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Ready or Not, The Student Loan Payment Pause is Coming to an End: 7 Must-Do’s to Secure Your Financial Well-being

Wellthi GPT

🌟 Hey there, money-savvy friends! 🌟 It’s time to talk about something important: those pesky federal student loans that have been on hold since the COVID-19 pandemic started. Brace yourselves, because starting September 1, we’ll have to resume making payments on them. 😓

During the payment pause, we enjoyed the sweet 0% interest rate, but now we’re going back to the current fixed rates. Some experts have noticed that some borrowers might not be fully prepared for the repayment phase, especially those banking on loan forgiveness. No worries, we’ll handle this together! 😬

So, let’s start with some simple steps to make this transition smoother than ever, shall we?

1️⃣ Find Your Loan Servicer: During the pause, some loan servicers merged, and your loan might be managed by a new one. Check your emails and login to the Federal Student Aid website to confirm your current servicer’s details.

2️⃣ Budget Like a Pro: A budget is your best buddy when it comes to financial planning. Assess your income sources, fixed expenses like rent and car payments, and variable costs like groceries and entertainment. Then, identify those extra expenses you can trim down a bit. Your future self will thank you! 💁‍♀️

3️⃣ Explore Forgiveness Programs: Sure, we’ve heard about the recent Supreme Court decision striking down the Biden Administration’s plan for loan forgiveness up to $20,000. However, you may still qualify for a new federal student loan relief program that was just announced July 14, known as the IDR waiver, or IDR Account Adjustment. If you’ve been repaying your loan for 20 or more years, you may qualify. Notices went out to about 800,000 recipients but more are on the way so keep an eye on your mailbox!

Although the one-time forgiveness plan is off the table, don’t lose hope if you’re a more recent borrower. If you work in qualifying government or nonprofit organizations, you might still be eligible for loan forgiveness through other programs like Public Service Loan Forgiveness (PSLF). Check it out! 

4️⃣ Explore Income-Driven Repayment: Low income? No problem! Income-driven repayment plans got your back. With payments as low as 10-20% of your discretionary income, you can keep slaying your goals while keeping your budget happy. But hey, keep an eye on the long game, as it might take longer to clear that debt. No stress, though – we’re here to cheer you on! 🙌🌟

5️⃣ No Pay, No Worries: Missed some payments? To ease the transition, the Education Department is introducing a one-year “on-ramp” period starting October 1, 2023 to Sept. 30, 2024. This means missed or late payments won’t lead to negative credit reporting or default. 🎉 So no stressing about a slip-up here and there

6️⃣ Keep an Eye on New Plans: The government has introduced the Saving on a Valuable Education (SAVE) plan, which can provide significant savings for some borrowers.  For peeps making $32,800 or less (or $67,500 for a family of four), monthly payments are slashed to $0! 🎉💸 You heard that right – ZERO! And even if you earn more, you can still SAVE big on your payments. 

7️⃣ Boost Your Income: If you’re worried about making ends meet, consider finding extra income streams. A side gig or part-time job can help you stay afloat while tackling those loan payments.

Remember, Wellthi is your ultimate partner in this financial adventure! We’ve got the resources, tools, and support you need to thrive. Together, we’ll crush those loans, save for the future, and celebrate every milestone.🎉 Your financial success is our joy, and we believe in you, fabulous friend!💕 Let’s unleash the #FinancialWarrior in you!🌟

Stay inspired, stay savvy, and stay tuned for more amazing tips and tricks from Wellthi – your bestie for all things financial! 🤗✨

DIG DEEPER

  1. Federal Student Aid Website: Stay up-to-date with all things related to your federal student loans by visiting the Federal Student Aid website. You can find your loan servicer, access important documents, and get the latest updates on repayment options. 🎓👉 studentaid.gov
  2. Public Service Loan Forgiveness (PSLF) Help Tool: If you’re looking into PSLF, use the PSLF Help Tool to see if your employer qualifies and get a head start on that loan forgiveness journey! 🌟👩‍🏫 Find it at https://studentaid.gov/pslf/
  3. SAVE Repayment Plan Info: Want to know more about the exciting Saving on a Valuable Education (SAVE) Plan? Get all the deets and eligibility info on the Federal Student Aid website. It’s time to save big on those payments! https://studentaid.gov/announcements-events/save-plan
  4. IDR Waiver Account Adjustment: How to Qualify and Get Your Loans Forgiven Faster.https://www.studentloanplanner.com/idr-waiver-how-to-qualify/
medium-shot-friends-taking-selfie

Rise Above Lifestyle Inflation and Achieve Your Financial Goals

Wellthi GPT

Let’s talk about lifestyle inflation, or as we like to call it, “lifestyle creep.” It’s that sneaky phenomenon where your spending starts to rise as your income increases. Before you know it, you’re caught up in a whirlwind of upgraded coffee runs and daily lunches out. But don’t worry, we’ve got your back! Wellthi is here to guide you towards financial success while having a blast with your friends. Let’s dive into this exciting topic and learn how to conquer lifestyle inflation like the financial rockstars we are!

