Money Management

A new survey from Jerry (getjerry.com) offers expert advice on how and when to shop for cheaper car insurance in 2024. Read on to learn more. [[{“value”:”

The cost of car ownership has been one of the most painful parts of high inflation in the past few years, with rising car insurance costs partly to blame. Car insurance costs rose 20% in 2023, and are up 43% in the past three years through December 2023. Car repair costs increased 10.3% in 2023, helping to drive up the price of insurance.

Higher car insurance premiums are causing many Americans to cut back on their budgets for “fun money” and even for food. A new survey from car app Jerry (getjerry.com) found that 58% of American car drivers are cutting their spending on restaurants, clothing, and groceries to make up for the rising cost of car ownership.

Is there any hope for car insurance customers? Will car insurance premiums get more affordable in 2024, or are high costs here to stay?

Let’s look at a few findings from the Jerry 2024 State of the American Driver Report, and see how car insurance customers can get the best deal on your next policy.

1. Car insurance rate hikes are not slowing down

Josh Damico, VP of Insurance Operations at Jerry, predicts that car insurance premiums still have room to climb in 2024. “The upward trend will continue this year but it’s too early to tell exactly how high it could go,” Damico said.

If your insurance keeps getting more expensive in 2024, one strategy could be to raise your deductible or cancel non-essential coverages. Other drivers are making the same move. The Jerry 2024 State of the American Driver Report found that many American car owners have been forced to compromise on insurance coverage to try to lower their premiums. In fact, 22% of American drivers bought less car insurance coverage than they wanted in 2023, including 39% of Generation Z drivers.

2. Beware of your next auto insurance policy renewal

If your car insurance premiums went up in 2023, take a deep breath. You might have to pay even more when your auto policy renews in 2024 and you receive notice from your insurance company about your new (higher) car insurance premium.

In case you didn’t notice last year’s rate hike, or it was a manageable amount that fits easily into your budget, you might have sticker shock this year. Jerry’s Damico believes that May-July of 2024 will be a breaking point for frustrated auto insurance customers who suddenly decide to shop for price quotes.

“By mid-2024, insurers will be ready to grow and many car owners will see large renewal increases hit, due to the rising cost of doing business for insurers,” Damico said. “This dynamic is expected to cause record levels of shopping around and switching insurers.”

3. Want cheaper car insurance? Start shopping for price quotes

One surprising finding from the Jerry survey was that, despite painful price hikes for auto insurance, most Americans are not trying to find a better deal. Only 38% of drivers attempted to shop around for auto insurance price quotes in 2023 — fewer than those who cut back on restaurants and groceries.

Keep in mind that just because your auto insurance company is raising your premiums, that doesn’t mean you are helpless. You don’t have to just sit back and accept that higher cost of car insurance. You have choices. Shopping for auto insurance price quotes could open up some surprisingly cheap car insurance deals. And don’t be too quick to raise your deductible or cut your coverage — that can set you up for financial disaster, just like Mayhem from Allstate tried to warn us about.

Bottom line

Car insurance has gotten shockingly expensive in the past few years, and it’s becoming a major source of pain for people’s personal finances. But you don’t have to stop buying groceries or give up all your fun in life. Mid-2024 could be a perfect time for customers to shop around, with car insurance companies eager to compete for your business.

Get auto insurance price quotes and try to find a better deal. Talk to insurance companies about the full picture of your insurance needs, such as bundling home and auto coverage. You might also want to consider a “usage-based” insurance policy that rewards safe drivers, like State Farm Drive Safe & SaveTM. But whatever you do, don’t just take the first offer you get from your current insurance provider. Switching car insurance companies might be your best option to get cheaper car insurance in 2024.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Curious to see what Americans have in their 401(k)s? Read on to find out. [[{“value”:”

Saving for retirement is important, because if you end up having to live on Social Security alone, you could end up taking a serious pay cut. And there’s some good news on the retirement savings front — 401(k) plan balances grew in 2023.

As of the fourth quarter of the year, the average 401(k) balance was $118,600, according to data from Fidelity. By comparison, the average IRA (individual retirement account) balance was $116,600.

Now to be fair, one thing that may have fueled 401(k) growth late in 2023 was a period of stock market gains. But it could also be that workers contributed more to their savings. Either way, if you’d like to see your 401(k) balance increase, here are a few key things you can do.

