Stay informed on the latest tax news and developments, including legislation and rule changes, for effective tax planning and compliance.
Six Student Loan Forgiveness Updates to Keep an Eye On As 2024 Begin
As 2024 begins, student loan forgiveness remains a key focus. Despite setbacks, the Biden administration has implemented relief, with over $100 billion in debt cancellation approved. Notably, the Direct loan consolidation deadline was extended to April 30, 2024, benefiting borrowers pursuing forgiveness under the IDR Account Adjustment.
Ongoing initiatives include relief for medically disabled borrowers and those defrauded by schools, totaling $132 billion. A new forgiveness plan is in development, targeting specific borrower categories, but concerns about eligibility persist. Regulations may be finalized in May, with potential implementation in 2024 or later.
Administrative forbearances, a result of repayment system challenges, are set to end in early 2024, possibly affecting credit toward forgiveness. The SAVE plan, introduced last fall, offers affordable repayment options, including interest cancellation and quicker forgiveness for eligible borrowers starting in July.
Temporary relief initiatives, Fresh Start and the on-ramp program, will continue through September 2024, aiding those in default or transitioning from the student loan pause. Student loan forgiveness developments in 2024 are crucial for borrowers navigating evolving programs and regulations.
Why Are Social Security and Retirement Plans Important in 2024?
In 2021, Social Security constituted 41.6% of the average retiree's income ($50,780), up from 41.5% in 2022, as per a smartasset.com survey. Some cities, especially in the Midwest, rely more on Social Security, reaching up to 50% of retirement income, while California cities are less dependent. Cities like Nashville, Lincoln, and Charlotte are experiencing a rising 65+ population, with increased reliance on Social Security due to inflation. When considering retirement relocation, it's crucial to assess the local cost of living beyond taxes and housing, considering factors like long-term care. Planning for retirement involves automatic contributions to a 401(k), taking advantage of employer matching, and starting personal retirement plans like SEP-IRA, Roth IRA, or a self-401(k).
How to Make Your Financial Plan Tighter in 2024
The upcoming presidential election makes it a crucial year, especially for retirement planning. A Betterment at Work report reveals that only 40% of workers are confident in their retirement savings, with 30% tapping into their retirement funds for short-term expenses. To prepare for retirement, prioritize paying off high-interest debt due to rising inflation. Use auto-contribution and auto-escalation features to ensure consistent savings. Create a vision board for retirement goals, specifying financial details and lifestyle preferences. Focus on saving for short, mid, and long-term expenses. Lastly, establish a three-month salary emergency cash savings account for financial security.
In 2024, the Fed is predicted to lower interest rates. Here's how investors can get ready
With the possibility of three interest rate cuts in 2024, investors can prepare by understanding potential market shifts. While falling rates usually benefit stocks, a repeat of 2023's stellar performance is unlikely. Investors should avoid buying stocks with expectations of continuous growth. Cash investments benefited from rising rates, but savers may want to lock in CD rates before they fall. Bonds, hit during the rate-hiking cycle, may rebound with falling rates, especially longer-term options. Real estate investment trusts (REITs) are likely to thrive, benefiting from lower borrowing costs. Diversification is crucial for wise investment decisions.