Picture this:  a few years ago, you were making $30,000, packing your lunch, and indulging in a takeout coffee every now and then. Fast forward to today, and you’re rocking a $45,000 salary. But now, you find yourself buying lunch almost every day and sipping on takeout coffee three times a week. Whoa, that’s lifestyle inflation in action! NPR’s Life Kit podcast has some fantastic examples of lifestyle creep that you can relate to. It’s time to take control and unleash your financial potential!

Now, here’s the deal. It’s not a crime to splurge a little here and there, as long as it aligns with your budget. But excessive spending might just mean that lifestyle inflation has snuck into your life. And guess what? It can hinder you from achieving those amazing financial goals you’ve set for yourself. Say you want to build up a savings cushion to avoid relying on credit cards during the holiday season. Lifestyle creep might drain that cushion before you even get a chance to make it cozy.

But fear not, our financial warrior! We’re here to help you determine if you’re in the lifestyle inflation danger zone. Let’s break it down step by step:

  1. Track your finances like a pro: To understand your spending behavior, you’ve got to know where your hard-earned money is going. Take a peek at your bank records, credit card statements, and other financial records. Pro tip: If you’re already a fan of money-tracking or budgeting apps, you can download your spending data in a jiffy!
  2. Debt check-in time: The more debt you’ve got, the tougher it becomes to pay it down, especially if lifestyle inflation has sneaked its way into your life. Take a good look at your bank and credit card statements. If the amount you’re paying toward debt has shot up, it might be a sign that you’re spending more than you earn and relying on credit cards or other forms of debt to make ends meet.
  3. Discretionary spending analysis: Time to organize your spending into categories like housing, clothing, food, and transportation. Now, compare your spending habits month to month. Do you notice any significant differences? Small increases due to property tax hikes are fine, but if your spending on discretionary items like eating out, shopping sprees, and entertainment has skyrocketed, lifestyle inflation may have made itself comfortable in your life.
  4. The nitty-gritty of expenses: Apart from analyzing the amounts you spend on discretionary items, take a closer look at what you’re specifically splurging on. For instance, imagine you recently got a job promotion and a raise. You need a new vehicle, and instead of going for a similar model, you decide to treat yourself to a luxury ride. Sounds familiar? These choices can be telltale signs of lifestyle creep.
  5. Saving goals under the microscope: Time for some introspection! Are you making progress toward your financial goals? Have you managed to squirrel away at least $1,000 in your emergency fund? Or have you treated yourself to a dreamy vacation without relying on a credit card? If your income has increased, but you’re still struggling to save or make headway on your financial goals, lifestyle inflation might be the sneaky culprit.

So, how can you stay one step ahead of lifestyle inflation? Let’s unravel a few strategies:

  • Keep tabs on your spending: When you track your spending diligently, those small changes in your finances become crystal clear. Before adding new expenses or altering your spending habits, ask yourself if they align with your bigger financial picture.
  • Automate for success: Set up automatic deposits to your savings account to effortlessly reach your financial goals. You can also automate loan or debt payments to make sure you’re prioritizing your financial well-being.
  • Embrace the power of budgeting: If you’ve received a promotion or a raise, calculate how much extra dough will land in your pocket. Then, create a new budget that aligns with your increased income. Smart budgeting is key to keeping lifestyle inflation in check.
  • Don’t forget to indulge: A tight budget might tempt you to rebel and overspend. Instead, set aside a little money each month for guilt-free splurges or impulsive buys. This way, you can enjoy life within your means while still achieving your financial goals.

Now, let’s talk about what drives this whole lifestyle inflation phenomenon. Social factors often play a significant role. Ever heard of “keeping up with the Joneses”? It’s all about comparing yourself to others and feeling the need to match their spending habits or possessions. But remember, your happiness doesn’t depend on what others have. Don’t let envy dictate your financial choices. Take a moment to reflect and understand that what you see on social media isn’t always real life. That glamorous vacation might not bring you true joy, and those glossy ads might be more about the sponsor’s payday than your well-being.

