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Starting in 2025, investors aged 60 to 63 can make catch-up contributions of up to $11,250, allowing a total deferral of $34,750, a 14% increase from 2024. The 401(k) contribution limit will rise to $70,000, benefiting older workers aiming to enhance retirement savings. Despite these changes, many American workers remain behind in retirement planning, with only 14% maxing out their 401(k) contributions in 2023.
Yields on cash remain competitive as the Federal Reserve lowers interest rates, with high-yield savings accounts and CDs still outpacing inflation. Experts advise maintaining emergency savings of six months to a year’s worth of expenses, while also considering investments in stocks for long-term growth. Investors should evaluate their cash holdings and consider dollar-cost averaging to mitigate market timing risks.
A recent report reveals that 27% of Americans are engaging in "doom spending," driven by anxieties over the presidential election and economic concerns. This trend is particularly pronounced among younger generations, with 39% of millennials and 37% of Gen Zers participating. As credit card debt rises, especially among these demographics, experts warn that such spending habits could lead to long-term financial challenges.
"Slow shopping" is gaining traction this holiday season, with 73% of consumers adopting a more mindful approach to avoid impulse purchases. This trend encourages shoppers to take their time, track prices, and save for big-ticket items, ultimately leading to better financial decisions. As spending is expected to rise to nearly $1 trillion, planning and budgeting are crucial to avoid debt, especially with many still carrying balances from last year.
Inflation is disproportionately impacting lower-income households, with only 18% of those earning under $50,000 feeling they can afford holiday spending. In contrast, 52% of those making $100,000 or more believe they can easily manage holiday expenses, reflecting a growing income disparity. About 20% of Americans anticipate going into debt for holiday celebrations, with many still grappling with previous holiday debt.
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