2024 presidential debate, housing market, & more: Best of Wealth!

In this episode of Best of Wealth!, Yahoo Finance's Brad Smith spoke with executives, economists, and experts to discuss topics including the first 2024 presidential debate, investing portfolios, medical debt, housing market, AI, retirement planning, travel, and student loans.

Guests include Geltrude & Company founder Daniel Geltrude, Postmates founder Bastian Lehmann, Janus Henderson Investors portfolio manager Jeremiah Buckley, Self Financial financial expert and head of community Monique White, KPMG senior economist Yelena Maleyev, Alibaba.com (BABA) president Kuo Zhang, Travel expert Mark Ellwood, IRAHelp.com Founder and CPA Ed Slott, and Mark Kantrowitz, student loan expert and author of "How to Appeal for More College Financial Aid."

For more expert insight and the latest market action, click here.

This post was written by Mariela Rosales.

Video transcript

Welcome to Wealth Yahoo.

Finance's personal finance focus show, helping you think about your money holistically and comprehensively.

The 11 a.m. Eastern Time Hour gives you the best resources for building your financial footprint from our hand picked community of experts.

Take a listen to what they had to say as we got the show off the ground.

We wouldn't ask rather about tax policy.

During the first presidential debate, President Biden and former president Trump mostly argued about Trump's 2017 tax cuts.

Here's what they had to say.

The tax cut spurred the greatest economy that we've ever seen just prior to COVID.

And even after COVID that $2 trillion tax cut benefited the very wealthy.

What I'm gonna do is fix the taxes.

So what do we need to know about each candidate's tax policies?

We've got Daniel Gelt Trude, founder of Gelt Trude and company here with us, Dan.

Good to see you.

Thanks so much for hopping on.

So, from what we could decipher about what either of the tax agendas would be, what do you make of it?

And what should the American people actually take away from the debate on the topic?

Of tax.

Well, we didn't get a lot from the debate last night.

Most of what we know about potential tax proposals really relates to what they've said outside of the debate.

Uh As you, as you just said, there wasn't a lot of detail there, but I could, I could tell you where I think each of them are lining up.

Now, let's start with this because it's an important point.

Brad is that unless whoever wins the presidency is going to have both houses of Congress, it is very unlikely that there are going to be tax changes because you're gonna have gridlock, especially over a topic like taxes, which becomes very sensitive.

Now, what will happen again as you just talked about is the Trump tax cuts will sunset at the end of 2025.

So if nothing happens in terms of new legislation with taxes, we are going to go back to what the tax laws were, were for individuals that is of what it was in 2016.

So we're just gonna go back from where we started eight years ago.

Now, the big picture here is is that Trump is talking about more tax cuts specifically that he wants to make the individual tax cuts permanent from back in 2017.

He's looking to once again cut potentially corporate income tax.

He said that he does not want to tax tips from those who work in service industries.

I also think you're gonna see Donald Trump do some defunding potentially of the IRS, which came about from the Inflation Reduction Act.

You know, there was a lot of talk about all these auditors.

I think Donald Trump may be very well make a move to undo that funding.

And I also think we could see some cuts in capital gains tax biden.

On the other hand, probably is going to propose the exact opposite.

He's talked about, uh, more taxes on the wealthy.

So you would see individual tax rates going up.

You're gonna definitely see a proposal to change the corporate income tax because he said many times corporations don't pay their fair share.

We could see some changes on capital gains tax rate.

We could see a wealth tax on billionaires.

So there's a lot in play, but again, nothing happens unless you have both houses of Congress.

Yeah, that's a key reminder here and, and it certainly does come down to some of the other down ballot voting as you were mentioning as well for those offices, particularly Dan.

And as, as we think about some of the tax credits that have been allowed, I mean, there's been everything from ev tax credits to child tax credits for households that are trying to wrap their minds around what may change, what may get taken off the table and have a significant impact to their own personal economy.

If you will, what is, what is the signal and, and what are some of the larger items that could roll off that reframe that household, uh, financial balance if you will?

Well, what I think happens there as far as any tax credits that you brought up is that with EV si do not see Donald Trump putting, uh any tax credits out there related to evs.

And, uh, you know, as he alluded to, uh, he, he does want clean water and clean air, but he is not talking about really having any type of major climate initiatives where Joe Biden is really the exact opposite.

So I think we could see a lot more going on related to credits for, uh for the environment.

Now, as far as what would happen with families, they both may align very well related to having child care tax credits because there's a lot of voters that, that matters uh for.

But keep in mind no matter who wins this election, right.

