government

What Is Modified Adjusted Gross Income? (MAGI)

One lesser-known measure of income is your modified adjusted gross income. It impacts your ability to qualify for certain tax incentives or things like health care subsidies. Fortunately, your MAGI isn’t all that hard to calculate once you know what it is and why you’re trying to figure it out. 

The post What Is Modified Adjusted Gross Income? (MAGI) appeared first on Money Crashers.

Ways to Help Protect Your Retirement Against Inflation with a Plan Built to Last

If you’re getting tired of paying more for food, gas, clothes and rent — and just about everything else these days — you aren’t alone. Inflation has been upending household budgets for months now, and its momentum doesn’t seem to be slowing.

  • SEE MORE The Inflation Hedge You’ve Never Heard Of

Retirees on fixed incomes will most likely feel the pinch on their pocketbooks for at least the next few months. If you haven’t already, now is the time to review your budget, your income plan and your portfolio with an eye toward protecting your purchasing power.

As we move through the first months of 2022, here are some specific planning points to keep in mind:

Do You Have a Backup Plan for Your Income Plan?

This year’s historic 5.9% Social Security cost-of-living adjustment (COLA) will help retirees with rising prices — but probably not as much as many hoped. That’s because Medicare’s Part B monthly premiums also saw a bigger hike this year. Standard monthly premiums for Part B now cost $170.10 — up 14.5% from $148.50 in 2021.

Most Social Security recipients whose Part B premiums are typically deducted from their Social Security benefits still will see a net increase in their monthly checks. But it likely won’t be enough to completely offset increasing costs if inflation sticks around for a while. And some private pensions don’t offer automatic COLAs. You may find it’s necessary to modify your budget or to look to another income source (such as a temporary job, home equity loan, etc.) to make up the difference.

Is Your Investment Plan Designed to Keep Up with Rising Costs?

Let’s face it, inflation isn’t a new or unexpected risk for retirees. Even relatively low rates of inflation can have a harmful effect on your purchasing power over time.

It’s vital, therefore, to develop an investment plan that can help you keep pace, whether costs are soaring, as they have been recently, or quietly creeping up over time.

Inflation-hedging strategies should be a well-thought-out, long-term component of your retirement portfolio, and your financial adviser can help you pick the best products based on your needs.

  • SEE MORE Even the Experts Can’t Figure Out How to Plan for Retirement Income

It might mean looking at the pros and cons of investing in commodities or real estate, both of which tend to rise in value during periods of inflation. Or it could mean purchasing U.S. Treasury Inflation-Protected Securities (or TIPS), which offer the safety of government-backed bonds but with interest payments that are designed to rise with inflation.

Your adviser will likely recommend leaving a portion of your portfolio invested in stocks to keep your money growing for a long retirement. Stocks are unpredictable, of course, but historically the market has provided patient investors with returns that beat inflation.

Are You Reacting to Media Hype, or Your Reality?

One of the most important things to keep in mind moving forward is that this is not a time to panic.

Economists aren’t expecting the double-digit inflation rates the country experienced in the 1970s and 1980s.

It’s also important to note that some of the categories hit hardest by current inflationary pressures aren’t a factor for many seniors. If, for example, you own your home (as most Americans over 65 do), you don’t have to contend with today’s rising rental costs. And if you’re in the later years of your retirement, it’s likely your day-to-day living expenses already have or could be reduced. (You’re probably driving less, traveling less, can manage with a smaller wardrobe, and may find it easier to cut your grocery bills than a younger family might.)

Don’t let hyped-up headlines push you into making knee-jerk moves that aren’t necessary or could even hurt your long-range plans.

Yes, if you sit back and do nothing, inflation can eat away at your savings and impact your retirement lifestyle. But by reducing your spending when possible, finding a sensible solution for filling any potential income gap, and building inflation-hedging strategies into your investment plan, you should be able to soften the blow.

Kim Franke-Folstad contributed to this article.

Investing involves risk, including the potential loss of principal. Ensign Wealth Management is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Ensign Wealth Management are not affiliated companies.
Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Our firm is not affiliated with or endorsed by the U.S. government or any governmental agency. 1208776 – 02/22
  • SEE MORE Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?

What Is a Dividend?

A dividend is when a company periodically gives its shareholders a payment in cash, additional shares of stock, or property. The size of that dividend payment depends on the company’s dividend yield and how many shares you own. Not all companies pay dividends, but many investors look to buy stock in companies that pay them […]

The post What Is a Dividend? appeared first on SoFi.