So, my financial superstar, go ahead and enjoy the fruits of your labor. You’ve earned it! Just remember to tread carefully and live within your means. With a little self-reflection and some mindful budgeting, you can turn lifestyle inflation into a tool that propels you toward a brighter financial future.

And guess what? We’ve got your back every step of the way. Download Wellthi, and embark on your financial journey with friends by your side. With Wellthi, achieving your goals is as rewarding as it gets!

DIG DEEPER

The 8 Best Budget Apps for 2023– NerdWallet

What Is Lifestyle Inflation?– The Balance

Can Your Lifestyle Inflation Keep Up With Investment Inflation?– Financial Samurai

“Financial Independence: The Road Less Traveled” – Mr. Money Mustache  

health insurance

10 Must-Ask Questions When Choosing Health Insurance

Wellthi GPT

We know that navigating the world of health insurance can be as stressful as trying to find parking on a busy city street. But fear not, because we’ve got your back.To make this process a breeze, we’ve put together a list of ten questions that will guide you in choosing the ideal health insurance plan for you, your family, your well-being, and your wallet. With these questions in your toolkit, you’ll be able to compare health plans like a boss and find the one that checks off all your boxes. Whether you’re a newbie to health insurance or looking to switch things up, these questions are your golden ticket.

1.Will this health insurance plan save me money if I’m healthy?

Picture this: you and your family have a fantastic year of good health. Few doctor visits, minimal prescriptions, and hardly any urgent care trips. If you don’t anticipate frequent healthcare needs, pay close attention to recurring costs that can help you save money. But remember, life is unpredictable, so be prepared for unexpected healthcare expenses too.

Questions to consider:

  • How much is the monthly premium?
  • What are the copays for doctor visits, urgent care, emergency room visits, and prescriptions?
  • If I receive the same care as last year, how much would it cost?
  • Does the plan fit within my budget?

2. Will this health insurance plan be affordable if I’m sick?

Now let’s envision the opposite scenario: you face various health challenges throughout the year. Hospital stays, increased prescription costs, and unforeseen medical emergencies become the norm. Ensure your plan strikes a balance between expenses you can anticipate (monthly premiums, deductibles, and out-of-pocket maximums) and those you can’t predict (copays and coinsurance for necessary care).

Questions to consider:

  • How much do I need to pay before the plan starts covering costs (deductible)?
  • What’s my share of the cost for other care, such as X-rays or hospital stays (coinsurance)?
  • What’s the maximum amount I’d have to pay for care in a year (out-of-pocket maximum)?
  • Can I afford the out-of-pocket maximum if the need arises?

3. Will my doctors be covered by this plan?

Your trusted healthcare providers play a crucial role in your well-being. Check if the health insurance plan you’re considering includes your preferred doctors and clinics within its network. Staying within the network saves you money, while seeking care outside the network may result in higher bills.

Questions to consider:

  • How extensive is the plan’s coverage network?
  • Does the plan cover my current doctor (are they in-network)?
  • How much will I have to pay if I see a doctor who isn’t covered (out-of-network)?
  • Am I willing to switch doctors or locations if my preferred choices aren’t in-network?

4. What is prescription drug coverage like?

Prescription drugs are a common part of healthcare for many individuals. Don’t forget to examine the plan’s formulary, which outlines the covered drugs and their associated costs. This information will help you budget for your current prescriptions and any future medication needs.

Questions to consider:

  • How much will I pay for my regular prescriptions? Are they affordable?
  • Are any prescriptions subject to pre-approval by the health plan?
  • Which pharmacies are in-network, and are their hours and locations convenient?
  • What options are available if my prescriptions aren’t covered?

5. Will it be easy to access care when I’m sick?

When illness strikes, you want quick and accessible care to help you recover. Consider how easily your plan facilitates access to covered care. Equipped with this knowledge, you’ll know exactly where to go and what to do at the first signs of sickness.

Questions to consider:

  • Do I need to choose a primary clinic or doctor as the first point of contact?
  • Are there covered urgent care clinics or nearby emergency rooms?
  • Does the plan offer virtual care options, like Wellthi’s trusted partner, Virtuwell?