They're gonna be a one term or, or it's just gonna be the next four years.

So that does give them flexibility to not have to worry about re-election.

So they'll probably push really hard to make changes, what will pull them back and it could even come from their own political parties in Congress is those in Congress that have to worry about re-election are gonna be very, very sensitive to voters pocketbooks because that's always an issue for people.

It's not how much uh you make, it's how much you keep, that's most important for any anyone who's paying taxes in the United States.

There's a real reluctance to commit to big discretionary purchases as more Americans are piling on credit card debt.

And our next guest is looking to make purchases more affordable by allowing sellers to trade in an item that they own to reduce the cost of a new purchase right at checkout.

Joining me now to weigh in on the launch is Bastian Lehman who is Tip Top founder and Ceo Bastian.

Great to have you here with us.

All right, first, just how would this work in practice?

What goes into the verification process and kind of understanding what type of value someone would get for what they're trading in in order to put that value towards a future purchase.

Good morning.

And thanks for having me.

Um Let me, let me dive right in.

You just mentioned it, Tip Top is this incredibly exciting product that we're launching today?

It's, it's a new way to pay for things, maybe a new way to pay for things.

Since the credit card, what we do is we allow you to trade in things you no longer need when you like to buy something new right at the checkout.

And that, that is uh really what is the key messaging piece here?

Um If you're at the checkout, right?

When you want to buy something, we allow you to offset the cost of that new product by trading something in and the whole process takes a couple of seconds.

What's this limited to?

I mean, can I trade in old shoes in order to get some new ones?

Like, where are you finding some traction right now?

Early on?

Well, uh, your old shoes may probably be better off at the goodwill.

Um, but I'll tell you what the average US household has around $2500 worth of goods that can be traded in and that we match with our catalog.

There's around 50,000 products and growing that we have in our catalog and that accounts to around $280 billion worth of goods in us households.

So I think about it as a bank account that American customers don't know they have and we give them access to it.

What is the strategy here for tip top?

How does tip top see its revenue model, its profit model even going forward?

We, we, we want to offer this incredible superpower um to the customers and we won't charge them.

We charge a modest fee to the merchants that participate and that integrate tip top on the checkout.

And ultimately, we hope that there is enough margin in the products that we are purchasing from customers and that we're ultimately going to resell certainly th this is a tough capital, uh tough capital environment, how well funded is tip top.

Uh and, and how do you kind of look across the entire landscape and say where you're going to deploy this capital to make sure that you can get to that next growth phase as well.

We're, we're a very small team.

We're only around 14 people, uh very engineering heavy and we're focusing right now exclusively on the customer experience.

We, we want to get something out there and we believe we did get something out there that customers love and that customers love to use.

Um You know, when you launch a company and when you run a start up, your, your biggest job really is to test a bunch of hypotheses in, in, in really fast order.

So we're extremely excited about getting the product into customers hands and hopefully, it means that we now have to shift our focus to scaling.

Now, a few of us have built Postmates before um and we had to scale in a market that was totally foreign to us extremely fast.

So we feel well equipped for the scaling challenge ahead.

Well, we're keeping a close eye on semiconductors here this morning, the sector seeing a little bit of pressure after mis Q three earnings were overshadowed by the company's Q four guidance falling short of A I driven growth expectations.

And while the A I fueled rally has pushed broader markets to new heights this year, let's not forget about some of the other that could enhance your portfolio here with more is Jeremiah Buckley, who is the Janice Henderson Investors, portfolio manager.

Great to have you here with us, Jeremiah.

I mean, there's been so much crowding into the tech trade, especially within the theme of generative A I.

But where else are you sensing some opportunities right now?

Yeah, thanks Brad.

Thanks for having me on.

I appreciate it.

Uh So there are other areas of the market that we're excited about as well.

So uh one example would be health care.

So we're seeing lots of innovation and biotech as well as medical devices, uh which continues to be exciting and we're seeing uh good growth there.

Uh We're also excited about uh areas of consumer discretionary.

So we think e-commerce continues to grow at a rapid rate.

Um But we also think that cash rich consumers are really in a good position right now.

Uh And so one of the areas that we like is travel, uh we continue to see strong recovery globally.

And so those companies that are exposed to global travel trends uh continue to be favorable for us.

And, and the last one, a more kind of value oriented uh area of the market is uh capital markets.

You know, we've seen a couple of years of uh weak capital market activity.

Uh We think with interest rates, stabilizing a lot of pent up demand, we'll start to see an improvement in capital markets as well.

