The Borrow Smart Chronicles - Big Look at Mortgages and Housing

Sometimes life events feel like arrows… and I’ve had a lot of them the last four weeks… this isn’t my best work, but it’s the work I can do now, so hopefully you find some joy, or learning, or questions in these newsletters.

Rate cuts all over the place, but this looks promising…

My favorite scene from the Olympics… this one stays on my desktop!

a BORROW SMART CONCEPT
Retirement Changes Happen

Several key changes are happening to retirement rules in 2024, primarily due to the SECURE 2.0 Act, which was designed to enhance retirement savings and simplify retirement plan regulations. Here’s a summary of the most significant changes:

1. Required Minimum Distributions (RMDs):

   • Starting Age Adjustment: The age at which you must start taking RMDs has increased to 73. This gives retirees more time to keep their money in tax-deferred accounts before needing to withdraw.

   • RMDs Eliminated for Roth 401(k)s: Starting in 2024, Roth 401(k) accounts will no longer be subject to RMDs, aligning them with Roth IRAs, which have never required RMDs.

2. Catch-Up Contributions:

   • Higher Limits for Certain Ages: For those aged 60-63, catch-up contribution limits will increase to the greater of $10,000 or 150% of the regular catch-up amount starting in 2025. For now, 2024 catch-up contributions remain as they are but will shift in 2025.

   • Roth Contributions for High Earners: If you earn over $145,000, any catch-up contributions you make to a 401(k) will need to be made to a Roth account, meaning they will be after-tax contributions.

3. Emergency Withdrawals:

   • Penalty-Free Emergency Withdrawals: In 2024, you can take a penalty-free withdrawal of up to $1,000 from your retirement account for emergency expenses. You can only take this withdrawal once per year and will need to repay it within a certain time frame to avoid restrictions on future emergency withdrawals.

4. Student Loan Matching:

   • Employer Contributions for Student Loans: Employers can now match student loan repayments with contributions to a retirement plan, helping employees build retirement savings even while paying off student debt.

5. Social Security and Medicare:

   • Social Security Increase: Social Security benefits are seeing a 3.2% cost-of-living adjustment (COLA) in 2024.

   • Medicare Premiums: Medicare Part B premiums are rising by 6%, from $164.90 to $174.70 per month.

These changes are part of a broader effort to make retirement savings more flexible and accessible, particularly for those nearing retirement age or facing financial challenges. It’s important to stay informed about these updates to optimize your retirement strategy. If you are like 98.2% of homeowners you have substantial equity in your house that might help you make a bigger commitment to retirement via these changes.

For more detailed information, you can visit the sources directly, such as Kiplinger, AARP, and Davis Wealth Management​ (Kiplinger.com)​ (Thrivent.com)​ (AARP)​ (Davis Wealth Management -). Summary assist by ChatGPT40…

LIABILITIES and DEBT
What’s Happening.

Goldman Real Estate / Mortgage Charts

8% of all mortgages have rates higher than today’s rates:

98.2% of all properties with a mortgage have positive equity:

Relative to income, current debts are low relative to higher overall income:

Less than ½% of all mortgages are in foreclosure:

It is more affordable right now to rent than buy:

Because overall affordability right now is at all time lows:

Interest rates are starting to drop, but homebuyers haven’t responded yet:

However, mortgage refinancers are getting moving because there overall debt and interest rates (blended rates) are much higher than current rates:

Many will use their household wealth to invest, or pay down other debts:

REAL ESTATE
What’s Happening?

ASSETS and INCOME
What’s Happening?

Looking at your phone Monday, versus looking out the window at your 401(k) last week?

ON BEING HUMAN
What’s Worth Sharing?

An interesting writer, thought provoking for those looking for something deeper: https://hotelconcierge.tumblr.com/post/162571849189/the-tower

DOPAMEMES
And Other Happy Moments…

Artificial Intelligence
And the Future of Work…

Prompt Idea (adapted from The Daily Prompt

[I need to create a structured professional development guide on how to be more persuasive on the phone. Browse the web for resources and organize them into a comprehensive guide. The guide should include sections on recommended courses, essential skills to develop, useful certifications, and practical tips for becoming a better Phone Communicator. Print the full URL to resources. Ensure each section includes a brief explanation and links to the sources used.]

Using Generative AI IRL…

Borrow Smart University || National Institute of Financial Education