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Top tips for retirement, travel, paying your mortgage: Wealth!

On today's episode of Wealth!, Host Brad Smith breaks down key personal finance tips, from mortgage rate hacks to saving for retirement and planning your summer vacation.

Home prices in the 20 largest US cities have surged by an average of 7.2% year over year, according to recent Case-Shiller data. Structured Finance Association CEO Michael Bright advises homebuyers to "shop around" and build relationships with brokers to potentially "get a loan at a lower rate than you otherwise would."

Yahoo Finance's Personal Finance Editor Molly Moorhead also emphasizes the impact of making just one extra mortgage payment each year in saving homeowners money in the long run.

US Consumer confidence declined in June, with the index falling to 100.4, signaling growing economic concerns among American consumers. As cost-conscious consumers increasingly seek deals, McDonald's (MCD) has joined the ranks of fast food chains adapting to economic pressures by introducing a new value meal option. Starting June 25, the global fast food giant will add a $5 value meal to its menu.

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Citi Senior Global Economist Robert Sockin explains that despite these value meals, "the bigger problem is that you've had large gains in food prices over this cycle. And really, it's taking time for people to adjust to these much higher prices. And as I've noted, as we've got income gains that real purchasing power has improved and is likely to continue to improve given that food inflation is still running at relatively low levels. "

59% of employees who are not saving for retirement believe they are, according to Principal Financial Group. IRAHelp.com Founder and CPA Ed Slott explains why now is a great time to save for retirement:

"Everybody thinks inflation is bad, and I get that because things cost more. But when it comes to taxes, inflation is great because tax brackets expand too. So more money can come out at lower rates. And the other opportunity now is the low rates... We have historic low tax rates now. So the key to anybody saving for retirement is if you have an IRA, a 401(k), remember those accounts are loaded with taxes. The only way you can get to that money is by paying taxes. So if you can get that money out now, because I'm worried about future higher taxes, we have debt limits, the laws may be changing, so anybody stockpiling money in an IRA or 401(k) should be taking action."

Finally, as the summer travel season heats up, Yahoo Finance's Kerry Hannon breaks down how you can still find a deal. She believes the key to summer travel is being flexible: "If you can travel the last two weeks of August, that's going to be a good time. And it gives you time to book it right now and get some of the best advantages of that time gap in order to nail down some of these good rates."

She notes that skipping popular destinations is also preferable, explaining, "Hotel prices are up about 10% particularly in the crowded cities. So I encourage people, maybe skip Paris, go to Lyon, skip Dublin, go to Cork."

This post was written by Melanie Riehl

Video transcript

Welcome to wealth everyone.

I'm Brad Smith and this is Yahoo Finance's guide to building your financial footprint.

Our community of experts will give you the resources, tools, tips and tricks that you need to grow your money.

Hey, on today's show, new housing data shows a deceleration in the upward trend of home prices will give you tips to attain the best mortgage rate for your purchase decision.

Plus getting retirement ready.

There are five important changes this year that affect your nest egg.

We'll talk to an expert who will give you and dive into the changes and reveal how you need to prepare.

Plus it's summertime and you're probably scrolling through social media looking at 10 different friends as European vacations.

Well, it's not too late for you too.

We'll talk to a travel expert who can give you the hacks to save time and money this summer.

All that and much more coming up throughout today's show.

But first and foremost, as we mentioned, we've got some new housing data out today.

According to the case Schiller index, the leading measure to help calculate housing prices in the US home prices in the 20 biggest cities rose 77.2% annually in April.

There's some good news and bad news there.

The bad news, the housing prices have never been more expensive.

The good news is that rate increase is actually slowed down from March.

Our next guest argues that one way to deal with high prices along with high mortgage rates is to consider securitized loans when purchasing a home here and for more, we welcome in Michael Bright Structured Finance Association, Ceo Michael.

Great to see you here in studio.

This time place is great.

I'm coming here every time.

This is absolutely, we, we'd love to have you back any time.

All right.

So first and foremost, as people are trying to digest the latest housing data that's come out this morning, you're continuing to make the case here for securitized loans for some of those potential buyers out there.