And so some of the investment banks are a lot of the companies that facilitate capital markets activity.

Uh We think are also attractive here.

You know, it's interesting.

We were, we were speaking earlier today with uh Kevin Gordon of Charles Schwab who was talking about one of those sectors that you mentioned in health care.

And I just want to zero in on that for a second because he said as of yesterday and he was talking to us, um you know about some of the areas that he sees right now as as weak, but ultimately saying only two sectors with less than half of their members are trading above the 200 day, moving average consumer staples and health care.

What what does that indicate to you?

Especially as you're looking across sectors and trying to figure out where there still is some broadening that has yet to take place.

Yeah, so the market has certainly been more aggressive and so the two sectors that you name are are certainly more defensive sectors.

And so they, they've trailed this as people have shifted uh capital to uh the higher growth sectors like technology and communications.

But we, we think that there's uh attractive growth opportunities like I mentioned in in biotech and and me devices.

Um there's a lot of innovation, you see companies that are growing, you know, high single digits, low double digits.

And so we think health care can be both defensive uh if we do have some volatility in the markets.

But it also is offensive in that a lot of companies are innovating and driving good and attractive growth.

You, you also mentioned travel a moment ago, one of my favorite sectors to talk about here and continue to track when you look across what the difficulties are for maintaining margins right now.

And especially as many of the airlines, if we're looking at that particular subset of the sector as well, are trying to figure out their own routes, their schedules and the ability to take on new aircraft.

How much of a concern does that kind of present as you're evaluating the overall health of that industry?

Yeah, so uh we're focused more on our ownership is in hotels as well as the OTAs like booking holdings.

Um We think those are better business models than the airlines, but obviously the airlines are an important aspect of making sure that we have enough supply.

Uh so people can uh fly to those hotels.

Um As far as the airlines, I think we're seeing differentiated results between the domestic focused airlines as well as the global airlines.

Um A lot of our thesis around the travel recovery is outside the US.

Uh I think we're back to a normal trend line in the US.

And so with the those capacity additions for the airlines, that's led to some difficulty for those uh us focused airlines.

But if you look at the global airlines like a Delta or United, uh they've had better results Um And that, that's a big part of our thesis is that global travel recovery, Jeremiah Buckley, who is the Janice Henderson Investors portfolio manager, Jeremiah.

Thanks so much for taking the time here with us today.

Thanks a lot for having me on 41% of Americans have medical debt.

That's according to KFF.

And those outstanding balances can take a toll on credit scores to discuss medical debts, impact and how you can rebuild your credit.

We've got Monique White who is a self financial head of commu and financial expert back here with us, Monique.

Great to see you first.

We gotta figure out number one when you do take on medical debt, what are the first steps that you can take to start to make sure that it doesn't hit your credit score or loom over your credit score for too long, Brad.

Thanks for having me back.

Um That's a great question.

Uh We know it's no secret that millions of Americans are burdened with medical debt right now.

And um it's really important to be proactive with that debt.

It's it's a little bit unique than any other consumer debt.

So right now, the current policy is that a hospital has 18 months to collect that debt from you and they also cannot report any medical debt under $500.

Um So there are some steps you can take first is to review your bill, do your due diligence, make sure everything is making sense, contact that hospital, see if you can come up with some type of payment plan or good faith payment so that it does not hit your credit report.

And then also just knowing your rights, as I stated earlier, they have 18 months to try to collect that debt, they cannot report anything under $500.

Um So keeping a monitor on your credit report is extremely important.

Um so that you, if you do see those inaccuracies on your credit report, you can look into disputing that what happens after the 18 months.

Yes.

So I think it's important to address you know how medical debt impacts your credit report.

So if you have an unpaid medical debt, it can get into collections and that collections account can potentially damage your score up to 50 points.

It can also remain on your credit report up to seven years.

Um And though although medical debt is not weighted as heavily into your cycle score as other consumer debt, it still did that initial damage to your credit score, which just makes it a lot harder for consumers to get their finances back on track.

Yes, certainly.

And so say you have seen an impact to hit to your credit score because of medical debt.

Where can you perhaps seek some remediation from that?

Yeah, that's a great question.

Um So there's three things you can do just like the advice earlier, review your bill, make sure everything looks accurate.

If you need to contact your insurance company or the hospital to review your bill, you can definitely do that.

The second thing is to seek uh support for that.

There are agencies in your area like for free coaching and free counseling where a coach or counselor can sit down and, and come up with the action plan and out how you can manage some of this debt.

Someone is coming off of a medical emergency, they might have some residual stress from that.