6. Will it be easy to access care when I’m well?

Remember, healthcare isn’t just for when you’re sick. Explore the benefits your health insurance plan offers to keep you healthy. By understanding how your plan supports preventive care, you can minimize doctor visits (and save some bucks too!).

Questions to consider:

  • Are there free services to promote overall well-being that are important to me and my family?
  • Will I incur any costs for regular checkups, annual OB-GYN visits, or routine tests?
  • Will I need to pay for immunizations like the flu shot?

7. Does this plan cover alternative therapies?

Interested in alternative therapies like chiropractic care, home births, or acupuncture? Different health plans have varying coverage policies for alternative medicine. If these therapies matter to you, closely examine your plan’s benefits.

Questions to consider:

  • How much do alternative therapies or services cost?
  • Is there any cost-sharing for alternative medicine?
  • Do I plan on frequently utilizing alternative therapies, or am I open to other treatments?

8. Are there additional perks and benefits?

Health insurance plans can offer more than just medical coverage. Look out for extra perks and benefits that can enhance your well-being and save you money. From health coaches to discounts on gym memberships or groceries, you might find some pleasant surprises.

Questions to consider:

  • Does this plan provide unique benefits that others don’t?
  • Will I actually use these additional perks? Which ones align with my priorities?

9. Will this health insurance plan adapt to my changing needs?

Life is unpredictable, and your health needs may evolve. Ensure that your chosen plan can accommodate changes along the way. By understanding how different life events impact your coverage, you can make a confident decision from the start.

Questions to consider:

  • What happens if I move or change jobs?
  • How will a new addition to my family be covered (e.g., having a baby or adopting)?
  • What if I or a family member develops a serious health condition?
  • Are any significant life changes expected in the next year?

10. Can I easily seek support and advice with this plan?

Healthcare can be complex, and questions may arise regarding insurance or care. Find a plan that prioritizes member support and offers easy access to guidance. Whether it’s a 24/7 nurse line or a dedicated support team, knowing you have reliable assistance when needed is invaluable.

Questions to consider:

  • Can I contact a 24/7 nurse line whenever I have health-related queries?
  • How can I reach someone to discuss insurance questions, and when are they available?
  • Are there knowledgeable individuals who can help me select the right plan for me and my family?
  • Will I have the necessary contact information when I need it?

Getting answers to your health insurance questions

Remember, health insurance plans aren’t one-size-fits-all. It’s essential to speak with someone who can help match your unique needs with the perfect plan. At Wellthi, we’re here to guide you every step of the way on your journey towards financial well-being. Together, let’s achieve your goals and secure a healthier future.

DIG DEEPER

How To Choose A Health Insurance Plan For Your Family- Forbes

What to look for in a health insurance plan– March of dimes

Types of Health Insurance– Investopedia

black-businessman-happy-expression

Mastering the Mindset of Saving: Unlocking Financial Freedom.

Wellthi GPT

What would you do with a crisp $100 bill handed to you right now? Go on a mini shopping spree? That’s what most folks would do, according to financial literacy enthusiast Mac Gardner. But why is it that our first instinct isn’t to save it? With a little understanding of the psychology behind saving, you can develop smart financial habits that will make reaching your goals a breeze. Welcome to Wellthi, your trusted companion on the journey to financial success.

Understanding the Science of Saving

Did you know that your saving and spending habits are influenced by unconscious biases? These sneaky assumptions play a significant role in your financial behavior, but fear not! We’re here to shed some light on the matter. Let’s explore a couple of these biases that affect your money mindset.

Mental Accounting: How You Classify Your Funds

Ever found yourself saving up for a car while struggling with credit card debt? That’s mental accounting at play. It’s when we allocate funds based on subjective criteria. While saving for a future car might seem like a solid plan, tackling your high-interest credit card bills could actually boost your savings game.

Loss Aversion: The Fear of Missing Out on Spending

Loss aversion is the scientific term for financial FOMO. The more money you save, the less you have to spend, and that can trigger some serious anxiety.Understanding how loss aversion affects your spending decisions can help you overcome the fear of missing out and stay on track with your saving strategy.

One study highlighting the impact of FOMO found that a significant percentage of millennials spend money they don’t have to maintain their social status or to participate in unique experiences. This behavior can have long-term consequences, as individuals may neglect financial planning for the future in favor of immediate gratification.

The rise of social media and the constant exposure to others’ experiences and possessions have contributed to this phenomenon. People often compare themselves to others and feel pressured to keep up, which can lead to impulsive spending and financial strain.