Why is that?

Well, um securitization is actually something that happens in the back end.

So, uh as a customer may or may not even know whether your loan is on a bank balance sheet or it goes into a bond or security.

But chances are pretty good that it's gonna end up in a bond and security.

That is why rates you can get a 30 year fixed rate loan.

If you are in a country that only has banks, for example, like Europe and Asia, you mostly can get variable rate loans.

They're not 30 year fixed rate and they're much higher than where they are in the United States.

What I would say to a borrower to, to a consumer looking to buy a loan is, you know, use a broker agent.

Usually your realtor will have a relationship, they will shop for various options and you'll probably get, um, a loan at a lower rate than you otherwise would.

Um, then they're gonna tell you who your servicer is and just work with that servicer and that's the relationship you'll form over the course of being a homeowner.

How much of a difference are we talking about in the loan that you could get?

Well, it, it's difficult to know.

Exactly.

But I, I mean, I think if we had a country that didn't have any securitization whatsoever, um, interest rates would be, you know, two points higher, 200 basis points at least higher.

So, uh, right now we're looking at mortgage rates around 77 and eighth.

Um, which is, there's a psychological effect just because for so many years, the Federal Reserve have been suppressing those rates and keeping them at around 3 3.5%.

A lot of people are looking at the 7% and saying, oh, my gosh, I gotta wait for rates to come down before I can buy a home.

That isn't something I would advise.

I think 7% is still quite low by historical average.

And if we didn't have, you know, the bond market facilitating this.

You could be in the 9 10% range.

What are some tips for those who are out there trying to reduce their mortgage as well right now reduce their mortgage debt or just reducing their mortgage debt trying to figure out where lower mortgages are are sometimes available due to securitization or or you know, even what their down payment consideration should look like.

Yeah, it's um we we have a very liquid market um for down payments, you know, we don't, you don't need 20% down.

You can get what's called mortgage insurance if you have less than 10 20% down.

So you shouldn't be of the view that if you don't have 20% down, you're, you're locked out of the market when you're making a, a home purchase.

It really needs to be the right thing for you for the long term.

So my advice to any prospective borrower or buyer would be, do you wanna live in this home?

Is it right for you?

Is it right for your family over the course of, let's say five years at least.

Um, if that's the case, then go ahead and buy, don't worry about the interest rate.

They're still low by historical standard.

If you're just speculative buying, that's something I do not advise.

I think that it's a dangerous place and that's gotten us in trouble in the past.

I just wanna, and by getting your estimation or, or your kind of crystal ball outlook on where prices might continue to move when we, we were just diving into the, the case schiller home prices, deceleration, um, that was marked in this most recent reading, at least.

Do you think that'll continue here?

Well, I I'm sorry to say that.

I hope so because, you know, even though I'm a homeowner, I really don't want houses to continue to be unaffordable for so many Americans And we are at historic unaffordability levels.

And really the the reason for that is supply shortage.

So we don't have enough affordable housing supply.

This is mostly state local level.

There's a lot of regulation that limit how much affordable housing supply can be built.

There's a national effort right now to fix this, but it is a slow moving train.

Um I hope over the next 5 to 10 years, we're gonna be building more housing supply and that will alleviate some of this problem.

But right now, there are just more people who want to own homes than there are homes available.

Michael Bright, who's the Structured Finance Association ceo joining us here?

Thanks so much, Michael.

Thank you very much.

All right, bye bye.

Well, with home prices at highs and mortgage rates just under 7%.

How can homeowners pay their loans off faster than that 30 year loan life?

Joining me now with one key tip to help you pay down your mortgage faster.

We've got our very own personal finance editor Molly Moorhead.

Hey, Molly.

Hi, Brad.

My tip.

Is this one extra payment a year?

You can do this by uh saving up all year and paying extra pay, making that extra payment.

In December.

You can do it by paying a little over 12 months extra.

You can make biweekly payments that will save money.

Uh but this will take years off the loan.

You'll build equity faster and you'll save a ton of money in interest and so you can save on interest.