So it's really important to try to get support for that.

And the next thing is to consider adding additional trade lines to your credit report so that you can generate some type of positive payment history.

Monique White self, financial head of community and financial expert, Monique great tips, actionable as we need them.

Thank you so much.

Thank you our top story this morning.

More troubles in the housing market here.

New home sales in May plunging 11% from the prior month to 619,000.

Analysts on Wall Street expected 633,000.

So that's a big miss there.

The drop in sales activity also leading to an uptick in available inventory, which means more homes are sitting on the market.

All of this largely an impact of high mortgage rates which continue to weigh on home buyers here.

With more reaction.

We've got KPMG economist Yelena Malayev, Yelena.

Great to have you here.

We wanna just get your broad read here on what we're seeing in the housing market, considering some of the moves that we're now tracking both week over week on the mortgage rate side and then month, over month on the sales side as well.

Definitely, thank you.

Uh The housing market is definitely in the fragile state right now.

This higher for longer interest rate environment is weighing on potential buyers.

Uh those who own a home and are thinking of selling, they're locked in with a significantly lower mortgage rate than is available currently in the market.

And then of course, builders are facing a lot of hurdles with, you know, still tight labor market for the construction industry, uh the need for land materials.

And then of course, they're also facing uh financing costs that are going up due to the higher interest rate environment.

Uh around the end of last year, we the market was expecting for interest rates to be lower by now.

And of course, that hasn't happened yet.

So this kind of longer uh time frame of high interest rates is really starting to take a toll on the housing market.

When do you expect the housing affordability squeeze to perhaps abate a little bit.

It, it's, it's a great question because uh we were expecting interest rates to be lower by the second half of this year.

Now, we've pushed that forecast out into December.

So we do expect one rate cut in December, which will help bring overall mortgage rates to perhaps around 6.5 by the end of the year.

That's probably not what people who are waiting for those 3% mortgage rates are wanting to hear.

But unfortunately, those days are behind us barring any sort of crisis or anything that would require rates to go back down.

Uh, that low, uh, by the end of next year, we could have a few more rate cuts in the pipeline, maybe bringing mortgage rates to 5.5.

But the other side of the affordability puzzle is the housing costs, right?

So the home values have still been rising very significantly because of that demographic tailwind for millennials uh aging into their prime home buying years, baby boomers wanting to age in place and this significant lack of inventory both in the newly built and resale market uh meeting these demographic uh demands that is going to keep a floor under home prices for quite some time.

But the mortgage uh question, uh we should have some reprieve into next year.

Certainly.

And, and so one of the huge things that we're considering within the existing homes and new homes kind of combination to really round out uh the entire housing picture, not the entire housing picture, but at least uh part of large line share of it is really where on the new home sales side, we've continued to see new home build outs actually account for more percentage than some of the historical averages.

What is your anticipation for how that will continue to moderate as we move on throughout this mortgage rate environment?

Definitely.

And this period of higher interest rates, especially when we first started to see them pick up quickly in 2022 should traditionally have made builders pull back on building.

But instead due to the demographic tailwinds, they've ramped up building, of course, with significant hurdles, they can't ramp up that quickly to meet demand.

But they've been really benefiting from the tight supply in the resale market by being able to build homes, offer mortgage rate buy down instead of the 7% in the market, they might offer something like six or 5.5.

And they've also scaled down, they've been able to uh change their building so that they're building smaller homes, something more fit for a first time home buyer.

Uh Now that's not the case across the entire country, but definitely in some pockets of the country where it's easier to build.

And then of course, uh continued tightness in the resale market is just going to help keep uh that balance of more newly built homes on the market to be on that higher end rather than traditional um time frames.

But of course, as mortgage rates come down, more sellers will start to, you know, re-enter the market.

We have seen a pickup in inventory.

It's still quite low in the resale market but it is picking up.

So if mortgage rates come down, people feel less, uh, constricted by that lock in effect, uh, we will have more of that balance where newly built homes could be more of that share of the market, let's say 20% rather than the 35 or so we've seen lately, the World Trade Organization, the WTO as you know, them in your hood kicked off its 40th Geneva Week on Tuesday.

It's a twice annual week long event where business leaders and executives travel to Geneva Switzerland to weigh in on recent developments in international trade.

Now, one point of interest this year is the potential of micro, small and medium size enterprises also known as M SME S. Now M SME S, they currently account for 90% of businesses, more than 70% of employment and 50% of GDP worldwide and more experts believe that they are the backbone of many global economies.

