Latest news with #Wealth
Yahoo
9 hours ago
- Business
- Yahoo
This is an 'opportunistic' housing market
The housing market has been hit by high mortgage rates and low inventory, creating confusion for consumers who want to know whether or not now is the time to buy. In the video above, Bank of America head of consumer lending Matt Vernon shares the results of the latest Bank of America Homebuyer Insights Report and explains why, for some buyers, it could be an "opportunistic" market. To watch more expert insights and analysis on the latest market action, check out more Wealth here.
Yahoo
2 days ago
- Business
- Yahoo
Trump accounts vs. 529 plans: Saving for your child's future
Included in President Trump's so-called "big, beautiful" tax and spending bill are investment accounts for newborns, being dubbed "Trump accounts" or "MAGA accounts" that create new, tax-advantaged accounts with $1,000 for each child born from the beginning of 2025 through the end of 2028. Yahoo Finance Personal Finance Editor Molly Moorhead comes on Wealth to judge the best method to save for your child's future and education, comparing the proposed Trump accounts with 529 savings plans. To watch more expert insights and analysis on the latest market action, check out more Wealth here.
Yahoo
4 days ago
- Business
- Yahoo
Why the rise in consumer confidence is 'only a partial rebound'
Consumer confidence came in stronger than expected in May. The Conference Board senior US economist Yelena Shulyatyeva joins Wealth with Brad Smith to take a closer look at the data. To watch more expert insights and analysis on the latest market action, check out more Wealth here. Consumer confidence rebounded in May after five consecutive months of declines, jumping to 98 from a reading of 86 in April, with expectations for the future surging over 17 points to 72.8, still below the 80 level, which typically signals a recession ahead. Joining me now on this is Yelena Shulyatyeva, who's the Conference Board Senior US economist. Yelena, always a pleasure to grab some time with you here. Just take us into what we're ultimately seeing in terms of the consumers and what's driving the most recent readings as of right now. Well, we saw a significant rebound from the deep from the depths that we observed over the last several months. Nonetheless, despite this rebound, which basically beat all the expectations and the consensus of economists, you know, we are only back to the low levels that we observed back in 2024. So, it's in the sense, it's only a partial rebound. So, the cutoff date for this particular survey, for the preliminary May reading was May 19th. So that means it doesn't include the period during which we heard that tariffs may go up on European goods and, what's probably more important, that tariffs may go up on components for Apple products. So 25% tariff on Apple products could be, you know, could make consumers feel a little bit less optimistic, but we'll see. So, also, what's interesting is that tariffs obviously was the driver behind the significant rebound. We split the sample on May 12th and what we saw is that we saw some improvement before that date, but there was a lot of improvement following the US-China trade deal. And so, with that in mind, I was taking a look at the expectations index, which is essentially the outlook, the short-term outlook for income, business, labor market conditions, and that is at 72.8, remaining below this threshold of 80, which we know typically signals a recession ahead. Is that something that you were placing a high probability of and and how that is actually factoring as well through to the consumer mindset as they're assessing their own opportunities both in employment and how that trickles through to their spending? Sure. The recession probability, we also ask consumers about that, uh, we saw a decline in consumers' assessment of a recession. Here at the Conference Board, we have not expected a recession either, you know, before the US-China trade deal was announced or, obviously, after that. Uh, we see a significant slowdown in economic growth towards the end of the year, but by no means a recession. I think what consumers are telling us is that they are concerned about tariffs, so there's no doubt about that. We see through in their writings, for example, but I think what they're telling us they are not so much concerned about the state of the labor market as much. So, they still have jobs and as long as long as they have jobs, they will continue to spend. Uh, we ask consumers some special questions in the survey this time, and one-third of them are telling us that, you know, they are putting aside some money so, for a rainy day, so to say, if they can. So, we could see a slowdown in consumer spending just because of that, not because their finances are bad or because, you know, they're losing jobs, but just because they are more concerned about the future. So another thing is that half of consumers are concerned about not being able to afford the goods that they would like to purchase. And just lastly, while we have you here, does it seem like a lot of those purchases are being dramatically shifted? Whether whether that is the decision to go out and eat during a week or even the decision to to go on vacation or buy a larger purchase, a good like a car. So, we saw declines in those things, but in the May survey, we saw a significant rebound in all across different goods and services. Consumers are entering the summer period with some optimism here, so let's hope that that will last. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