But how much are we talking about in that savings on interest?

Uh So 1st, 1st thing is like, let's say you take out $300,000 mortgage, 7% fixed rate over 30 years.

You're gonna take with that one extra payment a year, you're gonna take six years off the life of the loan and save almost $100,000 in interest.

That's, you know, a college education.

Yeah.

Oh, absolutely.

So, is there any reason then not to make an extra payment a year?

I would say if you're one of those people who locked in a really low rate, um, then you might consider, am I saving enough for retirement?

Do I have enough in emergency savings because you could potentially earn more on that money than you could save in interest on your mortgage if that makes sense?

So, uh you know, if you have a two or 3% mortgage, that might be a calculation if you've bought in the last couple of years at these high rates, do it if you can afford to do it, make that extra payment a year.

It's just gonna pay off so much.

And so 11 monthly cost included in many mortgage payments that that home buyers may not be aware of is PM I or private mortgage insurance.

I I mean, what what is this break this down for us?

A little bit PM I is one of those costs that's just so annoying to pay every month because it's an insurance policy that protects your lender if you default on your loan.

And it's typically uh sometimes it's less than $100 a month, sometimes it's a few $100 a month.

Um and it will be canceled automatically when after the first few years of your loan, when you get to 78% loan to value ratio.

And that's a technical term, but it's basically what you owe versus what your home is worth you.

It'll be canceled automatically but you can cancel it early.

That's the pro move is to stop paying it as soon as you can and you can do that by getting uh a new appraisal.

You can do it by refinancing paying your mortgage faster like we just talked about just any, you know, there's moves you can make to just stop making this payment that's not helping you at all.

And so it sounds like it's possible to remove that payment.

I mean, what is the most straightforward way to go about removing it then?

So, uh, two things I would say when you can, you can just write to your lender and ask to have it removed when you get to about 80% just back of napkin just hits and uh, and if you, and you know, you need to show that you're in good standing, you're current on your payments, all that.

Um And then, but then the other thing that a lot of people are doing, I did this myself is um home value, home values are increasing really quickly right now.

And so you if you get a new appraisal and you can show your lender my home has appreciated this quickly.

I'm already at that loan to value ratio, then you could get it canceled and save, you know, it's not a college education, but it's a gym membership if it's 100 bucks a month, you know.

Absolutely.

Thanks so much molly breaking this down, key important information for some people to know out there.

Appreciate it.

Thanks Brian consumer confidence, sticked lower in June.

As Americans say elevated prices, especially for food and groceries weighed on their views of the economy.

Our own.

Jennifer Schonberger asked Treasury Secretary Janet Yellen in an exclusive interview about the inflation that we're seeing in grocery prices.

And here's what she had to say.

Well, I think largely reflects cost increases including labor cost increases that um firms, um grocery firms have experienced although there may be some increases in margins.

Um uh earlier today, um I met with a group of CEO S including the CEO of Target and um they explained and they've announced that uh they understand that households are struggling with uh costs including food costs and they've um undertaken um cuts in the price of bread, milk, uh diapers, other um core purchases that are necessities for households.

And I think that's to be applauded.

I think it's that kind of thing is helpful.

So the treasury secretary there saying which company she was speaking with, but our company is doing enough to help fight inflation.

Joining me now we've got Robert Sin, who is the city senior global economist there.

Robert, great to speak with you and, and get your perspective on this.

Our company is doing enough to help fight inflation.

Thanks.

Uh Thanks so much for having me.

And uh it's, it's a real challenge as you noted.

Uh If you look at the consumer confidence numbers that you highlighted, um people are feeling uh these uh price changes that we've had over the last uh several years.

And even though food inflation is now running at relatively low levels, uh you still had an enormous increase over this cycle.

Um And so the cumulative gain has been very high and people are seeing that at the stores, I think right now um you know, one positive thing is that um income has been growing as well.

And so as income has been growing and food inflation has cooled that real sort of purchasing power of food ha has improved.

Um And then two, as you noted, some companies are taking action to sort of help with these uh food issues.