Joining me now live from the conference for this Yahoo Finance exclusive is quote Zhang who is the president of alibaba.com.

Quote.

Great to have you here and thanks for stepping away for a hot second from the discussions taking place to hop on with Yahoo Finance.

What are international business leaders pledging to do to protect small business growth from the conversations that you're having?

Sure.

So hello from uh this, this quote from alibaba.com and now I'm in Geneva and uh actually, you know, kind of a discussion with uh WTO S with it CS about our kind of ongoing program to help uh to either help or incubate or empower Sme S. So our business uh I talk a little bit about alibaba.com.

We are founded in 1999 by Jack Ma.

Actually in day one, we are focusing on working or serving for SME si mean SME S for the both sides, both the sellers and the buyers.

Actually, now we are serving more than 200,000 of suppliers all over the world and we are serving more than let's say 50 million of the SME S as buyers all over the world.

So, so in a simple word is that we are using all the digital tools to transform the way they're doing business and help them to lower the barriers to kind of entry the global platform.

What do you believe that the health of small businesses is worldwide based on the interactions that you're seeing with alibaba.com?

Right?

So I can, I can give you an example first that when Alibaba founded in 1999 at that time, I see the numbers, you said that the 50% of the GDP kind of global trade GDP contributed by SME S. But at that, at that time, in China, actually, that number is less than 2% back in 1999.

So now actually that the number in China is more than 62% of the kind of global trade GDP is contributed by the SME S. You can see in the last 20 or 25 years, the SME S actually they are have more and more power in the global state and now they are the backbones of the global business and that the similar things that happens all over the world, both in Europe, in us, the developing countries as well as in developing countries like uh such as Asia, like Latin America like Africa.

So we are using our digital tools to empower them there.

What is the ability for SME S and, and and micro and small and mid size enterprises to make the digital transformation like some large enterprises and multi billion dollar conglomerates are making as they're spending heavily on everything from Blockchain to generative A I seemingly to make sure that they're staying ahead of the curve technologically.

Yeah, sure.

So what we are doing actually take A I example.

So what we are doing is to democratize A I.

So we are heavily investing on the other technology side and we want to using the technology to empower the SME.

So especially for this year, we are focusing on two things.

One is A I to using A I, we can improve the efficiency for both buyers and sellers and also transform our platform from a kind of sourcing engine to a creative engine.

And the other is to kind of upgrade our by chains, which is called Alibaba Guarantee.

The meaning that when the buyer buy a product or source a product from alibaba.com, we will take care of all the logistics of the extra payment financing services as well as after sales services.

So that's greatly kind of lower the barrier and help the small SME S to build the trust between each other.

So this is basically what we are doing.

Quote.

I I wonder especially considering the environment for elections this year with more than half of the world going to be participating in elections of some sort or another that could change what globalization looks like that could impact companies like alibaba.com as well.

How are you positioning yourself to navigate what the outcome of some of these elections could be knowing that it also impacts your core customers, both consumers or end consumers of products but also other small businesses and mid size enterprises.

See.

So um from our perspective, actually, you know, alibaba.com is uh funded for more than 25 years.

So there's a lot of uh elections, a lot of change um during this kind of uh time period period.

And what the latest change or the challenge is the pandemic.

Actually, after the pandemic, we see that actually more and more SME S now is a power time for them to change to embrace the digital.

And you're talking about the elections.

Actually, what we are focusing on is the things that does not change.

So take the SME is a bi example.

If you are an entrepreneur and you want to build something, build your own brand and sell, there are a bunch of things that you need to focus in on what product I'm going to build, who are the customers, what are the targeting market and how we can find kind of best partner to manufacture it and with the best price quality and what kind of employees I'm going to hire.

And in the end, probably there's a tax and the tax tariff is a part of the tax.

So they need to consider a lot of things.

But we are back to the fundamentals is the demand of supplies, how to provide all the buyers with a variety of supplies, high quality with a competitive price and delivering time.

And the we just keep, keep kind of doing on that and perfecting the tools and make sure that we can empower sme S and to make it easy to do business anywhere.

So these are the things we think is, is not going to change for 100 years.

So, and that is what we're focusing if, if there were more tariffs that were ratcheted up, would that have a net impact on your business?

So, uh first of all, we are kind of uh a platform which supports global supplies and the supplies, not only from one country actually, now we have supplies from uh 200 different countries and for example in Eu in Europe.

So there are kind of wines, there are fashions, there are machineries and there are also a lot of other tools from Germany, from France, from Italy.

And we have lots of uh suppliers from Southeast Asia as well.