1. Snag your full employer match

Fidelity reports that as of the end of 2023, 78% of 401(k) plan participants were contributing at a high enough rate to secure their full employer match. If you want your balance to grow, try to do the same. Not only does that give you free money for your retirement, but you can invest your employer matching dollars to grow that sum into a larger one over time.

Let’s say your employer is willing to put $3,000 into your 401(k) this year. And let’s assume your 401(k) returns an average 10% over the next 40 years, since that’s in line with the stock market’s average return. This means that in four decades, the $3,000 your employer gave you will be worth almost $136,000.

2. Boost your income with a side job

Inflation is still lingering, so you may be struggling to carve out money for your 401(k). If so, look to the gig economy for a side hustle and earmark your earnings for your retirement plan.

You don’t necessarily have to push yourself to earn an extra $8,000 or $10,000 a year. That’s tough! But try to earn enough so you can contribute to your 401(k) at a rate that gives you your employer match in full.

As far as finding a gig goes, you have many choices. It’ll help to first find out what match you’re entitled to so you can set a monthly income goal and then find a suitable job to meet it.

3. Move your money out of a target date fund

With a retirement account you open yourself at a brokerage firm, you have a much wider choice of investments than with a 401(k). But many 401(k) plans are set to default to a target date fund. What this means is that if you don’t choose investments for your 401(k), your money will land in one of these funds automatically.

Target date funds adjust your risk profile so that when the milestone you’re saving for — in this case, retirement — is farther away, your money will be invested more aggressively. As retirement nears, your holdings will be shifted into more stable assets.

But target date funds often err on the side of investing conservatively. So if your 401(k) didn’t grow a ton last year despite a strong market, consider moving your money into an index fund or mutual fund instead. Just be aware that of the two, you’ll generally be looking at much lower investment fees with an index fund.

If your 401(k) balance is lower than the average, don’t panic. It may be that you’re younger than the average participant and have therefore had less time to actually save. But it does pay to employ these tips to see your balance take off.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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One group of politicians say the Capital One/Discover deal will hurt consumers. Other insiders say it could be good for low income groups. Find out why. [[{“value”:”

The dust has settled a little after the momentous announcement that Capital One will acquire Discover. The deal still needs regulatory approval, which is by no means a certainty. If it goes through, it will change more than just the services offered by the two banks. The merger could shake up the country’s entire card payment network.

If you’re wondering whether the merger is good or bad for consumers, there are strong views on both sides. Join me as we head into the land of ifs, buts, and maybes to learn about what the merger might mean for you.

1. Customers may get even better perks

Discover and Capital One both boast a mix of credit cards with top-notch benefits. Discover® credit card benefits include competitive rewards and no-fee commitment. Capital One’s credit card benefits include outstanding travel perks as well as a broad range of products to suit different needs. Some analysts think bringing the two companies together could give customers the best of both worlds.

Credit cards aside, both companies offer a range of banking services. Both offer competitive high-interest savings accounts, so we can’t expect much to change there. Capital One may incorporate Discover’s wider range of CDs. And combining Capital One’s physical branches with Discover’s fully online banking system might also be a win-win for consumers.

2. It could increase fees and credit card interest rates

Senator Elizabeth Warren and 12 members of Congress have written to regulators urging them to block the merger. The group believes that bringing together two major credit card issuers would create a “colossus” that would be bad for consumers. The fear is that consolidation will lead to higher fees, higher APRs, and less access to credit.

Recent research from the Consumer Financial Protection Bureau shows that the gap between the rates charged by credit card companies and the base rate has never been higher. It also estimates this gap cost the average American over $250 last year. If Warren is right, concentrating banking power even more could see rates climb even higher.

3. It could mean more options for lower earners

Contrary to the concerns of the Congress representatives, PYMTS argues the merger could be good for consumers, particularly those with limited funds. The company, which specializes in data insights on payment platforms, argues that the unification of the two companies would create a banking giant with “particular expertise in serving the paycheck-to-paycheck consumer.” It says consumers in lower income brackets would get access to a wider range of products because of the deal.

