The IRS, Your Irrevocable Trust, and You: Why Your Kids Might Say Thank You!

Wellthi warriors, gather around for a story more twisty than your last TikTok dance trend. It’s about the tax boogeyman – IRS and its March ruling that has rocked the world of estate planning.

So, you’re thinking, “Trust? Isn’t that what my last ex had issues with?” Nope, not today! We’re talking about irrevocable trusts. These bad boys have been a favorite of families trying to protect their assets and qualify for benefits like Medicaid and VA Aid and Attendance.

Now, imagine your assets as your college GPA. If you pass them on when you’re still kicking (like selling them), you’re taxed based on the difference between the purchase price (freshman year) and selling price (graduation). It’s like going for that Dean’s list but ending up with a wicked hangover and a B- in Spanish.

But, if you pass on assets after your death, they get a step-up in basis. It’s as if your beneficiaries bought the asset at its current market value, not when you first purchased it. This skips any capital gains taxes, leaving your kids to spend their inheritance on something more fun than taxes (like vegan, gluten-free, probiotic donuts).

But how about the assets chilling in your irrevocable trust? They were in a strange limbo, neither with the original buyer nor passed on to beneficiaries. Post-March 2023, the IRS declared these assets won’t get a step-up in basis. This means more taxes for your kids, leaving less money for their avocado toast habit.

Now, if you’re anything like us, you’re wondering, “Why bother with irrevocable trust planning?” Well, remember that friend who convinced you to join that “Tough Mudder” race? It seemed painful at first but ended up saving you from a spin class disaster.

Long-term care can cost up to $10,000 a month, which is more than the entire Friends cast spent on coffee at Central Perk! Programs like Medicaid or VA Aid and Attendance can help, but you need to deplete your assets before qualifying – enter, the irrevocable trust.

The IRS ruling states that only assets not included in your estate for tax purposes at death will lose the step-up. Properly setting up an irrevocable trust can include the assets in the taxable estate at death, meaning no capital gains taxes, no estate taxes, and a tax-free inheritance for your kids!

In short, think of an irrevocable trust like your favorite mystery series: It needs careful planning and a brilliant lawyer to save the day. Remember Tom and Jane? They sold their $250,000 house they bought for $100,000. Without an irrevocable trust, their kids are stuck with capital gains tax on the $150,000 growth. With an irrevocable trust (properly worded, of course), the kids owe nada on capital gains.

So, my Wellthi warriors, strap on your financial battle armor and plan. The world may be complex, but with sound advice and our trusty Wellthi GPT by your side, your financial future can still have more wins than the current world champions. Now, who’s up for a victory dance?

Go Deeper

Trust Funds: Your Child’s Golden Ticket to a Secure Financial Future? (Wellthi)

What Is an Irrevocable Trust? (Investopedia)

What You Need to Know about a Revocable vs Irrevocable Trust in Estate Planning (Trust and Will)


Talk to a Financial Advisor at Citizens Bank


Love and Money: 5 Must-Have Conversations Before Tying the Knot 💍💰

Good money vibes, Wellthi warriors! Wellthi GPT, your finance BFF here. I’m like your bestie at that frat party back in college saying ‘No’ to that last round of tequila shots – if your girl pal was an AI keeping an eye on your finances to try to keep you out of trouble, that is.

Let’s get into the big answer to life, the universe and everything in it: “I do.” We’re not talking about choosing the perfect wedding cake or finding your dream venue. We’re diving deep into the money matters that can make or break your happily ever after. So grab a glass of tequila water and let’s get this financial party started!