So that this number one, the second part is that as I mentioned, the fundamental rule for global trade is uh demand and supplies.

So always find the better supplies with better kind of price and adding together is a kind of uh competitive uh strength for the supplier side.

What we are doing is just lower the barrier and letting them easy to kind of uh go to the global to uh do business with each other.

So that is uh basically what what they are doing and that is what we are focusing to do.

Quo Zhang alibaba.com president quote.

Thank you so much for taking the time here with us today.

I really do appreciate it.

Thank you.

We've been keeping an eye on the travel sector this morning.

The number of consumers planning a vacation over the next six months continued to increase, which is still above last June's level according to the conference board and shares of carnival cruise line, one of the players in that industry pushing higher on continued demand to travel.

The cruise giant posting record sales for the second quarter.

So far, 2024 has been a record year for cruise operators with more consumers seeking out new experiences at affordable rates.

So for more on the sector as a whole, I'm joined by travel experts, Mark Elwood.

Mark, great to have you here in studio with us today.

Ok.

So we gotta break down what you would make of the travel environment this year compared to last year.

I mean, if we're just to look at a few stats, ts a travel throughput, we're already eclipsing some of those more from last year, which finally got past some of the pre pandemic records that we've seen.

I think if you take a moment and you think about May 2020 when it felt like no one was going to travel again.

The TS A numbers were at sort of 19 sixties levels.

It's quite mind blowing how in four years we've not just rebounded.

You're seeing rates of travel and rates cost rates way higher than 2019, which was already a record year and we're not really seeing any slowdown.

Even if there are headwinds in the economy, the travel business is crossing its fingers and saying, looks like we're not being affected yet because people really, really want a vacation.

Where do they want to go?

Where are they going?

Do you know what I think you're saying?

You've seen a couple of things.

I think you're seeing the Greenback is still very strong, it's softened a little bit.

But currency based tourism means that the UK, where I'm from the pound is dirt cheap at the moment.

So it's a great time to go to London.

If you want to go to Turkey, the lira is very weak and even the Euro remains quite weak.

I think you're also think seeing people think, do I go to the med in the summer?

It could be 100 degrees.

Do I want to sightsee in 100 degrees?

Heading a little further north Denmark, Iceland travel agents will tell you they're very busy this summer.

We're looking at some of the hard travel destinations this summer and a lot of these international territories that we're looking across here.

I mean, they're gonna have different price ranges.

How do you see that varying across income levels right now too?

Well, look, you're always good to see.

There's a number of Americans with a passport is, is surprisingly small when you look at the data, especially compared to developments.

Remarkable.

I mean, I also can't really say much admit this because I just got mine like last year or two years ago.

Yeah.

So, ok, so I think everyone means, oh, I'll do it next year.

I'll do it next year when, when there's a trip.

But you're gonna see there's a lot of domestic tourism.

I I think Americans often don't realize you look at the sticker shock of a price transatlantic.

Prices are very, very expensive but not necessarily the holistic cost of a trip.

Because remember if you're spending a lot to get somewhere where it's much cheaper when you get there, it might be cheaper than a local trip.

Some tips for becoming a master traveler.

Ok.

I feel like I'm going to be the Yoda of travel for you right now.

What we, what we want to talk about, we want to talk about, about flights essentially and thinking about how to book a flight.

Have you ever heard that?

There's a magic time to book a flight?

Yes, you heard this right.

Well, I thought it was Tuesdays, Tuesdays, Tuesdays at 2 a.m. Wednesday.

That is the zombie myth that will not die.

It is not true.

Oh, my goodness.

All right.

So I can close my tab.

Now you wanna sign up?

There's a lot of, there's a lot of free services with paid tiers as well.

Things like going dollar flight club, they monitor flight prices for you and the way to get deals today is to sign up for them, click the routes you wanna fly and they will burp out an email to you anytime those routes are cheaper.

So you can don't have to set the alarm clock for 3 a.m. That rule is done.

Ok?

Um, I would also invest in air tags, you know, losing a bag.

Maybe you're forced to check a bag at a, at a, at a gate.

If you've got an air tag in there, you can always say where it is.

Ok. Um, the especially if you're traveling with equipment, golf clubs or skis or any of these things.

And it's interesting you'll find, I just got a new dozy suitcase and it, it has a little air tag, a little air tag hanger included in it.

So you'll, you'll see that too.

So, those would be my two big, big tips if you want to be a pro traveler, one is basically about never getting ripped off and one is never being the person.

