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IN THIS ISSUE: Social Security funding, saving for emergencies, and your favorite links |
THE HEADLINES
Social studiesWhat’s happening: More than half of Americans who haven’t retired yet expect to rely on Social Security in retirement, yet nearly three-quarters worry they won’t receive those benefits when the time comes, per Bankrate’s recent Social Security survey.1
Here’s why: In May, Social Security trustees issued a report saying Social Security retirement benefit fund reserves—which are partly funded by payroll taxes—will run out by 2033.2 After that, the program could afford to pay only 79% of scheduled retirement benefits.3
What it means for you: The future of Social Security may be a question mark, but your retirement doesn’t have to be if you prepare for it. Fidelity suggests saving 15% of your income, including any employer contributions. Even if you have a workplace retirement plan, like a
401(k), you can also have an individual retirement account (IRA) to put aside even more. Get
8 ways to snowball your retirement savings. |
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Fun(d) timesWhat’s happening: Congress has until December 20 to pass a bill to fund the federal government for the 2025 fiscal year or face a shutdown. There’s no deal yet.
Here’s why: The government can’t function without funding, and lawmakers are struggling to agree on how to spend Uncle Sam’s money (they punted the decision earlier this year). Disaster relief and IRS and Social Security Administration funding are all up for discussion.
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Congress also faces a January 1 deadline for raising the federal government’s debt ceiling, aka how much money the US can borrow.
What it means for you: Congress will likely decide on a continuing resolution, aka a temporary spending bill that will keep the government chugging along and avoid a shutdown until March 2025 or sooner. Got your own spending on your mind for the new year? Learn how to budget in 7 simple steps to help reach your goals faster. |
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Rainy day readyWhat’s happening: Fidelity’s 2025 Financial Resolutions study revealed nearly 80% of Americans are planning to build up their emergency savings in the new year.4
Here’s why: This year was tough for many. More than 70% of respondents reported experiencing a financial setback in 2024, and nearly half were forced to dip into emergency savings over the last year to handle those setbacks, according to the survey.
What it means for you: Having emergency savings could better help you deal with the unexpected. If you haven’t started yet, first set aside a $1,000 cash buffer. Then work up to saving 3 to 6 months’ worth of expenses using these tips to help build up your savings. |
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TOOL SCHOOLWhat it does: Gives you step-by-step guidance to see if you can save on taxes through
tax-loss harvesting. That’s when you sell investments that are down to offset realized investment gains (as in, investments you sold for a profit and may be taxed on) with those losses. The end result: Less of your money goes to taxes and more may stay invested and working for you.
How it works: If you have a taxable Fidelity account with net realized capital gains and unrealized losses (investments that dropped in value that you haven’t sold), the tool can show your capital gains across taxable accounts, identify losses, and sell investments that can help you save on taxes. One note: You can't use the loss on the sale to offset gains or reduce taxable income if you replace those investments with substantially similar ones within 30 days before or 30 days after the date of the sale. This is called a
wash sale.
Good to know: To put investment losses to good use, you'll need to harvest your losses before December 31. |
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STREET SMART
Santa Claus rallyWill Saint Nick be good to investors? The S&P 5005 has often risen during the last 5 trading days of the year and first 2 in the new year, leading to this jolly name. The bump could be because investors feel merry, are investing their holiday bonuses, or are buying ahead of the “January effect”—the belief that stock prices spike that month. Need more motivation to consider investing? Here are
6 reasons to get started. |
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HOW TO
Get some restSmart Money editors are taking a break. We hope you can too. Look out for our next newsletter—with some money moves for 2025—on January 7. Unlock 20+ clever money-saving tips in the meantime. |
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QUICK QIn a poll last week, you said crypto was an investing topic you wanted to know more about. That’s why we’re answering:
How do I actually invest in crypto?If you’re comfortable with crypto’s risks and have decided it’s right for you, there are 3 main ways to gain exposure.
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Purchasing crypto directly: The most straightforward option is to buy the coins you’re interested in via a traditional investment platform or crypto exchange. Buying crypto directly may give you complete ownership over your coins, but it may also require a complex security management process. Learn
how to store crypto safely.
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Purchasing crypto Exchange-Traded Products or crypto related Exchange-Traded Funds:
Crypto Exchange-Traded Products (ETPs) give you exposure to a cryptocurrency’s value without needing to actually buy the coin yourself. These products are for investors with a high risk tolerance but who don't want to buy crypto directly. However, note that ETPs hold cryptocurrencies as their underlying asset, which are highly volatile and could become illiquid. Investors could lose their entire investment. Crypto-related Exchange-Traded Funds (ETFs) track the broader crypto industry. Investors may find these options more convenient than buying crypto directly, but note that they also come with unique risks and some level of management fees.
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Purchasing crypto stocks: You can buy individual stocks of companies in the crypto industry too. Examples include crypto exchanges, bitcoin mining companies, and banks that provide solutions for crypto companies. Stocks allow investors to gain exposure to crypto companies, but don't give you ownership of cryptocurrencies.
Go deeper on your crypto investing options. |