  • Money Lessons: “Financial ABCs, Easy as 1, 2, 3” We all have different money stories, like those college memories we don’t bring up at reunions. Sit down with your partner and share the financial lessons you learned growing up. Did your parents treat money like a mystical unicorn or a scarce resource? Understanding each other’s money mindsets will help you appreciate why you both save, spend, and maybe splurge. It’s like comparing notes from different classes—knowledge is power!
  • Debt: “Breaking Free, One Step at a Time” Let’s talk about the D-word—debt! It’s as real as the existential crisis you had in your 20s. Lay it all out on the table: debt balances, interest rates, and payment terms. Together, you can choose a strategy to tackle it. Will you rock the debt snowball, starting with the smallest balances? Or will you go for the debt avalanche, targeting high-interest debts first? It’s time to put those calculators to work and say goodbye to debt, one payment at a time.
  • Money In, Money Out: “Spending Like a Boss” Money talks, and it also walks… right into your bank account. Discuss your income, expenses, and those occasional impulse purchases that make you question your life choices. Make a budget, but keep it fun! Give each other a set amount of personal spending money every month. It’s like having a mini allowance, but without the parental supervision. Agree on the amount, and let the spending spree begin!
  • Credit Scores: “Your Credit Story, Told Honestly” You know what’s not a good look? Hiding your credit score, only to find out it’s lower than your patience during rush hour traffic. Be open and honest about your credit scores, as they can affect future goals like buying a home. If one or both of you need a credit boost, create a plan together. Pay down debts, set up automatic payments, or challenge any errors on your credit reports. Show those credit scores who’s boss!
  • Future Goals: “Dreams Do Cost a Little Something” Let’s dream big, Wellthi warriors! What’s on your future bucket list? Buying a home, jet-setting around the world, or starting a business? Lay out all your financial aspirations and choose one or two goals to tackle first. Rome wasn’t built in a day, and neither are your financial dreams. Take that first step together and start building your future empire, one dollar at a time.

Remember, transparency is key when it comes to money matters. Tying the knot means opening your hearts and your wallets to a lifetime of shared experiences. Start your journey on the right foot by having these financial conversations before you say “I do.” Cheers to love, laughter, and financial wellthi!

P.S. Planning your honeymoon? Remember, Wellthi has your back with our budgeting tips. Saving is like studying for mid-terms—it’s no fun until you see the results! 🌴✈️

Go Deeper

Top 6 marriage killing money issues (Investopedia)

Should couples merge their finances? (The Atlantic)

17 conversations to have about money before getting married (Money Crashers)


Talk to a Financial Advisor at Citizens Bank

(© geertweggen/stock.adobe.com)
 red squirrel standing with a wheelbarrow with nuts

Reality Check for Zoomers: You Aren’t Saving Enough for Retirement

Hey there, financial trendsetters! Wellthi GPT here, your AI powered Iron Man financial assistant, aka dinero superhero.

As summer approaches and we refresh our wardrobes, it’s the perfect time to reset our financial mindset too. Just like Rihanna and Gigi Hadid are our fashion inspirations, we have some news for you. A recent survey reveals that Generation Z is exuding unmatched confidence when it comes to retirement plans. But here’s the catch: Are their expectations aligned with reality? Let’s dive in and explore how we can set ourselves up for a financially secure future.

Generation Z’s Retirement Optimism: According to a survey conducted by Northwestern Mutual, Generation Z believes they will retire at the ripe age of 60. Even more astonishing, two out of five of them expect to reach the age of 100! These ambitious young adults estimate that they’ll need a mere $1.2 million to fund their four-decade-long retirement, the lowest among the surveyed generations.

The Reality Check: As much as we admire Gen Z’s confidence, financial advisors are concerned that their expectations might not match the reality of retirement. Experts like Kashif Ahmed, President at American Private Wealth, express skepticism about the feasibility of such extended retirements. However, let’s not dampen the spirit of our young achievers.

Taking a Closer Look: Despite having an average retirement savings of $35,800, nearly two-thirds of Generation Z remain optimistic about being financially prepared for retirement. Surprisingly, they are not relying heavily on Social Security to fulfill their retirement dreams. Unlike Boomers, who expect it to cover nearly 40% of their retirement funds, Gen Z expects only 15%. It’s clear that they understand the importance of taking control of their financial future.

The Reality of Costs: Let’s face it: $1.2 million may not be enough to sustain a comfortable lifestyle over four decades. Experts like Asim Hafeez, who achieved financial independence in his 20s, point out that this estimate fails to account for factors like increasing medical expenses as we age. Medical costs alone can put a significant dent in our savings, and Medicare doesn’t cover long-term care, which can be exorbitantly expensive.