And remember when you check a bag, use your phone, take a photograph of it before it leaves your hands because you'd be surprised how bad we are at describing things.

We think we need saving for retirement can be confusing.

59% of people who are not saving for retirement think they are according to Principal Financial Group and often times changes in the process could mean that you're losing out on some cash or benefits.

So to break down what this year's opportunities mean for you.

We've got Ed Slot Ira help.com founder and CPA here with us in studio.

Ed's also the founder.

Uh excuse me, the author of the new book, the Retirement Savings Time Bomb Ticks Ladder.

I guess it's the founder of ideas going into the book here as well.

Ed nonetheless, thanks so much for taking the time to be here.

Absolutely.

So le let's dive into some of the changes that have turned into opportunities for this year for people who are saving for retirement.

What is the top one that they need to be taking advantage?

Well, the change is the opportunities of things you wouldn't think of taxes and inflation.

Why is that?

Well, everybody thinks inflation is bad and I get that because things cost more.

But when it comes to taxes, inflation is great because brackets expand too tax brackets.

So more money can come out at lower rates.

And the other opportunity now is the low rates is the low rates we we have now we have historic low tax rates now.

So the key to anybody saving for retirement is if you have an IRA or 401k, remember those accounts are loaded with taxes.

The only way you can get to that money is by paying taxes.

So if you can get that money out now, because I'm worried about future higher taxes, we have debt limits.

The laws may be changing.

So anybody stockpiling money in an IRA or 401k should be taking action.

That's what I call this retirement savings time bombs louder.

It's the tax.

I call it a ticking tax time bomb.

Say that three times faster.

I I don't wish to hear but you Ira.

So timing is everything and you talk about this in your book as well here.

I mean, looks different for everyone across generations and across what your actual target day funds might look like as well here.

So what is the best way to really kind of run the calculus around your own timing.

Where does the thought process need to begin?

One word?

Roth, Roth, two words.

Roth Ira.

It's the best account ever created of all.

Not even just retirement because it grows tax free, income, tax free for the rest of your life.

And even 10 years beyond to your beneficiaries.

So everybody knows it's the best account to have.

The only question is how much are you willing to pay to get it?

And the price you pay is the tax rate, which as I said is very low now.

So you talk about generations, young people should only be doing Roth Ira s. Imagine if people my age baby boomers ha had the opportunity to start from dollar one building a tax free retirement account, all of their money is stuffed in taxable accounts.

So imagine if you starting a job or in a job and you, you have years, you know, young people have time on their side.

You should only be doing Roth 401k s at work where your money grows and builds and accumulates absolutely tax free or Roth Ira S to contribute to a 401k anymore, just for a deduction that you have to pay back at the worst possible time, years late or in retirement, not worth it anymore.

And so one of the other mechanisms that people are trying to really familiarize themselves with in the event that they are feeling philanthropic qualified charitable distributions as Well, here, how can this help as part of the broader strategy?

Well, that a limited population, it's a great thing to give to charity.

If you're charitably inclined, I never say give to charity to save taxes.

Because if that were true, give all your money away.

You have no taxes, nobody's doing that.

But if you're giving to charity anyway, the best dollars to give are your Ira s and they have this provision, qualified charitable distributions.

The only problem with it, it's limited.

It's only available to Ira owners who are 70 a half years old or older.

But if you're in that, in that age group and you have an Ira and you want to give to charity, that's the way to do it because you can get your money out at 0% tax rate.

What generation would you say is the best equipped or prepared for retirement because of some of the, the strategies that can be employed right now.

Gen X, every generation.

Actually, I was gonna say Gen X and the millennials, I guess that's gen Y or whatever it is because they have time on them on their hands.

But the parents, the baby boomers or maybe grandparents, they have substantial accounts and they could, they're in a position to do Roth conversions, get that money out at low rates, move to tax free territory and have more and keep more of their hard earned money and even pass it on to the their generations.

It's at Ira help.com founder and CPA and author of the book, The Retirement Savings Time Bomb Ticks Louder.

Thanks so much for taking the time here with us today.

If you have student loans, you may wanna listen up here.

The Department of Education is conducting a payment adjustment that could give millions of borrowers credit towards their loan forgiveness or see their loans forgiven automatically.

But for some borrowers to be eligible, you may have to consolidate your student loans by June 30th.

Here with more is student loan expert Mark Kantrowitz.

Mark is also the author of How To Appeal for more college financial aid there.

You see the cover of his book, Mark.

Thanks so much for taking the time here with us today.

All right.