4. It could shake up the U.S. credit card networks

Right now, Visa and Mastercard are the dominant credit card networks in the U.S. They process the lion’s share of payments — and take the majority of fees when they do so. The other two players (American Express and Discover) lag a long way behind, which means there’s not a lot of competition.

Richard Fairbank, Capital One’s CEO, says the merger will mean investment to grow Discover’s payment network. He said together the two companies will “create significant value for consumers, small businesses, merchants, and shareholders as technology continues to transform the payments and banking marketplace.”

In plain English? Stronger competition within the payment marketplace could translate to lower costs for consumers and businesses.

Picking the right credit card

Ultimately, the Capital One/Discover deal is going to take a while to play out. Capital One says it hopes to get the regulatory approvals in late 2024 or early 2025. That’s assuming the deal gets the green light at all. But if you’re looking for a better credit card, you don’t need to wait until then.

In terms of credit cards, check your credit score so you can focus on cards you are likely to qualify for. Then think about what type of card will work best for you. For example:

If you regularly carry a balance: Look for a low interest rate credit card, or even one with an introductory 0% interest rate on balance transfers.If your credit score isn’t where you’d like it to be: Look for a card that’s aimed at building your score, such as a secured credit card.If you thrive on credit card rewards: Look for a card that pays the highest rewards in the categories you spend most in. You might consider adding more than one rewards credit card to your wallet to score the most bonuses.If you travel often: Look for a credit card that does not charge fees on foreign transactions. A good travel credit card will also offer travel-related perks, such as lounge access or generous rewards on flights and hotel bookings.

Bottom line

It isn’t clear whether the Capital One/Discover merger will be good for consumers, if indeed it gets approved by financial regulators. In the meantime, you can score lower fees and better credit card perks by shopping around for the best card or banking product.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Visa. The Motley Fool recommends Discover Financial Services and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

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Opening a Roth IRA in 2024? See why increasing your Roth contributions could be the best investment you ever make. [[{“value”:”

It’s still “only” March, but it’s not too early to make some smart moves to maximize your retirement savings in 2024. If you qualify based on your income, you can save thousands of dollars in a Roth IRA this year. A Roth IRA is one of the best ways to save for the future because it gives you tax-free withdrawals in retirement.

Let’s look at a few reasons why you should increase your Roth IRA contributions in 2024.

Opening a Roth IRA is a great way to save for the future

Opening a Roth IRA gives you special advantages in saving for the future. A traditional IRA or 401(k) gives you a tax break on the money you put into the account, but eventually you have to pay taxes on the money you take out in retirement. A Roth IRA is different. With a Roth IRA, you won’t get a tax deduction on the money you put into the account in 2024, but your money can be taken out tax-free when you retire.

Roth IRA rules also give you flexible ways to save for other financial goals, not just retirement. You can take out your Roth IRA contributions at any time for any reason, tax-free and penalty-free. And if your Roth IRA has been open for at least five years, you can use some Roth IRA money (contributions and earnings) for a first-time home purchase, medical expenses, and other qualifying reasons.

The IRS allows you to put more cash into a Roth IRA in 2024

For 2024, the IRS has raised the limits on how much money you can put into a Roth IRA. The contribution limits for 2024 are $7,000 for all IRAs (traditional and Roth combined), with an extra $1,000 catch-up contribution allowed for people age 50 and over.

For example, if you’re 40 years old, you can contribute up to $7,000 to a Roth IRA (and $0 to a traditional IRA) for 2024. That’s about $583 per month. If you want to get some tax deductions, you could also put some money into a traditional IRA, such as $2,000 into a traditional IRA, and $5,000 into a Roth. But your total contributions cannot add up to more than $7,000 for 2024.

And keep in mind: You can make contributions to your Roth IRA for 2024 right up until the April 2025 deadline for filing 2024 taxes. This gives you flexibility to make year-end money moves and maximize your tax-advantaged retirement accounts for every year.

Note of caution: Not everyone is allowed to use a Roth IRA. There are some income limits. If you’re a higher earner or have an unusual tax-filing status, you might not be eligible to put money into a Roth IRA.

For 2024, the income limits to qualify to make a full Roth IRA contribution ($7,000 for people under age 50) are:

Single filers and heads of household: Income must be less than $146,000Married filing jointly: Income must be less than $230,000

People who are married filing separately are not allowed to make any Roth IRA contributions if their income is $10,000 or higher.