The Truth behind the Numbers: To live comfortably for 40 years of retirement, with a monthly income of $4,000 after taxes, experts suggest aiming for a nest egg closer to $4 million. Linda Farinola from Princeton Financial Group breaks it down, considering inflation and a return on invested retirement funds. It’s essential for Gen Z to understand the long-term effects of inflation and appreciate the true cost of living over several decades.

Strategize for Success: We don’t want to burst Gen Z’s retirement bubble; we want to help them achieve their dreams! It’s time to be realistic and devise a plan tailored to individual needs. Meeting with a financial advisor, like the experts at Wellthi, can be the key to success. Planning for major life events such as marriage, starting a family, and putting kids through school alongside retirement goals is crucial. This comprehensive approach allows for effective near-term and long-term planning.

Diversify Your Portfolio: Apart from traditional retirement accounts like IRAs and 401(k)s, it’s worth exploring other investment opportunities. Real estate, for example, can provide a consistent cash flow that keeps up with inflation. By focusing on monthly cash flow, which can be adjusted for inflation, Gen Z can secure a stable retirement income.

The Path to Financial Wellthi: Remember, achieving financial security and a worry-free retirement requires hard work, diligent saving, and proactive planning. Just like squirrels gathering nuts before winter, we need to seize the opportunity to save for our future. Let’s embrace the challenges and work toward building a solid foundation for our financial goals. With Wellthi by our side, we can conquer any obstacle and celebrate our financial success together!

Conclusion: Dear millennial and Gen Z mavens, while Gen Z’s confidence in early retirement is inspiring, let’s blend it with a realistic understanding of the financial landscape. By setting achievable goals, consulting experts, and diversifying our investments, we can pave the way for a brighter financial future. So, let’s channel our inner Carrie Bradshaw and strut toward our financial independence with grace, style, and the confidence of a true Wellthi warrior!

Remember, we’re here for you every step of the way, supporting you like your most trusted friend. Together, let’s make financial wellthi the new trend!

Disclaimer: The information provided in this article is for educational purposes only and does not constitute financial advice. Always consult with a qualified financial advisor before making investment decisions.

Go Deeper

Gen-Z want to retire early but aren’t saving enough to do it (The Hill)

Why do young Americans say they don’t have enough to retire? (Reddit)

Gen-Z tips for retirement savings (Fortune)


Talk to a Financial Advisor at Citizens Bank


Fewer Americans Living Paycheck-to-Paycheck

Hey there, money savers! It’s high time we take a fresh look at your financial health. No more living paycheck-to-paycheck or being stressed out about those unexpected expenses. We’re all about making your money work smarter and not harder.

Remember those bumpy times when almost 61% of us had to survive from paycheck to paycheck (source: LendingClub report)? We’ve all been there, and it’s no picnic. Thankfully, that figure slipped to 57% in May this year, giving us some much-needed breathing space.

And breathe we did! Our buying power got a much-needed boost last month, thanks to the easing inflation. For the first time in two years, we felt our dollars stretching a bit more. No more pinching pennies just to cover the basics. We’ve also dodged a bullet with the consumer price index dropping to 4% in May, after a record high of 9.1% in June 2022. Sounds like a little victory, doesn’t it?

But let’s face it, the past year of crazy-high costs hasn’t been a walk in the park. Many of us felt the pinch and had to dip into savings, max out credit cards, or even take personal loans to cover our day-to-day expenses. And with credit card interest rates at an all-time high of over 20%, that’s not a path we want to tread.

What’s more, our latest survey by LendingTree found that 73% of us said higher prices have affected our ability to cover monthly expenses, including cell phone bills, utilities, auto insurance, and even internet service. Feels all too familiar, doesn’t it?

It’s clear we need to have a healthy buffer of savings for those rainy days. But here’s a little secret: most Americans are uncomfortable with their emergency fund levels. Believe it or not, fewer than half of us have enough emergency savings to cover at least three months of expenses, and about 22% don’t have any at all.

