As a claims adjuster, you will be responsible for investigating insurance claims, negotiating settlements, and collaborating with other professionals such as lawyers and medical experts. To become a claims adjuster, you will need to possess relevant experience, strong communication abilities, and proficiency in data analysis.
The work environment can be fast-paced and stressful, but the potential for career growth and the flexibility to work remotely make this an attractive option for many working moms.
Claims adjusters must also maintain accurate records and documentation of all claims activities.
Benefits:
While the work environment can be fast-paced and stressful, the potential for career growth is likely.
Flexibility to work remotely make this an attractive option for many working moms.
Pay: Claims adjusters can advance to higher positions within the insurance industry, such as senior claims adjuster or claims manager. Additionally, many claims adjusters work as independent contractors or consultants, providing even more flexibility and potential for career growth.
13. Bookkeeper
As a bookkeeper, one is responsible for monitoring a company’s cash flow by keeping track of transactions and preserving copies of receipts. The job requires great attention to detail, excellent organizational skills, and an ability to analyze and interpret financial data.
This job can be done virtually, making it an excellent position for moms who want to improve their work-life balance.
Bookkeeping does not require a degree and one can earn a decent hourly pay or salary. To become a bookkeeper, one must have bookkeeping skills, which can be learned from online courses.
Benefits:
Flexible working hours, allowing them to work whenever suits them.
Great for someone who loves analytics.
Pay: Most bookkeepers enjoy relatively high hourly salaries. They can work as independent contractors or be paid as a salaried employee.
14. Nanny
Being a nanny is an excellent option for moms who want to balance work and family life.
As a nanny, you would be responsible for taking care of children, cooking, cleaning, and running errands. The best part about being a nanny is the flexible hours, which allow you to work part-time or full-time while still being present for your family.
Finding a job that allows moms to work while still being present for their families is crucial, and being a nanny provides the perfect solution.
Benefits:
Be able to care for your own children at the same time.
Find a nanny job that works for your circumstances.
Stay young and playful while working with kids!
Pay: The pay varies widely for a nanny, but once you have experience and great references, you can earn good money.
15. Marketing Specialist
Marketing can be an excellent job choice for moms looking for flexibility, potential job growth, and the opportunity to work remotely. With the advancement of digital marketing, moms can now pursue a career in marketing without having to leave their homes or work in a traditional office setting.
As a digital marketer, there are various specializations and skills that can be honed to advance in the field. These include SEO (search engine optimization), web development, content creation, and marketing strategies.
By continuously learning and improving these skills, moms can enhance their professional reputation and open doors to new opportunities within the marketing industry.
Benefits:
Ability to work from home.
Work flexible work hours that can be adjusted to fit their family’s needs.
Digital marketing also offers potential job growth and career development.
Pay: As a marketing specialist, the pay can vary greatly if you work as a freelancer or a bigger corporation.
16. Financial Advisor
Financial advising can be an excellent career path for working moms without a degree, offering flexibility and opportunities for growth.
Honestly, I know many people who have successfully entered the workforce as financial advisors.
The first step towards becoming a financial advisor is to obtain relevant certifications and licenses, such as the Certified Financial Planner (CFP) designation. Once certified, financial advisors can work for a firm or start their own business, providing financial advice to clients.
Pursuing a career as a financial advisor can offer a good salary and work-life balance, making it a great option for working moms.
Benefits:
Help others pursue a life of financial independence.
Perfect for someone who loves numbers!
Pay: The pay for a financial advisor varies greatly, but the median salary is $75000 a year.
17. Writer
Becoming a writer can be a great career choice for moms who want to work from home and have a passion for writing. With flexibility, the potential for a decent income, and no degree required, it’s an accessible and rewarding career path.
Highly recommended to take this writing course to jumpstart your networking opportunities.
As a writer, you can work as a content writer, staff writer, or freelance writer.
Content writers produce content for websites, such as blogs, news aggregators, and e-commerce sites.
Staff writers write articles for publications, such as magazines or newspapers.
Freelance writers write for clients without being permanent employees.
What’s more important is having a way with words, strong research skills, and a passion for writing.
Benefits:
Flexibility to work on a story when you are able to.
For those with a love of English, this is a great way to express yourself.
Pay: While the average hourly rate for writers and bloggers varies, it’s possible to earn a decent income in these fields.
17. Social Media Specialist
As a social media specialist, you will manage social media accounts, create and post content, increase engagement, analyze data, and monitor social media. This role requires skills such as graphic design, writing appealing content, an eye for design, and flexibility.
Moms possess many of these skills naturally, such as multitasking, creativity, and communication. These skills can be applied to social media management, including content creation, scheduling, and community management.
Social media management is also a growing field. As a result, this job can provide moms with a stable income and career growth opportunities while allowing them to prioritize their family life.
Benefits:
Great for those who personally love social media.
Easy to work anywhere.
Pay: With an average salary of $52000 a year, this job can be done from home, making it a perfect fit for moms.
18. Human resources manager
Work-life balance is crucial for working moms, and a career as a human resources manager can provide just that.
Human resources managers are responsible for managing employee benefits, overseeing hiring processes, and handling employee relations. This job offers flexibility, including the ability to work remotely or part-time.
A career in human resources management can positively impact a working mom’s family life by providing a consistent schedule that doesn’t involve weekends or holidays.
Benefits:
HR managers are in high demand in many industries, as every organization requires HR expertise to manage its workforce effectively.
Opportunities for personal and professional growth.
Make a positive impact on employees’ lives.