ESG Gives Russia the Cold Shoulder, Too

The environmental, social and governance (ESG) rating firm MSCI downgraded Russia’s ESG Government rating this week, from B to the lowest rating possible, CCC.

Many ESG fund managers rely on MSCI ratings for portfolio construction and for ETF indexes. Thus, many Russian companies could end up being cycled out of funds that rely on maintaining a minimum ESG ratings bar for inclusion.

  • SEE MORE 5 Great Green Stocks Making a Direct Impact

The downgrade acts as yet another hit to Russian investments, many of which have been flattened since the country’s invasion of Ukraine. It’s not the first one, either; MSCI ESG Research originally downgraded Russia at the end of February.

“Since the downgrade to B on Feb. 28, we have observed further heightening of Russia’s ‘Economic Environment’ and ‘Financial Governance’ risks based on the widening domestic impact of international sanctions and financial isolation on Russia’s economy,” the MSCI notice said.

Many firms have halted new investments in Russia. JPMorgan Chase, BlackRock and State Street have all announced that they are exiting Russia as able, and JPMorgan also removed Russian debt from its tracking indexes.   

You can thank an increasingly untenable financial situation for both the country and its investments alike. Debt rating agencies S&P, Fitch and Moody’s lowered Russia’s credit rating to at or near junk status as of March 3, a full five days before MSCI made its latest downgrade.

ESG was at least part of the conversation. These debt rating agencies incorporate environmental, social and governance considerations when they are believed to be “material,” or important to a company’s financial performance.

Fitch, for example, cited its incorporation of country-level World Bank Governance Indicators for political risk and rights in its credit assessment. Moody’s considers a country’s inability to repay debt an ESG criterion, also pointing to Russia’s poor governance and corruption.

ESG Not Exactly Hot on Russia in the First Place

A Bloomberg analysis found that only about 300 of 4,800 ESG funds held Russian companies. Bloomberg noted that several ESG funds invested in Russia in search of green or responsible companies to meet intense demand from investors. These ESG investors might have waived human-rights concerns to further goals like renewable energy.

  • SEE MORE Grow With These Green ETFs and Mutual Funds

Other ESG investors, Bloomberg noted, steered clear of Russia.

Morningstar’s Jon Hale found that ESG funds held fewer Russian companies than conventional funds.

“Sustainable emerging-markets equity funds have, on average, just 1.8% exposure to Russian equities, nearly two-thirds less than the overall category average.” Hale notes that in most cases, Russian companies are ESG laggards and don’t meet fund criteria.

The question going forward is whether future ESG criteria will take a longer, harder look at investments in autocracies.

  • SEE MORE Kiplinger ESG 20: Our Favorite Picks for ESG Investors

13 Tax Breaks for Homeowners and Home Buyers

Owning a home is part of the American Dream. Whether you fancy a log cabin in the middle of nowhere, a suburban Cape Cod with a white picket fence, or a downtown condo in the sky, there’s just something special about trading in a lease for a deed. But that transition can be difficult – and expensive. It’s tough saving up enough cash for a down payment and then keeping up with the mortgage payments — to say nothing of the maintenance costs, which are now all on you!

Fortunately, Uncle Sam has a few tax tricks up his sleeve to help you buy a home, save on home-related costs and sell your home tax-free. Some of them are complicated, limited or come with hoops you have to jump through, but they can be well worth the trouble if you qualify. And if your budget is already stretched thin, you need all the help you can get. So, without further ado, here are 13 tax breaks that can help you buy a home and prosper as a homeowner.

  • SEE MORE Tax Changes and Key Amounts for the 2022 Tax Year

Guide to Low-Income Student Loans

As a low-income student, figuring out how to attend college can seem like a grueling process. It’s not even unheard of for college students to face insecurity with their housing situation. A study published in 2021 found that of students surveyed across 22 schools, 44.1% were classified as food insecure, while 52.3% were experiencing housing […]

The post Guide to Low-Income Student Loans appeared first on SoFi.

What Are Student Loans for Military Dependents?

Military members, veterans, and their families have some special options when it comes to funding higher education, and given the cost of attending college, they’re well worth checking into. In this article, we’ll walk you through some of the best student loans for military dependents: children, spouses, and sometimes other relatives of an active duty […]

The post What Are Student Loans for Military Dependents? appeared first on SoFi.

How to Sell Gold Jewelry as Price Nears Historic High

Global events are driving up the price of gold as people look for stable investments. We tell you how to make money off your gold jewelry.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.