So what, what is the key deadline that people need to keep in mind here, June 30th, they have to submit a federal direct consolidation loan application by that date to get the benefit of the payment count adjustment for FFEL loans and Perkins loans and heal loans.

And so with that date in mind, I mean, what kind of forgiveness could we potentially see if everyone who qualifies does apply?

Well, it used to be the case that if you consolidated your federal loans, whether they were FFEL or direct loans, any qualifying payments that you made prior to the date of consolidation got wiped out, it got reset to zero.

Now with the payment count adjustment.

They're not only making certain adjustments to the qualifying payment count, but they are also going to let you get the benefit of any qualifying payments you made before that deadline when you consolidate.

So for example, um there's supposed to be forgiveness at the end of an income driven repayment plan after you make either 20 or 25 years worth of payments, that's 240 or 300 qualifying payments.

Uh, but the loan servicers weren't keeping track of these qualifying payments.

So the US Department of Education has to retroactively reconstruct those payment counts, but in some cases, they weren't able to do so.

For example, the economic hardship deferment counts as a qualifying payment, but they didn't record qualifying the, the type of deferment prior to 2013.

So as part of this payment count adjustment, they're going to count the exact number of payments in an economic hardship deferment since 2013, plus the number of deferments of the monthly deferments that bar was in prior to 2013 for any deferment other than an in school or grace period after graduation.

So, so who is ultimately eligible here?

So, i it's borrowers who have the old uh ffel loans, the Federal Family Education loan program, also known as the Guaranteed student loan program, those loans.

Uh, the, the loan servicers that made the, uh, the lenders that made those loans, uh, stopped making them on uh July 1 of 2010.

So these are borrowers who've had loans for at least 14 years.

Um, it's also loans uh in the federal Perkins loan program, the last uh New Perkins loan was made in 2017.

So these are older loans that are probably been in repayment for a long time.

And if they get the benefit of the payment count adjustment and they refinance them by consolidating them into a Federal Direct Consolidation loan, they may have already met, met the requirements for forgiveness because I mean, if you've been in repayment for at least 14 years and some of these borrowers will have been repayment for 20 or 25 years and therefore qualify for the forgiveness.

Certainly, you know, it's really interesting, especially with the landscape right now where you've got households trying to best figure out how they can navigate inflation, which is essentially become uh some type of, you know, self deprecating punch line at this juncture.

Uh but it's still very much reality in many categories.

And then on the other side, you have the Biden administration continuing to make sure that it can try and put efforts out there to attack debt or student loans.

And so I, I guess how do you kind of pair these things against one another and, and where there has been success in what the Biden administration can actually make some meaningful headway on versus what's out of their control and is more on the fed's docket.

Well, there are two types, general types of forgiveness.

President Bon has forgiven more federal student loans using existing mechanisms than any previous president that includes the total and permanent disability discharge, public service loan forgiveness, the closed school discharge, and certain other uh forgiveness and discharge programs.

And he made those programs more efficient through government data matches such as or the disability discharge comparing us Department of Education's loan database against the veteran administration or dod database to identify service members who had a uh were discharged with a 100% disabling service related condition which qualifies to have their student loans forgiven.

The other approach that he's been pursuing is to implement broad student loan forgiveness through waiver authorities.

His first attempt was through the waiver authority in the Heroes Act of 2003, that was ultimately blocked by the US Supreme court last year on June 30th of 2023.

They passed a ruling saying that this was not allowed under the major questions doctrine and uh other aspects of the law.

Now with his plan B, he is trying to use the waiver authority in the Higher Education Act in 1965 to provide a collection of targeted loan forgiveness programs.

But those targeted loan forgiveness programs while not necessarily explicitly authorized by the statute also um would forgive about all part of the student loans of about two thirds of our is it really targeted when you have such a broad impact.

I expect that that will probably be blocked by the US Supreme Court under similar grounds as the previous attempt, then there is the safe repayment plan which is already partially in effect and will go into full effect.

This July 1st, that is a new income driven repayment plan that replaces the repay plan.

Uh and it's cuts the monthly payment for undergraduate borrowers in half.

And in addition to a forgiving remaining debt after 20 or 25 years, if the borrower started off with less debt, say under $12,000 of debt, uh the forgiveness occurs after 10 years and each additional $1000 of debt adds a year.

So $14,000 of debt would be 12 years.

Ok, Mark.

Thanks so much for taking the time to break this all down for us.

Mark Kranitz student loan expert.

Very clearly here a lot for viewers to take in and make sure that they meet that key deadline here.

Mark.

Thanks so much for taking the time.

Thank you.