Ample networking opportunities with employees, upper management, and external stakeholders.
Pay: Human resource managers often receive competitive salaries, with average annual earnings exceeding $120,000.
19. Sell on Printables on Etsy
In recent years, the demand for printable products has grown tremendously, making Etsy a great platform for working moms without a degree to earn a steady income from home.
Printables are digital files that customers can download and print at home, such as wall art, planners, calendars, and invitations.
The best part is that once you create a printable, you can sell it repeatedly without having to invest more time or money.
Check out the list of the most popular printables you can create.
Benefits:
A flexible job that allows you to work from home and set your own hours.
Earn a steady income from a single printable, which means you can focus on creating new products and growing your business.
Able to start s small business.
Pay: This is a passive income. Learn how much these sellers have made.
20. Retail associate
Many moms become retail associates to get a discount from the retailer!
Working in retail can be a rewarding and dynamic career choice. Retail jobs are generally physically demanding, as employees are often on their feet for long periods and may need to lift and move heavy items.
The nature of retail work can also be stressful, especially during busy periods such as holidays or sales events. However, it can also be an opportunity to develop and utilize various skills, particularly when interacting with customers.
Benefits:
Working part-time hours while your children are at school.
Discounts to the retailer you work.
Flexible scheduling hours.
Pay: This is a minimum wage job earning $13 an hour to $18 an hour.
21. Nursing
Nursing is a fulfilling career for moms who enjoy taking care of others.
While most nursing positions require a degree, there are also entry-level jobs available for those without a degree. Certified nursing assistant (CNA) and licensed practical nurse (LPN) are two such positions.
Both positions require certification and training, which can be completed in a matter of months. Pursuing a career in nursing as a working mom without a degree offers the flexibility to balance work and family while also providing the opportunity for career advancement.
Benefits:
Flexible scheduling around what works best for your family.
Ability to work part-time or full-time.
Great career option to take fewer hours while your children are little and more hours when they are in school.
Pay: The average hourly rate for nursing varies depending on where you work. Most certified nurses make between $32 an hour to $50 an hour.
22. Transcriber
As a transcriber, you will listen to audio files and create a document that contains an accurate record of what was said. This is one of the best jobs for moms with no degree, as most transcription companies just require you to pass their test before they give you work.
To become a successful transcriber, you will need fast typing skills, attention to detail, and the ability to sit for long periods of time. You may also need to purchase special transcribing equipment, depending on the company you work for. Most transcription jobs will require the ability to type 75 WPM or more.
This is a great non phone work from home job.
With the right skills and tools, you can become a successful transcriber and earn a decent income. So if you are a fast typer with an eye for detail, consider taking a free mini-course to find out if this is the right job for you.
Benefits:
Transcription jobs from home are available remotely and work as many hours as you want.
Set your own schedule.
Make money by meeting deadlines.
Pay: Generally, transcriptionists earn around $19 per hour in the US, but this can be more depending on your employer.
23. Graphic Designer
Graphic design is an excellent job for working moms with no degree, as it allows for significant flexibility in working hours and can be done from home.
As a graphic designer, you will be responsible for creating logos, designing websites, and developing marketing materials such as brochures and flyers. To succeed in this field, you’ll need to be creative, detail-oriented, and able to work with clients to meet their specific needs.
Benefits:
Balance their family responsibilities with a fulfilling and rewarding career.
Perfect to showcase your creative side.
Pay: With a median annual wage of $48000 per year, graphic design is a lucrative career that offers plenty of room for growth and advancement.
24. Online Coach
Being an online coach is a great job for individuals who are looking to earn money online without a degree. While some online coaches do gain certifications, it is not always necessary.
There are several types of coaching fields to enter, including career coaching, life coaching, health coaching, family coaching, and fitness coaching. It is advisable to choose a field that you have experience in or feel comfortable handling.
As a life coach, for example, you can assist clients in achieving their goals, dealing with self-esteem issues, or working on relationships.
Benefits:
Freedom to set your own schedule and work from home, which allows you to balance work and family responsibilities.
Potential to earn a good income, especially if you specialize in a high-demand niche and build a strong client base.
Viable career option for working moms without a degree.
Work remotely from their computers and communicate with clients online.
Pay: Most coaches make between $30 an hour – 100 an hour pending experience.
25. Counselor
Counseling is indeed a vital service that plays a crucial role in helping individuals and families overcome difficult challenges.
As a counselor, you work closely with clients to address various issues and support them in achieving their personal and professional goals.
Counselors can work in diverse settings, including private practices, mental health centers, schools, substance abuse centers, or government institutions. This allows for a wide range of opportunities and flexibility in terms of work environment and schedule. Additionally, advancements in technology have made it possible for counselors to provide their services online, further expanding the accessibility and convenience of counseling.
Benefits:
Flexibility to work part-time or full-time.
Making a positive impact on the lives of others and contributing to their well-being is a significant aspect of counseling that attracts many individuals, including moms, to pursue this profession.
Offers a fulfilling and financially rewarding career path.
Pay: The average hourly rate for counselors is $39 an hour.
Other Jobs Options to Consider:
Home Health Aide: Care for patients in their own homes. Many opportunities for part-time work.
Personal Care Aide: Assist clients with daily tasks such as bathing, dressing, and grooming. Flexible schedules are available.
Event Planner: Plan and organize events such as weddings, conferences, and parties. Can often work on a freelance or contract basis.
Photographer: Take photographs for a variety of purposes such as weddings, events, or marketing materials. Can often work on a freelance basis.
