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How Will Inflation Impact Your 2023 COLA Increase?

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The Social Security Administration (SSA) recently announced the highest cost-of-living adjustment (COLA) for beneficiaries in 40 years. The 8.7% increase, which takes effect on January 1, 2023, increases the average Social Security retirement benefit amount by $146 per month, from $1,681 in 2022 to $1,827 in 2023. At the same time, the standard monthly premium for Medicare Part B enrollees will decrease by $5.20 a month to $164.90 from $170.10 in 2022.

Cost of living adjustments, which are tied to the Consumer Price Index (CPI), are calculated annually based on the average rate of inflation in the third quarter of the year. While not guaranteed, annual adjustments are meant to provide inflation protection to help people maintain their standard of living in retirement. A larger monthly payment is certainly welcome news for retirees, whose purchasing power has been diminished by rising inflation this year. However, for many struggling to make ends meet, the combination of increased benefits and lower Medicare costs may still fall short. That’s because retires are often disproportionately impacted by price increases in areas where they spend the most, such as food, healthcare, energy (gas/utilities) and housing, which can strain retiree budgets.

Skyrocketing food prices are a good example. For the 12 months ending October 2022, the Consumer Price Index (CPI) all items index increased 7.7% percent. While that was the smallest 12-month increase since January, the food index increased 10.9% year-over-year for October—more than three percentage points higher than the average rate of inflation.

Historically, when food prices rise, they tend to remain elevated. There are many reasons for this from rising input costs for labor, shipping, energy and manufacturing which puts pressure on traditionally thin profit margins, to the impact of drought in recent years on crop yields and cattle prices. The war in Ukraine has also played a role by disrupting the global energy supply as well as exports of wheat and sunflower oil. Another reason why we may not see a significant drop in food prices once inflation begins to wane is that food manufacturers and retailers count on consumers to become accustomed to paying more and adjusting their budgets accordingly. That includes direct price hikes as well as “shrinkflation,” which occurs when package sizes and quantities shrink simultaneously. One of the most dramatic examples of this is breakfast cereal. Not only have leading manufacturers reduced the number of ounces per box, but if the boxes become any narrower in width, they’ll no longer be able to stand up on their own.

Healthcare is another area that can adversely impact retiree budgets, even when inflation is low. As I discussed in a recent article, What You Don’t Know About Medicare Can Cost You, healthcare remains one of the largest expenses people face in retirement. Even small cost increases can take a toll since they tend to have a compounding effect over time. For instance, when Medicare Part B premiums rose to $170.10 per month in 2022, from $148.50 in 2021, that increased the cost basis for future adjustments. Even though Part B premiums will decrease by $5.20 per month in 2023, beneficiaries will still pay $16.40 more per month than they did in 2021.

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Take steps now to protect the value of your Social Security benefit

Whether you’re in or nearing retirement, it’s important to take steps now to make the most of your Social Security benefit. Consider the following to get started.

If you’re retired and currently receiving Social Security benefits:

  • Keep a close eye on taxes. Due to income thresholds that haven’t changed since Congress established them in 1984, a growing number of people pay taxes on their Social Security benefits each year. You’ll be taxed on up to 50% of your benefits if your income (defined as your adjusted gross income plus nontaxable interest income plus half of your Social Security benefits) is $25,000 to $34,000 for an individual or $32,000 to $44,000 for a married couple filing jointly. Up to 85% of your benefits may be taxed if your income is more than $34,000 (individual) or $44,000 (couple). Your tax professional and financial advisor can work together to determine ways to help you manage taxes on Social Security and other income sources in retirement. To learn more, download our complimentary Social Security Taxation Worksheet.
  • Review your retirement portfolio and income strategy regularly with your financial advisor, especially when economic conditions change to ensure you’re still on track toward your goals.
  • Maintain a budget. Your budget is an important tool for keeping spending in check throughout your years in retirement. It can alert you to areas where you may be overspending and help you find ways to make temporary cuts when inflation or your personal needs dictate.
  • Have a plan. If you don’t have a comprehensive plan for managing income in retirement, it’s not too late to meet with an experienced wealth advisor to put one in place. A tax-efficient withdrawal strategy can help you manage your tax exposure along with other retirement risk factors, such as market volatility, healthcare costs and longevity. It will help you identify which sources of income to draw down on and in what order. For example, as noted above, because you are never taxed on more than 85% of your Social Security benefits, for most people, it makes sense to use this income to pay for current living expenses before tapping into longer-term assets which may be subject to market fluctuations and higher tax rates upon withdrawal.