Uh Secretary Yellen mentioned Target, you're also seeing some uh fast food chains starting to offer better value meals, um that could also aid uh in this in this issue.

But it's a big problem for Americans.

It's particularly a large problem for lower income households which have more of their budget geared towards um towards food.

I think in particular, they're feeling the strain from these, from these price increases we've had over the last few years.

How effective do you think that value meals will be, as we've seen even more of them rolled out recently in trying to make sure that consumers are able to have an option to offset some of those higher prices, I think, uh you know, especially, um uh if you see more adoption of these types of policies, it would be, it would be helpful.

Um But as you said, in a broader sense, the bigger problem is uh that um uh you've had large gains in, in food prices over the cycle and really it's taking time uh for people to adjust to these much higher prices.

And as I've noted, as we've gotten income gains that real purchasing power has improved and it's likely continue to improve given that food inflation is still running at relatively low levels.

So I do expect that the problem will feel less burdensome over time.

Uh But hopefully we will see more policies like we've seen from Target and these other uh fast food chains because I do think again, we're seeing the most strain is in lower income households and those types of policies I think would really help uh alleviate um the pinch that people are feeling at the grocery store and when they go out to eat.

Yeah, one of the other elements within this conference, uh consumer conference uh reading was on the six month moving average basis, purchasing plans for homes largely unchanged remained historically low in June and home prices hitting new highs according to the latest case schiller data.

So this all compounded our our own.

Jennifer Schonberger actually asked Treasury Secretary Janet Yellen about the work President Biden is doing to address housing affordability.

I wanna play the clip for you and get your response.

On the other side, I don't wanna say that there's a silver bullet.

Um I think we look to Congress to do much more.

Uh President Biden has proposed a program that would lead to the construction of 2 million um new housing units which um it it would really make a sizable dent in the problem that we face.

So is enough being done to help make housing more affordable.

I think this is another big challenge.

If you think about the two things um that people uh probably care most about when it comes to prices.

It's probably the the price of food and it's the price price of housing.

And we have seen in this cycle, a really challenging dynamic where demand for housing has softened from where it was earlier in the cycle as the FED has hiked interest rates.

Um but supply has been very low and so that combination of still ok, demand and very low supply um has led to uh pick up, pick up in housing prices and very poor uh affordability.

So I think what really has to happen is sort of twofold.

One more housing supply will need to come on to the the market to bring the market into better balance.

Uh I think probably as the FED starts to ease up on interest rates, uh you're gonna see more supply flood the market and that should help with some of that imbalance in affordability.

And the second factor as you noted is uh there's a policy uh element here more can be done uh in terms of affordable housing.

Um I know there's an exploration in many cities about what to do with excess office space.

If some of that can be converted into affordable housing or other types of housing to leave supply issues.

Um So um you know these issues, I think are front and center and I think more can be done on the policy side because I think going forward, even when the fed starts lower interest rates and more supply comes online, that's not going to fully alleviate the issues of affordability we're seeing.

Yeah, Robert, at this point, many of us have probably seen that viral or some of the images of a former baseball stadium that was turned into housing.

And so why couldn't we do that with some of the commercial real estate that's out there, office real estate that's just sitting at this juncture.

Um Robert, thanks so much for taking the time.

Certainly appreciate it.

City, senior global economist.

Great to see you.

Thank you.

Thanks.

Coming up on wealth, everyone taking the pulse of mom and pop shops.

We dive into the results of a survey to reveal the pressure points on small businesses that's coming up and looking for a deal for dinner.

Mickey D's the Golden Arches.

Mcdonald's is launching a $5 meal deal today.

We'll tell you what you can get.

Plus we're also going to dive into the five most important changes this year affecting your retirement.

All that and much more.

When we return a new Bank of America survey reveals small business optimism rose in May but remains below pre panic levels.

Small businesses make up 99.9% of American businesses making them an important gauge of the us economy here to dig into the results.

We have Raul Anaya who is the Bank of America president and co head of Business Banking.

Raul, great to have you on with us.

I, I think very often we forget just how large a make up of the overall business environment, small businesses are here.

And so the read in on the, in the pulse of small businesses.