Personal Trainer: Help clients achieve fitness goals through exercise and nutrition coaching. Can often work on a freelance or contract basis.
House Cleaner: Clean homes or businesses on a regular basis. Offers flexibility in terms of schedule and workload.
Online Tutor: This job involves teaching students online in various subjects. Skills required include teaching ability, subject expertise, and communication. To balance work and family life, set a schedule and prioritize family time.
Translator: This job involves translating written or spoken content from one language to another. Skills required include fluency in multiple languages, attention to detail, and communication. To balance work and family life, set a schedule and prioritize family time.
Pet Sitter/Dog Walker: This job involves caring for pets while their owners are away. Skills required include love for animals, responsibility, and time management. To balance work and family life, set a schedule and communicate with clients to ensure availability.
Personal Shopper: This job involves shopping for clients and delivering their purchases. Skills required include organization, communication, and time management. To balance work and family life, set a schedule and communicate with clients to ensure availability.
What to consider when choosing a job for working moms without a degree?
Working mothers without a degree face many challenges when it comes to finding a job.
They need to find a balance between their family and career commitments, and they also need to find a job that is flexible enough to accommodate their schedule. Here are the things to consider when looking for a new job.
1. Hours and Shiftwork
For working moms being able to control their own schedules allows them to be present for their children’s needs while also earning an income is extremely important. It is important to consider the hours you have available to dedicate to a job along with the shiftwork necessary when choosing a job.
Think about whether you want to go part-time or full-time.
Also, weekend shifts are also an option for those who need to work around their family’s schedule. Even better, remote work has become increasingly popular and offers even more flexibility.
2. Salary
Salary considerations play a significant role in achieving this stability a mom desires.
It is essential to explore different salary options and negotiate to ensure that you are being fairly compensated for your skills and experience.
Consider starting salary, the potential for growth, benefits packages, and negotiation when exploring job options.
3. Responsibility and Stress
As any working mom can tell you, being a working mom can be an incredibly stressful experience. Mothers often have to balance their work responsibilities with household chores and childcare, which can be overwhelming.
Finding a job that balances responsibility and stress is crucial for working moms to maintain their mental and physical health, and to be able to provide for their families.
4. Level of Education Required
As a working mom, it is important to consider the level of education required when choosing a job.
Plus, it is crucial to research job requirements and considers personal interests and skills when selecting a job. By doing so, working moms can find a job that offers flexibility, decent pay, and job satisfaction.
5. Professional Licenses and Certifications
Obtaining, professional licenses and certifications is an excellent way for working moms without a degree to increase their job opportunities, earn higher salaries, and improve job security.
These certifications and licenses are often required for specific industries, such as healthcare, education, and law enforcement.
With so many options available, it’s important for working moms to explore the various certifications and licenses that are relevant to their industry and career goals.
6. Work-Life Balance
Balancing work and family life is a challenge for anyone, but it can be particularly daunting for working moms.
However, there are several factors to consider when choosing a job that can help achieve a work-life balance:
Flexible Work Hours: A job with flexible work hours can help working moms without a degree balance their work and family responsibilities. This can include part-time work, remote work, or jobs that allow for flexible scheduling.
Remote Work Options: Remote work can be an excellent option for working moms without a degree who need to work from home.
Company Culture: A supportive company culture can make all the difference for working moms. Look for companies that offer family-friendly policies such as paid time off, flexible work schedules, and on-site childcare.
By prioritizing work-life balance, working moms can achieve success in both their personal and professional lives.
7. Vacation and Time Off
For working moms without a degree, vacation and time off are crucial benefits to consider when evaluating a potential job offer.
Here are three factors to consider when reviewing a company’s vacation and time off policy:
The number of vacation days offered, including paid time off for sick days and personal days.
The flexibility of the policy, such as the ability to take time off for family emergencies or unexpected events.
The potential for extended leave, such as maternity or paternity leave.
8. Career Advancement
When considering a job as a mom, career advancement is an important consideration. It is essential to choose an employer and a job that offers opportunities for growth and progression in your chosen field.
Advancing in your career not only allows you to achieve personal and professional goals but also provides financial stability and job satisfaction.
Don’t underestimate the power of setting clear career goals and actively working towards them.
By investing in your skills, building a strong network, and setting clear career goals, you can pave the way for a successful and fulfilling career as a mom.
9. Job Security
Job security is especially significant for working moms, who may face more challenges in finding and keeping a job.
Typically, working moms are limited in their job options.
So, look for careers that provide financial security as well as companies with a solid track history.
This is the perfect side hustle if you don’t have much time, experience, or money.
Many earn over $10,000 in a year selling printables on Etsy. Learn how to get started by watching this free workshop.
If you’ve ever wanted to make a full-time income while working from home, you’re in the right place!
This intensive training combines thousands of hours of research, years of experience in growing a virtual assistant business, and the power of a coach who has helped thousands of students launch and grow their own business from scratch.
FAQ
You can search for remote jobs, part-time jobs, or freelance gigs.
You can also look for companies that have flexible policies in place. Also, reach out to your network and ask if anyone knows of any openings that are flexible.
Stay-at-home moms can find a variety of jobs that can be done from home and offer flexibility to work around their schedule. Here are some of the options available:
Working from home offers the benefit of having a better work-life balance and the ability to be present for their families while still earning an income.
Which Job for Moms will You Choose?
For moms who want to balance family and career, finding a job that offers work-life balance and career growth is crucial.