If you’re still working:

  • Stay up to date on changes that impact your income from work. In 2023, the amount of wage income that is subject to Social Security taxation will increase from $147,000 in 2022 to $160,200 in 2023. This increase is the largest in the history of the program and is due to the increase in average wages in the U.S. As a result, many workers will pay Social Security payroll taxes on a larger portion of income in 2023. Anything you make above the wage base is not subject to Social Security taxation.
  • Review your Social Security statement annually and notify the SSA immediately if you detect errors or gaps in your earnings record. Your earnings history is a critical part of the formula used to determine your future benefit. The window to report and correct any errors is relatively short, so time is of the essence. You can access your annual statement online at my Social Security.
  • Determine your Social Security claiming strategy well in advance of retirement. This can be hard to do on your own. Many factors go into determining the right strategy for you, including the age you begin receiving benefits, your marital status, your other sources of income in retirement and whether you plan to continue working while receiving benefits. An experienced financial advisor can help you cut through the complexity to align your claiming strategy with your lifestyle needs, goals and timeline. If you don’t have a plan for how you will derive income in retirement, now is the time to put one in place. Your plan can address important questions that will help provide the confidence that your lifestyle goals can be supported throughout your lifetime.
  • Be aware of the earnings limit. If you’re still working and receiving Social Security, and you have not reached your full retirement age (FRA), $1 in benefits will be withheld for every $2 in earnings you make above the earnings limit. That limit increases to $21,240 in earnings in 2023, up from $19,560 in 2022. If you reach your FRA in 2023, the income limit goes to $56,520 per year for the months prior to attaining your FRA. $1 in benefits will be withheld for every $3 in earnings above this limit. After you reach your FRA, income limits no longer apply and the SSA will recalculate your benefit amount to give you credit for any benefits that were reduced or withheld due to excess earnings.

Social Security is an important benefit that most Americans rely on to provide all or a portion of their income in retirement. How much you will receive monthly depends on many factors, including your work history, marital status and the age you begin taking benefits. To learn more about making the most of your benefit, download our complimentary checklist: When Should I Start Claiming Social Security?

Entrepreneurship

Bitcoin ATM – Learn More About Quick Change Cash to Cryptocurrency

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Cryptocurrencies such as Bitcoins have become a global currency. They are well-known globally and more popular than traditional money, for example American Dollar.

Bitcoin ATM

This article will tell more about Bitcoin ATMS with zero commissions, how to change crypto to cash in a short time or how to find the most beneficial Bitcoin ATMs.

  1. Bitcoin ATM with 0% commission
  2. Bitcoin ATM can change cash on several cryptocurrencies
  3. How to change cash on cryptocurrency?
  4. Where to learn about bitcoin ATMs?
  5. Is it safe to use Bitcoin ATMs?
  6. What are the Bitcoin ATMs locations?
  7. What are the opening hours of Bitcoin ATMs?
  8. Where can you find some information on exchange rates?
  9. Where can you find some more information on Bitcoin ATMs?

Bitcoin ATM with 0% commission

When you want to buy and sell bitcoin you do not have to pay an additional fee in your area like many different bitcoin ATMs charge (even 8%). Every bitcoin ATM provides transactions with 0% commission. What is more, the clients can get various discounts and enjoy higher exchange rates.

Bitcoin ATM can change cash on several cryptocurrencies

Although Bitcoin is the most recognizable cryptocurrency in the world, there are also other cryptocurrencies worth mentioning. What is more, they are also available in the bitcoin ATM. They are the following: Tether (USDT), Litecoin (LTC), Tron (TRX) and Ether (ETH). The whole process – it means converting cash to your favourite cryptocurrency lasts a few minutes.

It is very intuitive and every user can change cash to crypto without any problems.

How to change cash on cryptocurrency?

It is very simple to use the Bitcoin ATM. It is similar to withdrawing money from a standard ATM. The first thing you have to do is to insert cash and then scan qr code. Next, you have to select the transaction details (exchange rate and transaction fee) and finally the cryptocurrency is transferred to your wallet.