See how your money can grow with a Roth IRA

Let’s say you’re 35 years old and married filing jointly, with a combined income of $120,000. For 2024, you and your spouse are both allowed to contribute $7,000 to two separate Roth IRA accounts. That makes a total of $14,000 for 2024.

Let’s assume you can contribute $14,000 per year to Roth IRAs for the next 30 years. And let’s say that you invest your Roth IRA money in a diversified portfolio of stocks and bonds that generates an average return of 8% per year. After 30 years, you’d have $1.7 million saved for retirement — tax-free.

Bottom line

Opening a Roth IRA can be one of the best ways to save for the future, especially if you’re just getting started in your career. If you already have a Roth IRA with a brokerage firm, consider putting more money into it for 2024. If you qualify based on your income and filing status, the IRS will let you contribute $7,000 to a Roth IRA this year, or $8,000 for people age 50 and over. Long-term tax free growth and tax-free income in retirement can make a Roth IRA your best investment ever.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Want to buy a car in 2024? Here’s why you should consider a new or used electric vehicle (or plug-in hybrid) that qualifies for EV tax credits. [[{“value”:”

Looking to buy a new car in 2024? One good way to reduce your cost of car ownership is to get a big discount when buying a vehicle. Some of the best discounts can be found on electric vehicles, with the federal government’s EV tax credits.

EV tax credits give you an immediate discount of up to $7,500 on a new electric vehicle, or up to $4,000 on a pre-owned EV. Worried about how to apply? Don’t be — the process is easier than ever before. You don’t have to “apply” for EV tax credits, you just have to buy a qualifying vehicle and get your EV tax credit discount at the car dealership.

Let’s look at how to apply for EV tax credits, and how this program can help you save big money on buying a new (or used) car in 2024.

Step 1: Decide which electric vehicle you want to buy

Before you go to a car dealership or start shopping for an electric vehicle online, find out which EVs qualify for the tax credits. Start by going to FuelEconomy.gov to check out the full list of new EVs that can get tax credits. There’s also a separate page on FuelEconomy.gov that shows a full list of qualifying pre-owned EVs.

Keep in mind that fully-electric vehicles like Teslas are not the only cars that can get EV tax credits. Some new and used plug-in hybrid electric vehicles (PHEVs) and fuel cell vehicles can also qualify. Here are a few examples (according to FuelEconomy.gov as of March 1, 2024).

New vehicles eligible for $7,500 EV tax credits

Cadillac LyriqChevrolet Bolt EV and EUVChrysler Pacifica Plug-in HybridFord F-150 Lightning (Extended Range and Standard Range Battery)Tesla Model 3 PerformanceTesla Model X Long-RangeTesla Model Y (All-Wheel Drive, Performance, and Rear-Wheel Drive)

Pre-owned vehicles eligible for up to $4,000 of used EV tax credits

The pre-owned EV tax credit is 30% of the used car’s sale price, up to $4,000. To get this tax credit, you must buy a car that is at least two model years older than the current year, with a sale price of $25,000 or less.

Here are a few qualifying used EVs and plug-in hybrids eligible for used EV tax credits, with model years shown:

Ford Escape Plug-in Hybrid (2020-2022)Ford Mustang Mach-E (2021-2022)Hyundai Ioniq 5 (2022)Mercedes-Benz EQB SUV (2022)Mitsubishi Outlander Plug-in Hybrid (2018-2022)Nissan Leaf (2011-2022)Toyota Prius Prime Plug-in Hybrid (2017-2022)

New EV tax credits are limited to mostly American car companies, or cars made in America. But if you buy a used EV or plug-in hybrid, you can get used EV tax credits on a much wider range of foreign car companies and lots of interesting car models.

To search for the full list of qualifying makes, models, and model years eligible for EV tax credits, check out FuelEconomy.gov.

Step 2: Make sure your income qualifies for EV tax credits

Before you get too excited about buying an electric vehicle, make sure your income qualifies for the EV tax credits. That’s right: there are income limits.