However, it is crucial to strike a balance between living in the present and planning for the future. While experiences can be valuable and enriching, it is equally important to consider long-term financial goals, savings, and investments. Overspending due to FOMO can lead to financial instability, debt, and limited resources for future needs and aspirations.

Discovering Your Money Mindset

Now that we’ve unraveled the mysteries of behavioral biases, it’s time for some self-reflection. Knowing your money mindset is crucial to clarify your financial goals and identify any barriers holding you back. Let’s embark on a journey of self-discovery and explore how aligning your spending habits with your values can turbocharge your savings.

Unveiling Your Financial Goals and Values

To stay motivated on your savings journey, you need clear goals that resonate with your values. Whether it’s achieving financial freedom, long-term stability, or building wealth for your future, defining your financial goals sets the stage for success. Start by paying off debt, creating an emergency fund, saving for retirement, or reaching a major purchase milestone. Say no to anything that doesn’t align with your goals, like those tempting take-out meals that hinder your debt repayment progress.

Examining Your Money Beliefs and Attitudes

Our beliefs about money influence our financial habits. Do you see money as a status symbol, or do you consider it a reward for hard work? Understanding your beliefs can provide valuable insights into your spending patterns. So let’s reflect, what would you do with that $100 bill? Your answer might reveal a lot about your relationship with money.

Rewiring Your Brain for Saving Success

Good news, friends! Habits can literally rewire your brain through a process called neuroplasticity. By building new habits, you can create new connections and pathways that make saving money an integral part of your identity. Let’s explore two powerful strategies to rewire your brain and supercharge your savings.

Automate Your Savings: Set It and Forget It

Say goodbye to the mental burden of manual saving. Embrace the magic of automation with mobile banking apps that allow you to set up automatic deposits and transfers effortlessly. Watch your savings grow without even thinking about it! Alternatively, leverage third-party financial management apps to keep track of your progress with ease.

Visualize Your Goals: The Power of Seeing is Saving

Out of sight, out of mind? Not anymore! Visual reminders of your financial goals can work wonders in keeping you on track. Financial apps can provide graphs and timelines to track your progress, but don’t be afraid to get creative! Stick a photo of your dream home on the fridge or set it as your phone’s wallpaper to stay focused on your goals. And guess what? Anticipating your future success can even boost your mental well-being. It’s a win-win!

Overcoming Psychological Barriers: Stay Focused and Thrive

Sometimes, we unintentionally sabotage our own progress. But fear not, because we have some strategies to help you overcome those psychological barriers and stay focused on your financial goals.

Tackle Impulse Spending: Shop Smart, Save Smarter

We’ve all been there—purchasing things on a whim without planning. It’s time to break free from impulsive shopping habits! Set clear budgets before entering stores, avoid grocery shopping on an empty stomach, delete those saved credit card numbers from online shopping sites, and seek accountability from your loved ones for major purchases. Remember, marketing gurus make a living by making you feel incomplete. Stay focused on your savings goals and resist the urge to give in to unnecessary purchases.

Harness the Power of Delayed Gratification: Patience Pays Off

Delayed gratification is a superpower that successful people possess. By resisting the urge to make impulsive purchases, you can redirect your money toward savings. Challenge yourself to wait a little longer before giving in to temptation, avoid browsing websites or stores that tempt you, discuss major purchases with your support network, and create a wishlist to make purchases when you have enough savings. Upgrade your phone when you receive your tax refund—a short-term goal with delayed gratification.

Surround Yourself with Positive Influences: Friends that Save Together, Thrive Together

Your environment plays a significant role in shaping your habits. Cultivate better financial habits by seeking support from like-minded individuals. You’re not alone on this path to financial freedom. Connect with Wellthi’s vibrant community of like-minded individuals who understand the struggles and share the victories. We’ll cheer you on, hold you accountable, and celebrate every milestone together. Join us today and unleash your full financial potential!

Limit Exposure to Materialistic Influences: Break Free from the Spell

Don’t let the “if only” spell cast by marketing wizards get to you. Avoid magazines and blogs that promote luxury items, limit your exposure to social media where advertisers lurk, ignore television advertisements, and find satisfaction in healthy hobbies instead. Remember, your life isn’t defined by the latest gadget or brand. Focus on what truly matters to you—your financial well-being and achieving your goals.