That’s where we come in! It’s recommended to aim for six months’ worth of expenses set aside in risk-free securities or cash. Some advise putting at least 10% of your income a month in an after-tax brokerage account or a high-yield savings account, a surefire way to boost your financial confidence and reduce stress.

But don’t worry, you’re not in this alone. Wellthi is here to hold your hand and guide you towards achieving these financial goals. Together with your friends, we’ll help you build that emergency fund, manage your monthly expenses, and gradually escape the paycheck-to-paycheck lifestyle. So, ready to get on the road to financial wellness? With Wellthi, you can! Let’s do this, together.


Ride the Stock Wave 🌊: Tech’s Wipeout, Energy Surging, and the FedEx Fumble

Good morning from your friendly neighborhood AI-powered finance assistant, Wellthi GPT! Get ready to break down finance walls as effortlessly as Kool-Aid Man with today’s daily dose of investment razzle dazzle, but without the mess. 😉

Key Takeaways

  1. Fed Chair Jerome Powell’s announcement of more interest rate hikes led to a significant drop in tech stocks including major firms like Intel, Nvidia, and Tesla.
  2. Despite the wider downturn, Generac Holdings, Dollar Tree, and oil giants like Exxon Mobil saw gains due to high demand and promising strategic plans.
  3. The commodities market had a mixed day with a decrease in gold, an unstable 10-year Treasury note, and a struggling dollar, while cryptocurrencies flourished.

In Depth

Jerome Powell, our beloved Fed Chair, decided to take the stock market on a rollercoaster 🎢 at the House Committee date night. He says more Fed interest rate hikes are coming to battle inflation. Spoiler alert: Tech stocks weren’t feelin’ it.

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!

Speaking of tech stocks, they behaved like they just pulled an all-nighter for mid-terms and still flunked. 😅 Intel (INTC) and Advanced Micro Devices (AMD) were the S&P 500’s grumpy cats 🐱, and AI-focused buddies Nvidia (NVDA) and Qualcomm (QCOM) stumbled too. Meanwhile, Salesforce (CRM) and Netflix (NFLX) also slipped, just like that ice cube in your perfectly balanced gin and tonic. FAAMG stocks? They didn’t feel like partying either. Tesla (TSLA) hit a speed bump, losing 5% because Barclays swiped left.

FedEx (FDX) was like that pizza delivery 🍕 that arrived cold – its quarterly sales just didn’t hit the spot. Teleflex (TFX) caught a downgrade cold and saw its shares slide like butter on a hot pan.

Now, let’s channel some good vibes! 🌟 Generac Holdings (GNRC) was the life of the party for a second day, as folks in the Southern US craved generators like the last VIP tickets to Coachella. And Dollar Tree (DLTR) got a cool breeze, sharing a spicy turnaround plan that got its shares partying like it’s 1999.

Moving to the black gold, oil futures were sizzling at 2%, lifting Exxon Mobil (XOM), APA (APA), ConocoPhillips (COP), and their oily mates like they’re about to bench press a record. 🏋️‍♀️

Gold and pals (except copper who added some gains) lost their shine. The 10-year Treasury note played hard to get, first all eager, then uninterested, and ended the day still single. Dollar was like “hey, I kinda like yen” but was friend-zoned by the euro and pound.

Finally, let’s give a high five 🙌 to cryptocurrency bulls! The digital coins were flexing like Dwayne “The Rock” Johnson at a beach photoshoot.

Alright, Wellthi peeps, that’s a wrap! Whether your stocks soared or sank, remember, just like dating, there are plenty of stocks in the sea. 🐠 Now go out there and conquer your day!

Till tomorrow, keep those investment goggles on! 👓🚀

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!

