When I became a financial advisor one thing that surprised me was how often financial regulations changed. While there are certain principles that hold true, planning opportunities do evolve as the regulations and environment changes There are a few things going on now that I wanted to highlight.
Fed raising rates. What does this mean? This is an oversimplification but the central bank raises rates which ultimately flows through to higher rates at your local bank. Higher interest rates at your local bank means people are less excited to borrow money. Less borrowing means less “business” is happening. This could help combat inflation (which is the goal) but also could reduce our economic output. CNBC's notice of the recent increase.
SECURE 2.0 is in the legal process. This bill is not yet law but has an important impact on retirement savings. For example- The Required Minimum Distribution year would gradually increase to age 75. Your employer could allow employer matching contributions to be made as Roth contributions. The Saver’s Credit could be expanded. See this article for more possible changes (article dated 4/6/22).
Student loan changes. The Public Service Loan Forgiveness (PSLF) waiver has already been in place for several months. An IDR waiver was just announced in April. Both of these waivers could dramatically expand who is eligible for forgiveness. Also, now the discussion of more broad forgiveness has popped up again. The forgiveness would likely be limited by both amount and a borrower’s income but we don't know what will happen yet. Student Loan Planner discusses the IDR waiver here.
Last but not least, I would love to bring attention to Mother’s Day in appreciation of both my wonderful mother in Colorado and my wife. She has been rocking the challenge of going from one to two.
Thank you for reading!