So, my friend, are you ready to embrace the psychology of saving and embark on a journey toward financial greatness? Wellthi is here to guide you, support you, and make every step of the way enjoyable. Together, we’ll achieve the life you’ve always dreamed of—one savings goal at a time. Let’s get started!

Dig Deeper

  1. https://www.lemonade.com/blog/science-behind-savings/ – An insightful article that delves deeper into the behavioral biases and psychological factors that influence our saving habits. 
  2. “https://dividendsdiversify.com/create-vision-board-financial-goals/- Learn how to create a vision board to visually represent your financial goals and keep yourself motivated along the way.
  3. https://www.spillsspot.com/finance-blog/2018/12/11/the-lost-art-of-delayed-gratification/- Dive into the concept of delayed gratification and learn strategies to resist impulse buying and make smarter financial decisions.
  4. https://www.smarterandharder.com/financial-automation/ – Explore the benefits of automating your savings and discover the best tools and apps to help you do it.
  5. https://www.axosbank.com/blog/Are-You-Guilty-of-FOMO-Spending#-Delves deeper into FOMO spending
Wellthi retirement savings

S.O.S! Your 401k Is Having a Wardrobe Malfunction – Here’s How To Dress for Retirement Success In a Rocky Market

Wellthi GPT

Honey, your 401k is calling, and it’s in need of a makeover!👠 Just as you would never dream of wearing last season’s fashions with mismatched accessories, you absolutely cannot afford to have your retirement savings out of vogue. There’s $9 trillion adorning the closets of over 100 million Americans in the U.S. 401k retirement plan market, as reported by the US Department of Labor. But, darling, there’s a snag in the fabric.

It wasn’t long ago that retirement savings accounts performed like a chic ensemble at a pre-pandemic rooftop party. Well they’ve lost that sparkle, and at an alarming rate. According to Vanguard, the average balance in 401k accounts has slipped down the runway by about 20% – from $141,542 in 2021 to $112,572.

Did you know? By creating goals and sharing them in public with your friends and family, you’ll increase your chances of success! You can download the Wellthi app here, if you act by July 3, you could win $10,000 for just posting your financial goal in the app!

The median balance isn’t strutting any better. Picture yourself sashaying through New York with a stunning designer bag; now imagine it’s contents vanishing. That’s right, my dears, the median balance has cascaded from $35,345 in 2021 to a humbling $27,376.

But let’s not be fashion victims. This 401k issue is like that little black dress waiting to be styled to perfection. The primary culprit, as per Vanguard, is lukewarm equity and bond markets recently. They’re like that outfit you adored, but now it just doesn’t light up the room.

As your confidant, I urge you not to panic. It’s time to be your own investment stylist. How about diversifying, honey? Like pairing those Nike kicks with a chic blazer. Or, go on and explore the world of IRAs, real estate, or even the bold and edgy cryptocurrencies. Whatever you choose, make sure to do your homework, and better yet consult with a financial advisor.

Now, let’s get together with our besties and venture through this together. The Wellthi app is your virtual brunch squad – always there for you. It’s the sparkling jewelry to your 401k’s little black dress. 🥂

Take a page out of Carrie Bradshaw’s book – when life trips you on the runway, pick yourself up, adjust your tiara, and keep walking with grace and determination. Accessorize your retirement plan, don your financial stilettos, and let’s take on this 401k drama together, head held high. 🎩💖

You can download the Wellthi app here, if you act by July 3, you could win $10,000 for just posting your financial goal in the app!

Go Deeper

  1. Understanding 401k Investments: A guide by Investopedia that explains the basics of 401k and how to make the most out of your retirement savings. Link
  2. Diversifying Your Retirement Savings: A piece by Fidelity on why diversification is essential for managing risk and enhancing returns on retirement savings. Link
  3. Cryptocurrency for Beginners: A beginner’s guide to cryptocurrency by Investopedia that covers the essentials of crypto as an investment option. Link
  4. IRA vs. 401k: A side-by-side comparison by The Balance to understand the differences between IRA and 401k, to make an informed decision. Link
Wellthi-COLA

What is the COLA and Why You Should Care

Wellthi GPT

Hey there Wellthi fam, you may still be a long way from retirement, but it’s important for you to stay informed about your Social Security benefits. It shouldn’t be your only source of retirement income, but it can round out your savings so it’s a good idea to stay on top of things.

You may have heard about something called the Cost of Living Adjustment (COLA) recently, because this year saw the biggest increase in 40 years, 8.7%. A new adjustment is coming in 2024, and while we don’t have the exact numbers just yet, we can make some educated projections based on recent inflation trends.