To get EV tax credits on a new vehicle, your modified adjusted gross income (AGI) must be:

$150,000 or less for single filers$225,000 or less for heads of household$300,000 or less for married couples filing jointly

To get EV tax credits on a used vehicle, your modified AGI must be:

$75,000 or less for single filers$112,500 or less for heads of household$150,000 or less for married couples filing jointly

Good news — you can use last year’s or this year’s income to qualify for EV tax credits, whichever is less. So if your AGI was low enough in 2023 to qualify, you can buy an EV in 2024 and get tax credits, even if your 2024 income is too high.

Step 3: Go to a car dealership and buy an EV

Demand for EVs has slowed slightly in 2024, so some dealers might be willing to give you a better price than usual, especially on used electric vehicles. Once you have agreed on a purchase price, the dealership will help you get your EV tax credit.

Dealerships are required to register with the IRS to process the EV tax credits, and will help handle the paperwork. When you buy your car, you “transfer” your tax credit to the dealership, which gives you the tax credit amount as an immediate discount. For example, if you buy a new EV for $50,000 MSRP and it qualifies for the full $7,500 tax credit, the dealership paperwork will show that the actual price you paid is $42,500.

Step 4: Get the time of sale report from the dealership

The dealership will give you a time-of-sale report to keep for your records, which shows you bought a car that qualifies for tax credits. You also will need to file IRS Form 8936 with your next tax return, to show you transferred your EV tax credit to the dealership.

Bottom line

EV tax credits won’t save you money on car insurance, but they can get you a significant discount when buying a new or used electric vehicle. There are some big discounts available in 2024 on used electric vehicles. If you’re worried about EV battery range, consider a plug-in hybrid vehicle that runs on gas — no range anxiety, and you can still get tax credits. And before you get your heart set on a new car, shop around for EV car insurance quotes. The best auto insurers may be able to save you money on coverage.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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Have a 401(k) through your job? There’s one perk it pays to take advantage of. Read on to find out what it is. [[{“value”:”

There are certain benefits to saving for retirement in a 401(k) over a tax-advantaged account you open yourself with a brokerage firm. For one thing, 401(k)s have much higher contribution limits. So if you’re able to max out, you can shield more income from taxes with a 401(k) than with an IRA, assuming you’re saving in a traditional retirement account and not a Roth IRA.

Another nice thing about 401(k)s is that many of the companies that offer these plans also sponsor worker contributions to some degree. So if you put in money from your own paycheck, you could get free money for your retirement in return.

Recent data from Fidelity finds that as of the end of 2023, 78% of 401(k) plan participants were contributing enough money from their own paychecks to snag their full employer match. And that’s something you should try to do, too.

A single match could go a long way

There are no rules when it comes to employer matches for 401(k)s. It’s at your company’s discretion to decide how much of a match it wants to offer. But you should know that claiming your employer match in full could really do a world of good for your savings in the long run.

The reason? When you snag an employer match, you don’t just get a few thousand dollars in your 401(k). You also get the opportunity to invest that few thousand dollars. And that’s where the potential to grow your balance nicely really exists.

Let’s say you have your 401(k) heavily invested in stocks. To be clear, 401(k)s typically don’t allow you to buy stocks individually, but you can choose index funds or mutual funds with a stock-focused strategy.

Over the past 50 years, the stock market has returned an average of 10%, as measured by the S&P 500 index. So let’s say your employer will match up to $2,500 in employee contributions, and you put in enough this year to get that match in full. Let’s also assume your 401(k) is invested in S&P 500 index funds that provide a 10% return. In 35 years, your company’s $2,500 match will be worth over $70,000.

Of course, to get that $2,500 from your employer, you need to put in $2,500 yourself. But that $5,000 in contributions this year could be worth about $140,500 in 35 years if you’re able to score a 10% return on your investments. Considering that the average 401(k) balance was $118,600 at the end of 2023, that’s a nice result to attain from just a single year’s contribution.

Don’t give up free money

It’s not every day that you’re offered an opportunity to get your hands on free money. So if your company has a 401(k) match you can snag, try to do so.

You may need to make a few lifestyle changes to free up money for your 401(k). That could mean taking a more low-key vacation instead of splurging on a high-end resort, or paying for fewer extras during the year, like takeout meals and non-work apparel. But as you can see, snagging your employer match could lead to a more robust nest egg over time. So it really is worth making some reasonable sacrifices.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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