How would you describe it right now?

Well, first of all, thanks for having me.

Um you know, when you think about small business, they continue to create a significant amount of jobs of the national economy.

And as our own data shows, um optimism and small business did rise in in May.

But like you said, it's still below pre pandemic levels.

Uh The other positive thing about this is again using our own internal data.

We look at the the inflow and outflow of payments within within our small business accounts which by the way have over 3.5 million small business clients and the inflow to outflow ratio, which is kind of a proxy, the profits was actually up in May at its highest level since March of 2023.

So that's a positive sign.

Ok. And so all these things considered as you're looking across what small businesses are telling you at this juncture, I mean, you're looking across the business rent inflation, even that uh exceeding that of households, I mean, walk us into some of these data points here, I mean, especially considering where small businesses are trying to offset the inputs of costs that they themselves are seeing too and having to account for.

Yeah, du during our study, we focused on two of the larger components of cost for any business, particularly small businesses and that's rent and payroll rent um continues to rise and as you mentioned, uh rent inflation for small businesses ex exceeding rent, inflation for households.

Um It's up it when you look at all the total amount of payments for small businesses through May, it, it represented about 9% of total payments.

That's significantly up compared to what it was pre pandemic levels when total rent was about 6% of payments.

So it continues to be a AAA large portion of their expense base and the amount of payments.

Uh we did see some geographical differences.

Um rent inflation for small businesses tend to be a little bit higher than the West, west region of the United States versus perhaps the South and the Southeast.

Ok. And you mentioned with regard to this is the other component of, of how much they're paying in the payroll considerations too here.

I mean, where, where has wage inflation pressure continued to either persist or where have we seen it start to perhaps decelerate a little bit for small businesses?

Yeah, look uh wages continue to be a big component for, for all businesses, particularly small businesses and there has been an easing of wage inflation and, and when you think about all the job creation that has happened, um over the last couple of quarters that has actually eased the pressure on small businesses.

Um It's still up year, over year.

Um And as you mentioned, it has decelerated over the last two years and right now through May, it's up about 2.5%.

So that's a very manageable number considering where, where it has been historically, you know, I I'd love to end this with some actionable tips perhaps for, for small businesses.

I mean, thinking about the cadence that we typically hear from some of the large enterprises who are publicly traded and they give us their assessment of the macro environment for small businesses that are also wading through a very similar macro environment.

Perhaps not at the same, but much of the same theme still holding true.

How can they best anticipate and, and best position their businesses for an environment where they're waiting the same way that consumers are for rate cuts in some instances or they're just hoping that there still continues to be resiliency on the end of the consumer.

Yeah, it's funny you mentioned that um we actually a couple of months ago, we came out with our business owner report and about 65% of our small businesses that we surveyed expect revenues to increase.

So it's still very, very positive about the same where it was a year ago for mid size business owners.

It's a different story.

Almost 90% of those mid size business owners expect revenues to increase over the next 12 months.

A couple of things, there are some concerns with inflation, with interest rates, the political environment, but but most of these businesses continue to find ways to bring efficiencies to their operations and digitizing their businesses.

Leveraging technology, leveraging digital is a key way of doing that.

Raul Anaya, who is the Bank of America president and co head of business banking.

Thanks so much for taking the time here today.

Thanks for having me.

Certainly attention.

All shoppers savers, coupon cutters.

Amazon has announced the dates for its 10th prime day event and we wanna tell you everything that you need to know to save a little money here.

Now, prime day, it's gonna take place on July 16th and 17th and prime members will get deals across 35 categories like electronics, kitchen, beauty, and apparel.

Prime itself costs 100 39 bucks a year and you'll need it to take advantage of these deals.

Now, some deals are already available and here's a glimpse of what you can get right now.

Prime members who haven't tried Amazon music Unlimited, you can get five months for free.

You can also get access to shows, movies and channels on prime video up to 50% off and of course, it wouldn't be prime day without sales on Amazon's own devices.

Right now, you can get what the company says is its lowest price ever for certain ring doorbells, blink devices, TV, S and Kindle scribe among other things.