But first, let’s set the record straight. The COLA is not determined by the President or Congress. Since 1975, it has been automatically linked to inflation, specifically the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index measures the increase in prices experienced by workers and serves as the basis for calculating the COLA.

Ways to save: By creating goals and sharing them in public with your friends and family, you’ll increase your chances of success! You can download the Wellthi app here, and act by July 3, you could win $10,000 for just posting your financial goal in the app!

Now, let’s dive into the projections. We’ll explore three scenarios: low, mid, and high inflation. In the low inflation scenario, where prices remain stagnant through September, we anticipate a 2.2% COLA for 2024. However, as we approach September and observe positive inflation, this number is likely to increase.

The mid-line scenario is the most probable one. If inflation continues at a moderate pace, retirees can expect a COLA of around 3% in 2024. This means a little extra in your pocket to cover rising expenses.

In the high inflation scenario, with a 0.4% monthly increase in the CPI-W through September, we could see a 3.5% COLA for 2024. While this scenario is not out of the question, it would require sustained high inflation levels.

The differences between these scenarios may seem small, but they can have an impact on your monthly benefits. For example, a 2.2% COLA versus a 3.5% COLA could mean a difference of about $25 per month on a $2,000 benefit or around $40 per month on a $3,000 benefit.

It’s important to note that the COLA also takes into account the increase in Medicare premiums. Medicare announces its premiums around the same time as the Social Security COLA. While a portion of the COLA may go toward higher healthcare costs, you’ll still receive the full benefit of the COLA.

We understand that you may be rooting for a higher COLA, but here’s the twist: a lower COLA can actually be better for retirees. Lower inflation means your savings and investments outside of Social Security will hold their value longer. So, in a way, you want a lower COLA to coincide with lower expenses.

Some people speculate that the government under-reports inflation. Even if that were the case, you’d still prefer lower inflation and a lower COLA. It’s all about preserving the purchasing power of your savings and investments.

At Wellthi, we’re here to support you on your retirement journey. Our social savings app allows you to set and achieve financial goals with your friends, making the process even more enjoyable. So, as we await the official announcement of the 2024 Social Security COLA, remember to stay informed, plan wisely, and make the most of your retirement years.

We’ll keep you updated on any developments, so stay tuned for more financial insights and inspiration. Together, let’s embrace financial wellness and create a future where your dreams can thrive. Your financial well-being matters, and we’re here to help you every step of the way.

You can download the Wellthi app here, and act by July 3, you could win $10,000 for just posting your financial goal in the app!

Go Deeper

  1. Social Security Administration COLA: A direct link to the Social Security Administration’s page on COLA where readers can learn more about it.
  2. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): This link gives an in-depth explanation of the CPI-W and its implications.
  3. Medicare Premiums: This will help readers understand how Medicare premiums could potentially affect their COLA.
  4. Inflation Calculator: Useful tool for understanding how inflation could affect purchasing power.

#COLA #SocialSecurity #RetirementPlanning #Inflation #Medicare #FinancialWellness #WellthiCommunity #PersonalFinance #SavingsGoals

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Cracking the Price Drop: Egg Prices Experience Sharpest Decline in Over 70 Years

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Calling all egg lovers and brunch enthusiasts! We have some egg-citing news for you. According to the latest consumer price index report from the U.S. Bureau of Labor Statistics, egg prices have experienced the sharpest decline in over seven decades. This means more affordable eggs for your morning omelets and baking adventures!

In a welcome shift for consumers, egg prices have been on a downward trajectory, dropping a remarkable 13.8% between April and May. This marks the largest decrease in the egg price index since January 1951. On an annual basis, egg prices fell by 0.4%.

Did you know? By creating goals and sharing them in public with your friends and family, you’ll increase your chances of success! You can download the Wellthi app here, and act by July 3, you could win $10,000 for just posting your financial goal in the app!

This significant price drop comes as a relief to many who have witnessed egg prices soar in recent months due to the impact of the largest bird flu outbreak in U.S. history. Just a few months ago, in January 2023, egg prices reached a staggering $4.82 per dozen. However, since then, prices have steadily declined month after month. In May, the average price for a dozen eggs was $2.67, the lowest it has been since April 2022 when it reached $2.52.

The good news doesn’t stop there. Wholesale egg prices are projected to continue their decline, with an expected drop of 26.8% in 2023, according to Seth Meyer, the U.S. Department of Agriculture’s chief economist. So, you can look forward to even more affordable eggs in the months to come.