Not only can working increase income, but it can also lead to career advancement and personal fulfillment.
Above, we listed many great jobs for moms. You can choose a job that allows you to work from home, or one that provides flexible hours. Also, many moms like me prefer one of these early morning jobs.
Whatever you choose, make sure you find a job that you enjoy and that allows you to spend time with your family.
Know someone else that needs this, too? Then, please share!!
It can be satisfying to watch your 401(k) plan balance grow over time as you contribute to it. But what happens when those contributions stop? The amount your account will grow depends on how much money you have in it and how the market performs. Here is how you can estimate the future performance of your 401(k). If you’d like personalized advice about planning for retirement, consider working with a financial advisor.
What Is a 401(k)?
A 401(k) is an employer-sponsored retirement account that offers tax benefits. A traditional 401(k) will be withdrawn from your paycheck pretax and will only be taxed when you withdraw from it in retirement. A Roth 401(k) is similar but reversed, in that the money that goes into it is already taxed, so it won’t be taxed when you withdraw from it in retirement. You can withdraw from either type of 401(k) penalty-free beginning at age 59 ½.
When you sign up for a 401(k) plan, you’ll be presented with investment options when you complete the paperwork. Once you deposit money, it will be invested according to your selections.
401(k) plans were specifically created to incentivize workers to save for retirement. If you contribute to a traditional 401(k), your taxable income is reduced due to the 401(k) withholdings. If you’re contributing 6% of your income to a 401(k), you won’t owe taxes on that percentage of your income. With a Roth 401(k), instead of saving on taxes in the year you contribute money to your 401(k), you’ll enjoy the savings when you withdraw it in retirement.
How Does a 401(k) Work?
You may be asking yourself, how does a 401(k) plan make money? The main way you will see your 401(k) grow is from your contributions (and your employer’s, if they offer a match). Once you stop contributing, what happens next?
So, remember the investment options you were given when you signed up for the plan? Your choices told your 401(k) provider how to allocate the money in your 401(k). A common investment option is a target-date mutual fund. This type of fund will contain a mixture of investments, including stocks and bonds, managed to maximize returns while minimizing your risk as you near retirement age. Generally, you’ll be advised to invest in riskier funds when you’re younger and move towards more stable investments as you age.
The money you see in your 401(k) and what you’ll be able to withdraw in retirement are made up of contributions, plus earnings from your investments, plus interest.
How Does It Grow When You Stop Contributing to It?
When you stop contributing to your 401(k) plan, don’t expect to see your balance grow at the same rate. But how much your balance will grow will depend on a few factors.
Interest is one of the big factors in the continuing growth of your 401(k) plan’s balance. When you select a fund to invest in, that fund may include CDs, bonds and/or money market funds—all investments that generate interest. And the larger your balance, the larger those interest payments will be. Simply put, 5% of $10,000 is more than 5% of 100,000.
Other investments might generate earnings based on the market, such as stocks and ETFs. You may see greater volatility in these investments, with earnings either being very good or very bad. When you choose what to invest in, you set your risk profile—riskier investments have the promise of a higher payout but also can suffer markedly when the market turns.
One of the most important things to consider when thinking about how much your 401(k) balance will grow once you stop contributing is compounded growth. When you earn money, either from interest or earnings, that amount is put back into your 401(k) and invested. For a very simple example, let’s say you have $1,000 that you invest for one year and it earns $100. Your 401(k) will add that $100 to the pot and invest $1,100 the next year for a return of $110.
On a small scale like that, it might not seem impressive. But compounding interest and earnings is the most meaningful way that a 401(k) plan will continue to generate growth after you stop contributing. If you add a couple zeroes to the end of those example figures, you’ll soon see the point.
The Bottom Line
While your 401(k) account will likely continue to grow after you stop contributing to it, that growth will be limited by the market, your plan’s balance and other factors. The growth can vary over time as any one of those things changes. In order to get a good idea of what yours could look like you may need to work directly with a professional financial advisor to help you calculate the estimation for your account.
Retirement Tips
Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s free retirement calculator to see if you’re on track to meet your retirement goals.
You may find your company’s 401(k) plan may not be the best option for you. And you may get better investment choices and tax breaks if you open an IRA or a Roth IRA. To help you decide, we published articles on the best IRAs and the best Roth IRAs.
We hear a lot about the doubts over the future of Social Security. Here are a few I’ve come across:
“Three-fourths of those 18 to 34 don’t expect to get a Social Security check when they retire.” — USA Today
“My husband and I are both 28, and we laugh every time we hear [‘yes, you’ll receive Social Security’]. No, we won’t receive Social Security, even though we’ve both been paying into it since we were teenagers…I can’t think of one of my peers who expects Social Security to still be around when we’re retirement age. Call us bitter.” — A comment to my last column (“When Will You Be Able to Retire?”)
“Six in 10 Americans who have not yet retired believe they will get no Social Security benefits when they retire, more pessimistic than at any time since Gallup began asking this question in 1989.” — Gallup
“According to one survey, 100% of people married to Robert Brokamp wish he would shave his head rather than try to pull off a comb-over.” — My wife
If you’re among the doubters (of Social Security, not my hairdo), then listen up: The following paragraph is the most important group of words you’ll ever hear regarding Social Security. It’s key to understanding how the program works, and whether you’ll get anything. Here it is:
Social Security is predominantly a pay-as-you-go program. Most of the payroll taxes that are collected from today’s workers go into the checks of today’s beneficiaries. Thus, as long as there are people working and paying payroll taxes, there will be money to pay Social Security benefits.