It is childishly easy to use the bitcoin ATM. As an outcome, it is also popular in Ukraine where the war with Russia takes place.

Where to learn about bitcoin ATMs?

If you want to get some relevant knowledge on bitcoin ATM and how to buy and sell bitcoin and litecoin you should visit the official social media of bitcoin ATM. There is a tutorial for beginners who have never tried the bitcoin ATM and want to know what bitcoin ATMs are.

The popular social media where you can find the information are You tube and Facebook. Furthermore, it is worth watching it regularly to learn more about special offers or unique discounts for anonymous bitcoin buyers and sellers.

Is it safe to use Bitcoin ATMs?

The clients should feel safe during converting cash to cryptocurrency. That is why, the bitcoin ATMs are located in public places, mainly in the shopping malls where the advance monitoring system is provided. What is more, it is also possible to change cash to cryptocurrencies in independent places. However, in those places the doors are locked and the person who is doing the transaction can feel safe.

Bitcoin ATM
photo credit: Sharon Hahn Darlin / Flickr

What are the Bitcoin ATMs locations?

If you need to change cash to cryptocurrency, you have to see the bitcoin ATM map. There you can find all bitcoin ATMs in your area. What is more, you can get some interesting details about the bitcoin ATM. There is provided the name of the city with a detailed address as well as additional information on the bitcoin ATM. Moreover, you can find there also a picture of the bitcoin ATM and available funds to withdraw at the moment.

What are the opening hours of Bitcoin ATMs?

If you are in Madrid, the capital city of Spain you can check the opening hours of Bitcoin ATMs Madrid online. At the same website where you can check the location of a bitcoin ATM, there is some information about opening hours. The majority of bitcoin ATMs are open 24 hours, 7 days a week and they are available in the shopping malls or independent places. However, some of them are available in limited time.

That is why, it is always worth checking the opening hours before you visit the bitcoin ATM.

Where can you find some information on exchange rates?

The exchange rate is the crucial information when it comes to converting cash to cryptocurrencies. However, it is not a problem when you use the bitcoin ATMs. At the website where the detailed address and opening hours are provided you can also find some information about the current exchange rate.

It is worth selecting the place that offers the best exchange rate before you leave your house.

Where can you find some more information on Bitcoin ATMs?

Before you make a transaction at a bitcoin ATM, you should learn more about the bitcoin ATMs. You can do it at the official website of the device or at one of the YouTube channels where the latest information and detailed tutorial are provided.

You should also visit Facebook and Instagram where the latest news is updated and find out that there are more and more bitcoin ATMs in your location.

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Finance

The Future Of Economic And Workforce Development

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Our economic attention currently is fixed on national policy, with growing risks from a debt limit deadlock and debates over inflation versus recession. But economic prosperity also depends on state, regional, and local policy, and now there’s a free guide to some of the best thinking in the field in the newest edition of the Economic Development Quarterly (EDQ).

EDQ is a leading journal overseen by the W.E. Upjohn Institute for Employment Research. It brings together practitioners and scholars through “supporting evidence-based economic development and workforce development policy, programs, and practice in the United States.” (I’m a member of the editorial board, and also a contributor to this new issue.).

The new issue asked experts associated with the journal “what are the key research and policy questions facing economic development and workforce development today?” In order to reach a broad audience, including policy makers, academics, journalists, and the public, the issue is free for a limited time.

There are 15 articles in the issue, and their range and excellence make it impossible to summarize them. Some focus on companies and firms, including how entrepreneurs can be included in economic development, what policies and programs are most effective in supporting businesses and job creation. Other analyze how public economic development and workforce professionals in the field can be most effective in our complex and tangled systems.

Several articles examine changing workforce dynamics. How can policy engage with macro trends like globalization, high housing costs, and changes in commuting and working from home? Can greater inclusion for the workforce be part of an effective economic development strategy? What would economic development look like if it paid more attention to environmental, racial equity, and family and household issues?

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My contribution draws on my new book, Unequal Cities: Overcoming Anti-Urban Bias to Reduce Inequality in the United States. The book outlines how America depends on cities for innovation, growth, and productivity, but also how our political systems—regional, state, and national—are biased against cities.

That pervasive bias holds down both regional and national productivity and growth. And it perpetuates racially stratified inequality in jobs, economic growth, housing, and education.