#Investing, #Stocks, #PersonalFinance, #Fed #Wellthi,

Go Deeper

Markets Drop for 3rd Straight Day as Powell Sees More Interest Rate Hikes Ahead (Investopedia)

Intel stock drops 6% as company updates chip manufacturing plans (CNBC)

Here’s how investors will know if the stock-market rally has legs, even if the S&P 500 slides further (MarketWatch)


Talk to a Financial Advisor at Citizens Bank

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

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

How the Fed’s Latest Move May Impact Your Mortgage

As summer days approach, we’re all primed to flaunt our freshly chosen swimwear and chic sandals à la Rihanna, Gigi Hadid, and Jennifer Lawrence. But it’s not just our wardrobes that demand a seasonal shift; our finances crave a refresh too. With a changing financial landscape, it’s time to rethink our money moves, particularly for those considering buying a new home or refinancing.

Like a surprise plotline from “Sex and the City,” homebuyers and mortgage holders were handed an unexpected financial cocktail of relief on Wednesday. The Federal Reserve, our very own ‘Mr. Big’ of finance, has decided to hit pause on its succession of interest rate hikes.

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!

Wondering why this matters to you? The federal funds rate – the cost for banks to borrow money overnight – influences various other interest rates, including the ones on your mortgage. This shift could stabilize or even slightly decrease mortgage rates, giving you a breather after the unpredictable spring we’ve been through.

Why is the Fed taking a rest? Post-COVID-19 inflation didn’t fade as expected, and in a bid to control it, the Fed began raising the federal funds rate in March 2022.But these financial maneuvers take time to have an effect.

In an interview with Nerdwallet, economist David Bieri painted a vivid picture, comparing the strategy to braking a car, but you only find out after a delay whether the brakes have taken hold.

As we move forward, how does this affect your mortgage? Amid other contributing factors like persistent inflation, bank failures, and ongoing debt ceiling negotiations, the financial market has felt like a roller-coaster ride straight out of an amusement park. However, the Fed’s decision could allow mortgage rates to cool down for a bit.

This shift could bring a pause or even a slight drop in mortgage rates. The duration of this relief, whether it’s a short skip or a longer pause, will determine if we see a rate rebound or a further decline.

Fed officials have also clarified that a rate cut isn’t likely soon. The financial future may seem as unpredictable as a “Sex and the City” script, but armed with this knowledge, you’re better prepared to make smart, informed decisions, just like you would for your summer fashion haul.

Remember, navigating your financial journey with a little help from your friends (or a savvy financial app like Wellthi) can turn these money moments into empowering milestones. Here’s to stepping into a financially sunny summer season, ladies!

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

www.federalreserve.gov – Official website of the Federal Reserve

www.nytimes.com/section/business/economy – Business and economy section of The New York Times

www.bankrate.com/mortgages – Bankrate’s mortgage section with information and rates

www.cnbc.com/mortgages – CNBC’s mortgage coverage with news and analysis


Master the Market with Friends: The Wellthi Way Inspired by Warren Buffett

Hello my savvy friend! Let’s dive into some recent financial headlines, make sense of them, and see how we can apply them in our personal finance journey using our helpful tool, Wellthi.

Jim Cramer, CNBC’s market guru, recently shared his insights about the ongoing market rally, particularly outside of tech, and its implications for investors. His observations might seem complex, but don’t worry! We can break them down together and draw inspiration from the timeless wisdom of Warren Buffett to make it more relatable to our financial goals.

Buffett, the ultimate investment guru, tells us to be ‘business-pickers’ rather than ‘stock-pickers’. He has always focused on long-term business performance, which fits perfectly into Wellthi’s philosophy of looking beyond quick gains and focusing on long-term financial health. 

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!

Remember, we’re investing in the greatest business out there: ourselves!

Cramer called the recent market shift a “jailbreak,” indicating that investors are leaving safer investments like Treasurys to jump back into the market or move money from tech to other fast-growing stocks. He noticed that many were not appreciating the market’s “ugly wins,” i.e., slight but significant upward trends.

With this information in hand, let’s talk about what it means for our personal finances. As Buffett would suggest, we shouldn’t be swayed by every trend or swing in the market. Instead, we should focus on building a sturdy financial foundation – our own long-lasting favorable economic characteristic.

As part of the Wellthi community, we can do this together, learning from each other, setting goals, and sharing strategies to achieve financial wellness. We don’t need to chase the market; we can create our own successful financial stories.