According to the most recent Social Security Trustees report, from 2037 to 2084 payroll taxes will be enough to cover 75% of projected benefits. That’s not great, but that’s not nothing, either.
People who think that they won’t receive any Social Security benefits must believe one or all of the following three things:
In the future, people won’t work.
In the future, the government won’t collect payroll — a.k.a. FICA (Federal Insurance Contribution Act) — taxes. Currently, workers “contribute” 6.2% of their paychecks to the Social Security system, and their employers match with another 6.2%; the self-employed pay the whole 12.4%. Another 2.9% goes toward Medicare. As you know if you’ve looked at your paycheck, it’s a separate withholding from income taxes. In fact, the majority of Americans pay more in FICA taxes than they do in income taxes.
In the future, Social Security will be means-tested to such a degree that the “wealthy” (an arbitrary designation, to be sure) won’t receive any benefits. Those who don’t think they’ll receive Social Security assume they’ll be among these “wealthy.”
I don’t think Nos. 1 and 2 are likely. No. 3 is possible. The program is already means-tested to a degree, since the percentage of income that is replaced by Social Security decreases as lifetime earnings increase. However, I think that if changes to the means-testing formula result in a group losing their benefits completely, it will be a small group — certainly not 60% to 75%, as the aforementioned surveys suggest. I find it very unlikely that a future Congress — elected by future citizens — will change the program in a way that the majority of people who pay FICA taxes won’t get at least some benefits.
Those Crazy Trust Funds
For many years, the payroll taxes collected were more than needed to pay current benefits. The surplus went into the Social Security trust fund, which invested the money in special-issue U.S. Treasury bonds. However, this year — thanks to the stinky economy — benefits will exceed revenues. That’s projected to temporarily reverse, but at some point in the middle of the next decade, the retirement of the baby boomers will cause benefits to exceed taxes. This is where the trust funds come in. They’ll be sold to cover the shortfall.
In my opinion, this is the essence of questions about the future of Social Security: What, exactly, are we to make of these trust funds? Are they truly assets? Here are the two arguments:
Those who think that the Social Security system is essentially sound will point out that of course the trust funds are real assets. They’re full of U.S. Treasuries, which are considered the safest investments in the world.
Those who think otherwise point out that since Treasuries are federal government debt, the trust funds contain just worthless pieces of paper with a note written on them that says, “Dear Uncle Sam: I owe you lots of money. Love, Uncle Sam.”
I have to admit, I haven’t quite decided to which camp I belong. I’m inclined to go with the latter. After all, when, say, 2020 rolls around, and the Social Security Administration needs some money from the trust fund, it will take one of these special-issue Treasuries to Uncle Sam and want to exchange it for cash to be sent to retirees. Where will that cash come from? I almost think I need to see a spreadsheet or detailed flowchart or something to fully understand how all that will work. If you have suggestions for how to accurately think about the trust funds, I’m all ears.
For Now, Plan on Getting Less
That’s enough talk about Social Security for now (assuming you’re still reading). From a financial-planning perspective, I’ll reiterate my advice from my last post. If you are in or near retirement, plan on getting your benefit. If you’re younger, play it safe and plan on getting 25% to 75% of your projected benefit. But plan on getting something.
I’m sure you have your own thoughts and opinions about Social Security, and I encourage you to share them below. However, let me say this: Often, discussions following articles about Social Security turn into political brawls that degenerate into name-calling and general silliness. So please, all you right-wing nutjobs and left-wing commies, let’s keep it civil. Stick to the topic of Social Security and the facts. And maybe advice for creating a sweet comb-over.
Catch-up contributions are about to change. Starting in 2024, some workers who make catch-up contributions to employer-sponsored retirement plans, like a 401(k), will have to put this money in a Roth account. This means that they cannot deduct these contributions from their income taxes, but will be able to withdraw the account’s gains later in life tax free. This change will apply to anyone who earns $145,000 or more. Here’s what’s going on.
Consider working with a financial advisor as you evaluate your options for building a nest egg.
What Are Catch-Up Contributions?
Every tax-advantaged retirement account has a maximum contribution limit. This is the cap on how much money you can put into the account each year without paying taxes. For example, in 2023, an individual can only contribute up to $22,500 to his or her 401(k) account. For IRA account, you can contribute up to $6,500.
In order to incentivize retirement savings, the IRS allows “catch-up contributions” for those who are age 50 or older. So if you’re over the age of 50, you can contribute an extra $7,500 to a 401(k) or an additional $1,000 to an IRA in 2023. This is on top of the aforementioned contribution cap.
Historically, the rules around catch-up contributions have been based on the underlying account. If you make catch-up contributions to a 401(k), for example, you receive the standard tax deduction of that account. If you put catch-up contributions in a Roth IRA, you pay taxes up front and pay no taxes on withdrawals.
For higher-earning households, however, that’s about to change.
Section 603 Changes How Catch-Up Contributions Work
In 2022, Congress passed the law known as SECURE 2.0, a sweeping collection of changes to retirement in the United States. Although it had a few signature elements, most notably the transition of 401(k) programs from opt-in to opt-out, most of the law makes detailed changes to a very large number of programs.
But detailed changes aren’t the same as small ones, a fact that has become quite clear with the now-infamous Section 603.
In Section 603 of the SECURE 2.0 Act, Congress changed how catch-up contributions work for higher-earning households. Specifically, with employer-sponsored plans such as a 401(k), if you earned more than $145,000 in the previous tax year you must make all catch-up contributions on a Roth basis. This means that you cannot deduct the income they use for catch-up contributions, but will not have to pay taxes on the money or its earnings when you withdraw it later in life.