Wealthy (and predominantly white) suburbs capture the lion’s share of urban economic growth while not paying their fair share of the costs. That ongoing and structural racial bias is perpetuated over time by our public policies and fragmented metropolitan governments. This in turn makes it very hard for cities to address these problems on their own.

I argue that hyper-mathematized models in urban economics divert energy from more empirical engagement on our economic and workforce problems. We need multi-disciplinary analysis of policy, with special attention to how seemingly neutral policies generate racial and other forms of inequality. And we must recognize how our metropolitan fragmentation and segregation hold back shared economic prosperity.

Although there’s a wide range of policy viewpoints in the EDQ issue, all of the authors use research and analysis to help improve the places where we live. That distinguishes this work from much of mainstream urban economics, which is skeptical of place-based policies. Standard urban economics favors individually-based approaches emphasizing education and skills, and encouraging mobility by companies and people.

Of course, education and skill development are essential components of sound policy, and several of the EDQ articles suggest how to improve it. But in the real economy, experts like those at the Economic Policy Institute show our policy bias towards individualized and company-focused approaches hasn’t led to shared prosperity.

Instead, as watchdog analysts like Good Jobs First point out, we far too often see wasted tax subsidies going to firms that don’t need them, without good jobs and other benefits that were promised in return for the tax breaks. Public education mirrors the unequal fragmentation of regional governments, with suburbs creating better education from their higher property tax bases and wealth while core cities struggle to generate adequate educational funding.

So if you’re interested in economic and workforce development, national and regional and city prosperity, and how equity and growth can be combined in public policy, get your free issue of Economic Development Quarterly. I’m proud to be in such distinguished company, and there’s a lot to learn from them.

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Finance

What To Expect From Altria’s Q4?

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Altria (NYSE: MO) is scheduled to report its Q4 2022 results on Thursday, January 26. We expect MO stock to see little movement, with its revenue and earnings aligning with the street expectations. Although the company should continue to see a decline in cigarette volume, given the declining market and higher inflation, pricing growth will likely help offset the revenue loss from volume. While we expect little movement in MO stock based on its Q4 results, it has more room for growth from a valuation perspective, as discussed below. Our interactive dashboard analysis of Altria Earnings Preview has additional details.

(1) Revenues expected to align with the consensus estimates

  • Trefis estimates Altria’s Q4 2022 revenues to be around $5.2 billion, reflecting a low single-digit y-o-y rise and in line with the $5.2 billion consensus estimate.
  • Altria sells its tobacco products in the U.S. Revenue is generated from selling cigarettes, oral tobacco, and smokeless products.
  • While the company is expected to see continued pricing growth, lower volume/mix will likely weigh on its top-line growth.
  • Looking at Q3 2022, the company reported net revenue of $5.4 billion, marking a 2% decline over the prior-year quarter.
  • The decline in revenue can be attributed to lower cigarette volume (down 9%) and the sale of its wine business in October 2021.
  • Our dashboard on Altria Revenues has details on the company’s segments.

(2) EPS likely to be in line with the consensus estimates

  • Altria’s Q4 2022 adjusted earnings per share (EPS) is expected to be $1.17 per Trefis analysis, aligning with the consensus estimate. This compares with the $1.07 figure the company reported in the prior-year quarter.
  • The company’s net income of $2.3 billion in Q3 2022 reflected a modest rise from the $2.3 billion figure seen in the prior-year quarter due to a 90 bps y-o-y rise in operating margin to 58.9%.
  • For the full-year 2023, we expect the adjusted EPS to be higher at $5.11 compared to the EPS of $4.61 in 2021 and an estimated $4.83 in 2022.

(3) MO stock looks like it has some more room for growth

  • We estimate Altria’s Valuation to be around $52 per share, which is 16% above the current market price of $45.
  • At its current levels, MO stock is trading at a little under 9x forward EPS estimate of $5.11 in 2023, compared to the last three-year average of about 10x, implying that it has some room for growth.
  • If the company reports upbeat Q4 results and provides a 2023 outlook better than the street estimates, the P/E multiple will likely be revised upward, resulting in higher levels for MO stock.

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While MO stock looks like it has some room for growth, it is helpful to see how Altria’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Furthermore, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised at how counter-intuitive the stock valuation is for Ecolab vs. Philip Morris.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Invest with Trefis Market-Beating Portfolios

See all Trefis Price Estimates

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