The 4% rule: How to make your savings last through retirement
Nearly two-thirds of Americans are more worried about running out of money than death, according to Allianz's 2025 annual retirement study. Schwab Center for Financial Research managing director of financial planning, Rob Williams, joins Wealth to outline the 4% retirement rule and how it can help ensure your retirement savings last. To watch more expert insights and analysis on the latest market action, check out more Wealth here. A recent study by Allianz found nearly two in three Americans, or 64%, worry more about running out of money than death. And even with this fear, 62% say that they are not saving as much for retirement as they would like. So, we want to help you get retirement ready by talking about how much money you can spend in retirement without running out. One common method is known as the 4% rule. According to Schwab, the 4% rule says that you should add up all of your investments and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount to withdraw to account for inflation. By following this formula, you should have a very high probability of not outliving your money during a 30-year retirement. But our next guest says that this is not a one-size-fits-all plan. Here with more, we've got Rob Williams, managing director of financial planning at Schwab Center for Financial Research. Rob, good to have you here. So, let's just start with this. Why is 4% a reasonable place to begin? Well, it's a rule that's been around for almost 30 years now, and it was a great place to start because, as you said, Brad, so many people worry about how much to spend in retirement and need a place to start. But a couple things that we've written about, and I think are important, it's a rigid rule. So, it assumes that you increase that dollar amount. So, say, 4% times a million, that's $40,000 each year with inflation for a 30-year retirement and never make any adjustments. It also assumes that you want a very high probability that your money's not going to run out, which is makes sense, but what if you can remain flexible and make some adjustments? And most of all, it's not personalized. It's a fine place to start, but with technology, with modern planning, we can do a lot better if we know a little bit about your situation, and you can remain flexible. So, how do you determine your own personalized spending rate? Well, the first is to determine what your time horizon is because a 30-year retirement, if you're 65, which is what the 4% rule was designed for initially, 65 to 95, that's a 30-year retirement. But let's say you're in your 70s. Well, perhaps you could spend a little bit more than that. The other is, how much confidence do you want to have that you're not going to run out versus legacy goals, so leaving money behind. And if you want very high confidence, you spend less and potentially invest a little bit more conservatively as well. And the last, the one that I think is most important is, how flexible can you be? Can you divide your expenses into your essential expenses and then some discretionary expenses? And most investors and retirees naturally are going to cut back on some of their discretionary spending, say, in a down market. And if you do that, that can really help your savings last. So, how flexible can you be? Those are three questions to ask to help you get to a more personalized spending rate. So, once you've asked yourself all these questions, just take us through the math here. Let's assume 30-year time horizon and a conservative allocation here, then how do you make sure that that plays out correctly, and you don't run out of money? Sure. And this is a simple chart that we've put together, and there's more to it, but in different scenarios. But in this scenario, let's take the conservative example. Conservative at the top means how aggressively you've invested your portfolio. And in this case, based on our research and our numbers, the conservative portfolio is 60 to 70% bonds and the rest in stocks, and the more aggressive portfolios includes more stocks. And what it says is, in this case, you spend 4.1% in the first year of a 30-year retirement, and then, based on our current projections of how we think different asset classes, stocks, bonds, et cetera, will perform, 4.1% would be the highest initial spending rate that first year, as you described, Brad, and then you increase it every year with inflation to have a very high, a 90% probability of lasting through retirement. So, that's what the table means. It's a fine place to start, but for all the reasons I suggested, you can do much better by personalizing it by staying flexible and using a modern retirement income plan. Rob, good to have you here with us. Thanks so much. Good to be here. Thank you. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Tips from a financial expert on saving for specific goals
Most Americans feel financially ready to reach their goals, but wish they had a plan in place. HerMoney Media CEO Jean Chatzky joins Wealth to share how automation, behavioral finance, and visible goals can help savers build better habits. To watch more expert insights and analysis on the latest market action, check out more Wealth here.