This rule does not affect IRA plans.
Contribution limits will not change, since individuals will still contribute this money to an employer-sponsored plan. Instead, employers who allow catch-up contributions will need to begin offering Roth plans in addition to their standard pretax retirement plans. This has led to some pushback, with retirement industry groups citing the time and costs involved with establishing new Roth plans.
These changes are set to take effect beginning Jan. 1, 2024.
What Does This Mean for Taxes?
The first thing to note is that Section 603 does not phase in. Individuals who earn $144,999 or less are exempt. They may fully deduct the income that they contribute to an employer-sponsored retirement account, including any catch-up contributions.
This section fully applies to individuals who earn $145,000 or more. They may fully deduct the income that they contribute to a 401(k) account up to the standard annual limit. They cannot deduct any income that they use for catch-up contributions and must pay taxes on that money. They must put this money into a Roth account, which will return its growth untaxed.
Specific tax impact will depend entirely on an individual’s income. Take, for example, someone who earns $150,000 and makes the maximum catch-up contributions. Without addressing other deductions or other tax implications, the impact on their income tax would look like this:
Currently they would be able to deduct this contribution, allowing them the following deduction:
Income – $150,000
Top Tax Bracket: 24% for income between $89,076 – $150,000
Tax Deduction – $7,500
Remaining Taxable Income – $142,500
Tax Deduction – 24% x $7,500 = $1,800
Final Income Taxes – $24,928
Income tax deductions always come from the highest income bracket first. In this case, the individual’s top tax bracket is 24%. They can deduct $7,500 from the money currently taxed at 24%, giving them a deduction worth $1,800 in total tax savings.
Starting in 2024, this same person will not be able to deduct catch-up contributions. Assuming the same catch-up contribution limit (which will increase each year), this person’s new taxes will look like this:
Income – $150,000
Tax Deduction – $0
Remaining Taxable Income – $150,000
Final Income Taxes – $26,728
The individual has functionally $1,800 less with which to invest. However, while it will make retirement saving more expensive up front, it will also incentivize employers to establish more Roth options in their retirement plans. These plans have much larger tax advantages in the long run, since ultimately the investor pays no taxes on the larger amount withdrawn in retirement, rather than the smaller amount invested up front.
For individuals looking to avoid this tax issue, a good option would be to open an IRA. These are pretax accounts, and you can have both a 401(k) (or equivalent) and an IRA at the same time. While IRAs have much lower maximum contribution limits, you can generally invest almost as much in an IRA as you could invest through catch-up contributions, making this a good equivalent investment strategy.
This Issue Has Been Mistaken for a Mistake
The new tax cap is not a mistake. The original text of SECURE 2.0 contained a drafting error related to catch-up contributions. In brief, among its changes, Section 603 deleted a small paragraph in the Internal Revenue Code. The deleted section of the Internal Revenue Code (IRS) establishes that, if the IRS allows a plan participant to make catch-up contributions to a 401(k) or other employer-sponsored plan, those contributions qualify for pretax status.
The idea was to prevent contradictory language in the tax code. But in deleting this section, instead of specifying that it only applies to some taxpayers, Congress potentially made pretax catch-up contributions illegal for everyone. Members of Congress have since stated that this was a drafting error and they intend to correct it, although at time of writing it has not been fixed.
Some reporting has conflated this error with the new tax cap, suggesting that Congress might roll back the $145,000 cutoff. This is inaccurate. The new catch-up contributions cap was intentional.
Bottom Line
If you earn more than $145,000 per year, starting in 2024 you will not be able to deduct catch-up contributions that you make to an employer-sponsored plan. Instead, all such contributions will have to go into a Roth plan, on which you will pay taxes up front but not when you withdraw the gains.
Retirement Planning Tips
A financial advisor can help you build a comprehensive retirement plan, including how to handle catch-up contribution opportunities. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Catch-up contributions can be a great way to add extra liquidity to your retirement account, particularly given that most people will work and save for almost 20 more years. So it’s worth making the absolute most of them.
Eric Reed
Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.
It’s been a good week for anyone looking to buy or refinance. Mortgage rates have improved slightly for the first time in a couple weeks.
We got the monthly jobs report out this morning and that came in below expectations, helping to keep rates on the low side for the week. Read on for more details.
Where are mortgage rates going?
Rates finish down on the week
Today the employment situation (a.k.a. the monthly jobs report) for April got released.
That report comes out the first Friday every month and is one of the most closely watched reports.
After a disappointing headline reading last month analysts were calling for the labor market to bounce back with about 191,000 jobs added.
Unfortunately, that wasn’t the case as the headline reading came in at 164,000.
Average hourly earnings also missed the mark, coming in one tenth below what analysts had called for at 0.1%.
Mortgage rates typically move higher when positive economic data comes out so a weaker report such as this one kept rates from spiking.
Rates move lower in Freddie Mac Primary Mortgage Market Survey
Some good news for anyone looking to buy or refinance right now is that mortgage rates moved lower in the Freddie Mac PMMS this week. Here are the numbers:
The average rate on a 30-year fixed rate mortgage fell by three basis points to 4.55% (0.5 points)
The average rate on a 15-year fixed rate mortgage inched up one basis point to 4.03% (0.4 points)
The average rate on a 5/1-year adjustable rate mortgage fell five basis points to 3.69% (0.3 points)
Here is what the Freddie Mac Economic and Housing Research Group had to say about mortgage rates this week:
“After steadily rising in most of April, average mortgage rates dipped slightly over the past week.