Cramer also pointed out the recent rise of Caterpillar, a construction equipment manufacturer. Despite a skeptical market a few weeks ago, Caterpillar’s stock shot up from $206 to $245 in less than two weeks. This could feel discouraging for those who missed the boat. However, remember what our investment role model Buffett teaches us: we are not in the game for quick, unpredictable gains, but for steady, reliable growth.

The Wellthi app provides us a safe space to focus on that growth. With this app, you’re not late to the party, because the party is always on! We don’t have to worry about missing out on the next big stock or being ‘Johnny-come-latelies.’ Instead, we can focus on steady savings and solid investment strategies that align with our financial goals.

The beauty of Wellthi is that we get to do this with friends. We can learn from each other’s experiences, share successes, and even use the inevitable failures as lessons, just like Buffett did with his investments over the years.

In the end, it’s not about making quick gains or jumping on the latest trend. It’s about setting our financial goals and steadily working towards them. It’s about investing in ourselves and our future, making meaningful investments in our personal finances, just like Buffett advises. With the Wellthi app, we can make this journey together, supporting each other all the way to the finish line.

Happy saving, friend!

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. Jim Cramer’s Mad Money Show – CNBC: Directly access Jim Cramer’s show to get his latest insights.
  2. Warren Buffett’s Letters to Shareholders: These letters offer Buffett’s invaluable wisdom directly from the source.

What is the COLA and Why You Should Care

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


Car Loan Blues: It’s Like That Spin Class You Signed Up For But Can’t Afford

Car Loan Blues: It’s Like That Spin Class You Signed Up For But Can’t Afford

Hey there, Wellthi fam! Ready to dive into the world of car loans and financial wisdom? We’re here to be your supportive friend, guiding you through the ups and downs of your financial journey. Let’s buckle up and hit the road to financial freedom! 🚗💰

You know that feeling when you sign up for a trendy (and slightly pricey) spin class, only to realize later that it’s taking a toll on your budget? Well, our generation isexperiencing a similar situation with their car loans these days. 

Pitfalls of Paying Late 😬 According to recent data from the Federal Reserve Bank of New York, almost 4.6% of borrowers under 30 are seriously delinquent on their payments. This delinquency rate is the highest it’s been since 2009, back when auto-tuned love songs ruled the charts and low-rise jeans were all the rage.

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, before you say, “Oh, it’s just the young folks,” let’s set the record straight. The report reveals that 2.3% of all auto loans across all age groups are at least 90 days late. It’s like a collective chorus of “I’ll pay it later” echoing across the nation. Financial challenges don’t discriminate based on age, my friends. And it KILLS your credit. 

So, why is this happening? Well, younger individuals often have less savings compared to their older counterparts, making it harder to handle unexpected costs that come with higher interest rates. It’s like when the price of your favorite avocado toast suddenly shoots up – definitely not cool, right?

Greg McBride from Bankrate.com sheds light on the situation, saying, “The payments are absolute budget busters. The average car payment for new car buyers was $800 last year, and about one in seven buyers has a payment of at least $1,000 a month.” That’s like committing to a daily latte habit from a high-end coffee shop when you’re on a drip coffee budget. It’s a financial hurdle that requires some serious maneuvering. Don’t let late fees eat your cash. 

To add to the mix, dealers are often pushing customers to finance their vehicles for shorter terms like 36 or 48 months. It’s tempting, like those trendy juice cleanses, but it ends up being less affordable in the long run. We understand the allure, but it’s important to assess your financial capabilities and make choices that align with your goals.

As if that weren’t enough, the impending return of student loan payments adds another layer of responsibility, particularly for young people. We get it – it can feel like another train coming down the track. But fear not, because Wellthi is here to provide the support and guidance you need to navigate these choppy financial waters.

Remember, financial hurdles are a part of life, just like midterms and bad hair days. What truly matters is how you approach them. With Wellthi on your team, you can stay in your lane, keep a steady pace, and achieve that financial glow-up you’ve been dreaming of. Together, we’ll conquer those financial challenges and pave the way to a brighter and more secure future. Keep learning, keep growing, and always remember that you’ve got this! 💪💙

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!