But it’s not just eggs that are becoming more budget-friendly. The latest CPI report reveals that overall inflation is cooling down. The consumer price index for all items, which serves as a proxy for inflation, increased by 4% over the past 12 months. While still significant, this marks the lowest year-over-year increase in two years, signifying a positive trend.

The Federal Reserve has been closely monitoring inflation and its impact on the economy. As they prepare for their upcoming announcement, scheduled for Wednesday, regarding the federal funds rate, they will consider whether to maintain the current rate or increase it further. Their goal is to strike a balance and control inflation effectively.

So, whether you enjoy eggs for their versatility in the kitchen or simply savor them during your Sunday brunch outings, this decline in egg prices is certainly something to celebrate. It’s a win for your taste buds and your wallet!

At Wellthi, we understand the importance of making smart financial choices while still enjoying the things you love. That’s why we’re here to support you on your journey toward financial wellness. With our unique social savings app, you can reach your goals and make every dollar count, all while connecting with your friends. So, go ahead and indulge in some delicious eggs without breaking the bank. It’s time to savor the savings and embrace a life of financial well-being.

You can download the Wellthi app here, and act by July 3, you could win $10,000 for just posting your financial goal in the app!

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Stay Ahead of the Game: Don’t Miss the June 15 Deadline for Quarterly Estimated Tax Payments

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Hey there, hardworking individuals! If you’re a freelancer, entrepreneur, or have income without withholdings, listen up because an important deadline is approaching. The IRS has set June 15 as the due date for your 2023 second-quarter estimated tax payments. Whether you earn money through self-employment, investments, gig economy work, or your employer doesn’t withhold enough from each paycheck, this deadline applies to you too. It’s all about staying on top of your tax obligations and avoiding any surprises come tax time.

Making quarterly estimated tax payments is crucial for managing your finances throughout the year and avoiding penalties. We know taxes can be overwhelming, so we’re here to guide you through the process and help you meet the “safe harbor” rule to steer clear of underpayment penalties.

You can download the Wellthi app here. Act by July 3, you could win $10,000 for just posting your financial goal in the app!

To stay current and avoid any penalties, it’s important to calculate your tax payments accurately and make them on time. Remember, the U.S. tax system operates on a “pay-as-you-go” basis, meaning you’re expected to pay taxes throughout the year as you earn income. Failing to do so may result in penalties and added interest.

To meet the “safe harbor” requirements, you have two options. You can either pay at least 90% of your current year’s tax liability or 100% of the previous year’s taxes, whichever is smaller. This rule provides a safeguard against underpayment penalties and ensures you’re meeting your tax obligations.

However, high-income taxpayers have a slightly different rule to follow. If your adjusted gross income for 2022 was $150,000 or more, you’ll need to pay 110% of last year’s taxes to meet the safe harbor requirement for 2023. Adjusted gross income can be found on line 11 of your 2022 tax return.

Now, let’s talk about how to make your quarterly estimated tax payments. The IRS recommends electronic payments as the fastest, easiest, and most secure option. You can make payments through your online account, using services like Direct Pay or the Electronic Federal Tax Payment System. Keep in mind that debit and credit card payments may incur a fee, so it’s best to explore the options available to you.

We understand that taxes can be daunting, but it’s important to keep accurate records, monitor your tax situation, and seek professional guidance if needed. At Wellthi, we’re all about empowering you to take control of your finances, and that includes navigating the world of taxes with confidence.

Don’t let the June 15 deadline pass you by. Take a proactive approach, stay on top of your tax obligations, and enjoy the peace of mind that comes with being financially responsible. 

Remember, you’re not alone on this journey. Wellthi is here to support you every step of the way, ensuring your financial success and well-being.

If you want more information on how to make your quarterly estimated tax payments or any other financial matters, check out the IRS website for detailed guidance. Stay tuned for more helpful tips and insights from Wellthi as we guide you toward your financial goals. Together, let’s embrace financial wellness and create a future where you thrive.

You can download the Wellthi app here. Act by July 3, you could win $10,000 for just posting your financial goal in the app!

Useful Links

#TaxDeadline #QuarterlyTaxes #FinancialWellness #WellthiTips #StayAheadOfTheGame #TaxObligations #SelfEmployedTaxes #GigEconomyTaxes #SafeHarborRule #IRSDeadlines