The 30-year fixed mortgage rate declined three basis points to 4.55 percent in this week’s survey. While mortgage rates have increased by one-half of a percentage point so far this year, it has not impacted home purchase demand, which continues to grow this spring. The observed buyer resiliency in the face of higher rates reflects the healthy economy and strong consumer confidence, which are important drivers of home sales activity.
It’s also good news that first-time buyers appear to be having more success so far this year – despite higher borrowing costs and home prices. Our data through April show that first-timers represent 46 percent of purchase loans, up from 43 percent over the same period a year ago.”
Rate/Float Recommendation
Lock now before rates rise
Mortgage rates held steady this week which is great news for anyone looking to buy a home or refinance their current mortgage.
It’s possible that mortgage rates stay in a tight range for a while but it does seem as though there is a greater likelihood of them rising than falling.
So if you want to avoid the risk of a higher rate, we recommend you lock in a rate soon.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Employment Situation
See above for details
Fedspeak
New York Fed President William Dudley at 8:30am
San Francisco Fed President John Williams at 3:0pm
Fed Vice Chairman Randal Quarles at 5:30pm
Notable events this week:
Monday:
Personal Income and Outlays
Chicago PMI
Pending Home Sales Index
Dallas Fed Mfg Survey
Tuesday:
FOMC Meeting Begins
PMI Manufacturing Index
ISM Mfg Index
Construction Spending
Wednesday:
ADP Employment Report
EIA Petroleum Status Report
FOMC Meeting Ends
Thursday:
International Trade
Jobless Claims
Productivity and Costs
PMI Services Index
Factory Orders
ISM Non-Mfg Index
Friday:
Employment Situation
Fedspeak
*Terms and conditions apply.
Carter Wessman
Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.
Here we go with another week. It’s been a relatively quiet day so far with little economic news impacting the markets.
That trend could continue throughout the week as there’s not many significant reports on the economic calendar.
Overall, this means that rates could stay in a tight range over the next few days. Read on for more details.
Where are mortgage rates going?
Rates are flat to start the week
The week after the monthly jobs reports gets released is historically a quiet one, so we could see rates remain in a fairly tight range over the next few days.
There’s basically no significant economic data out today in the U.S., plus it’s a banking holiday in the U.K., so the markets aren’t moving much to kick the week off.
There are a few speaking engagements from Federal Reserve officials later in the day, but it’s not likely that they’ll cause any major market reactions.
Looking back at the monthly jobs report for April, which was released on Friday, it was a slightly disappointing report with the headline reading and average hourly earnings coming in below expectations.
It wasn’t an abysmal report, but the numbers were still low, keeping in check the hawks calling for a more aggressive rate hike path in 2018.
The monthly jobs report is always one of the most closely watched reports out every month so there’s always the chance for a big market reaction when it gets released.
This time around, however, the release came and went without much fanfare.
Yes, we did see the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) slide lower immediately after the report came out, but by the end of the day it had climbed buck up to where it was earlier in the day.
Rate/Float Recommendation
Locking now is likely the smart move
The long-term trend for mortgage rates remains for them to move higher.
If you’re considering buying a home or refinancing your current mortgage, you will most likely want to take action sooner rather than later in order to try and get the best rate.
Of course, everyone’s situation has unique factors which is why it’s so important to talk to a mortgage expert before making a final decision.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Fedspeak
Richmond Fed President Tom Barkin at 2:00pm
Dallas Fed President Robert Kaplan at 3:30pm
Chicago Fed President Charles Evans at 3:30pm
Notable events this week:
Monday:
Tuesday:
NFIB Small Business Optimism Index
JOLTS
Wednesday:
PPI-FD
10-Yr Note Auction
Fedspeak
Thursday:
Consumer Price Index
Jobless Claims
Bloomberg Consumer Comfort Index
Friday:
Fedspeak
Consumer Sentiment
*Terms and conditions apply.
Carter Wessman
Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.
Opening a 529 plan is a tax-advantaged way to set aside money for college. The money you contribute can grow tax-deferred and qualified withdrawals are tax-free. While there is no federal tax break for making 529 plan contributions, you may be able to claim one at the state level. Breaking down the 529 tax deduction by state can give you an idea of how you might be able to benefit when saving for college. Need help creating a college savings plan? Get connected with a financial advisor near you to learn more.
Understanding 529 Plan Tax Deductions
Tax deductions are amounts that reduce your taxable income for the year. You can claim both federal and state tax deductions. They’re different from tax credits, which reduce your tax liability on a dollar-for-dollar basis.
Claiming tax deductions can help you to pay less in taxes or garner a bigger refund if you typically get money back at the state or federal level. Some deductions are above-the-line, while others require you to itemize on your tax return. Credits, meanwhile, lower your tax bill.
The federal government offers some tax deductions for education, but a deduction for 529 plan contributions isn’t one of them. You can, however, deduct interest paid to student loans. The American Opportunity Tax Credit and the Lifetime Learning Tax Credit can also be claimed to offset higher education expenses.
529 Tax Deduction by State
Every state offers at least one 529 plan, but states are not required to offer a tax deduction or other tax breaks for education. That being said, a number of states do offer deductions if you’re making contributions to a 529 plan. States can also offer credits or other tax breaks as an incentive to save for college.
Nine states do not have income tax which means they don’t offer a 529 plan deduction. Those states are Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. California, Hawaii and Kentucky do not offer any type of 529 tax deduction but do assess income tax.
This table breaks down the 529 tax deduction by state.
529 Tax Deductions by State
Alabama
$5,000 single filers; $10,000 joint filers
Alaska
None
Arizona
$2,000 single or head of household; $4,000 joint filers
Arkansas
$5,000 single filers; $10,000 joint filers
California
None
Colorado
Full contribution
Connecticut
$5,000 single filers; $10,000 joint filers
Delaware
$1,000 single filers; $2,000 joint filers
Florida
None
Georgia
$4,000 single filers; $8,000 joint filers
Hawaii
None
Idaho
$6,000 single filers; $12,000 joint filers
Illinois
$10,000 single filers; $20,000 joint filers
Indiana
20% tax credit on contributions (maximum credit $1,500)
Iowa
$3,785 per beneficiary
Kansas
$3,000 single filers; $6,000 joint filers
Kentucky
None
Louisiana
$2,400 single filers; $4,800 joint filers
Maine
Up to $1,000 per beneficiary
Maryland
$2,500 single filers; $5,000 joint filers
Massachusetts
$1,000 single filers; $2,000 joint filers
Michigan
$5,000 single filers; $10,000 joint filers
Minnesota
$1,500 single filers; $3,000 joint filers
Mississippi
$10,000 single filers; $20,000 joint filers
Missouri
$8,000 single filers; $16,000 joint filers
Montana
$3,000 single filers; $6,000 joint filers
Nebraska
$10,000 single filers; $5,000 married filing separately
Nevada
None
New Hampshire
None
New Jersey
$10,000 per taxpayer
New Mexico
Full contribution
New York
$5,000 single filers; $10,000 joint filers
North Carolina
None
North Dakota
$5,000 single filers; $10,000 joint filers
Ohio
Up to $4,000 per beneficiary
Oklahoma
$10,000 single filers; $20,000 joint filers
Oregon
$150 tax credit single filers; $300 tax credit joint filers
Pennsylvania
$17,000 single filers; $34,000 joint filers
Rhode Island
$500 single filers; $1,000 joint filers
South Carolina
Full contribution
South Dakota
None
Tennessee
None
Texas
None
Utah
4.95% tax credit per beneficiary
Vermont
10% credit on up to $2,500 for single filers; $5,000 joint filers (maximum $250 per taxpayer, per beneficiary; VHEIP is the only eligible plan)
Virginia
Up to $4,000 per account
Washington, D.C.
$4,000 single filers; $8,000 joint filers
Washington
None
West Virginia
Full contribution
Wisconsin
$3,860 per beneficiary; $1,930 for divorced parents or those married filing separately
Wyoming
None
Claiming 529 Plan Tax Benefits
To claim a tax deduction or credit for 529 plan contributions, you must live and file taxes in a state that offers these benefits. You must also be eligible to get a tax break, based on your relationship with the account beneficiary.
In most states, any contributor to a 529 plan can claim a tax break, regardless of whether they’re the account owner or not. However, some states limit tax benefits to account owners only. That means grandparents, aunts and uncles or other contributors would be excluded from deducting contributions or claiming tax credits.
The good news is that there are no time limits on claiming education tax benefits associated with a 529 college savings plan if you’re eligible to do so. Unlike Coverdell Education Savings Accounts (ESAs), which require you to withdraw all assets once the beneficiary turns 30, 529 plan money can stay in the account indefinitely. So, as long as you’re making contributions you could still claim a deduction or tax credit if you’re eligible.
Is Contributing to a 529 College Savings Plan Worth It?
Saving money in a 529 plan can be worth it for a few reasons, starting with the laundry list of tax breaks they offer. Contributions grow on a tax-deferred basis, so you’re not having to pay tax on any earnings while the money is in the account. Any qualified withdrawals are tax-free, as long as you use them for eligible higher education expenses. You can also withdraw up to $10,000 without a tax penalty to pay for qualified expenses for grades K-12.
You can open a 529 plan and contribute money to it on behalf of any eligible beneficiary, including yourself or your spouse. Should your beneficiary decide not to go to college or if they don’t use up all of their savings, you could transfer the money to a different beneficiary. And as outlined in the table above, some states offer tax breaks for college savings in the form of deductions or credits.
Aside from those benefits, a 529 plan can offer a better rate of return on your money compared to keeping money in a high-yield savings account or even a CD. They also allow for more flexibility than savings bonds. And while you could tap into an Individual Retirement Account (IRA) to pay for college, that could shortchange your retirement savings and potentially trigger some tax consequences.
The Bottom Line
Getting a head start on college planning can help you to be better prepared when it’s time for your student to head off to school. Saving money in a 529 plan can benefit you at tax time and your money may have more room to grow than it would sitting in a bank account. Reviewing your 529 tax deduction by state can help you figure out how much of an additional tax advantage you might get from saving.
Financial Planning Tips
If you’re ready to start saving for college but you don’t know how to approach it, getting professional advice can help. A financial advisor can walk you through different college savings options so you can choose the one that best fits your needs and situation. Finding a financial advisor doesn’t need to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
When comparing 529 savings plans, remember that you’re not locked into choosing your state’s plan. You could invest in a different state’s plan if you prefer the range of investment options offered or if another plan allows for higher lifetime contribution limits. Keep in mind, however, that your choice of plan may affect your ability to deduct those contributions on your state income tax return.
Rebecca Lake, CEPF®
Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