Now, June 26th through July 5th prime members can also get coupons when they shop at Amazon fresh physical stores.

And for all the summer travelers out there, there are offers for up to 40% off of select trips with carnival cruise line.

We've got even more of a dive on some of those travel hacks for you later on.

But that is for the savvy shoppers out there.

All right guys coming up another big deal mcdonald's mcdonald's has a new value meal for just five bucks.

We'll tell you more.

On the other side of the short break, consumer confidence levels are down slightly this month as Americans continue to show some unease about the state of the economy.

This according to the consumer boards of the conference board's monthly numbers for more.

Let's bring in our own Michelle Auo who's got the full breakdown on the conference board's consumer confidence reading Michelle.

Great to see you.

Good to see you too, Brad.

So as you mentioned there, the consumer confidence for June did come in lower than expected at 100.4.

That's down from May but roughly in line with expectations.

Now, the index actually reflects a number of factors that go into how consumers feel about current economic conditions also future economic expectations, looking at about six months to a year out.

Also their personal financial situation and employment conditions in keeping or finding work and income as well.

Income expectations.

Now, future economic expectations are often weighted the heaviest in this index, which is why we did see some retreat there.

Now, as we look at the present situation index, that's based on consumers assessment of current business and labor market conditions.

Now that actually increased to 100 and 41.5 and the expectations index that's based on consumers short term outlook as I mentioned there, that's for income, business and the labor market conditions that fell to 73.

So you really have this balance of people feeling a bit better.

Now, we sort of keeping an eye on the expectations down the road and those sort of balancing each other out.

Now, Dana M Peterson, the chief economist at the conference board who regularly comes on Yahoo Finance, she said that consumers expressed mixed feelings this month.

Their view of the present situation improved slightly overall driven by an uptick in sentiment about the current labor market, but their assessment of current business conditions cooled.

Meanwhile, for the second month in a row, consumers were a bit less pessimistic about future labor market conditions.

However, expectations for both future income and business conditions, well that weakened weighing down the overall expectations index.

So worth keeping that in mind, Brad.

All right.

So what are some key takeaways for consumers from the latest numbers here, Michelle?

Well, it's interesting because when you sort of take a look out of the six month moving average basis confidence actually continued to be the highest among the youngest, those aged under 35 and the wealthiest those making over $100,000.

Now consumers perceive likelihood of a US recession because we know we've been looking at these recession signals for a while over the next 12 months that also pulled back in June compared to May and overall consumers were positive about the stock market as well.

Obviously, the rallies that we've been seeing this year, 48.4% expecting stock prices to increase over the year ahead versus those expecting either a decrease or really no change things to sort of stay in the same range.

Also the share of consumers expecting higher interest rates over the next 12 months, that also dropped to 52.6%.

Now, that's the lowest level since February.

Now, something interesting if you're a retailer, I know you were talking about uh Amazon prime day coming up.

Now, purchasing plans, let's break it down for homes and cars, those were largely unchanged.

But buying plans for most big ticket appliances and smartphones that actually ticked up slightly but fewer though looking to buy a laptop or a PC.

So some nuances there and something to keep in mind for portfolios if consumers are feeling less optimistic about the future.

We do tend to see consumer staples do better than discretionary items in terms of sectors as people tend to pull back here, Brad.

All right, Michelle, excellent breakdown there.

All the latest info from the conference board's consumer confidence reading.

Appreciate it, Michelle.

What we're looking for a deal on your dinner.

Mcdonald's might have you covered?

There's a new value meal at the Golden Arches and it's available starting today.

Mcdonald's one of the latest fast food chains to add value items to their menu in an effort to bring consumers back into the restaurants for more.

Let's bring in our own Brooke Dipalma.

I mean, Brooke, I remember the only lure that I needed back in the day growing up was just the, the happy place.

The, the playpen, the Happy Meal Toys, toys.

Yeah, let's push those aside.

Now mcdonald's is getting very serious is about bringing consumers back in the door, especially after the latest quarterly report.

So this $5 meal deal, it includes a mcdole or a mcchicken, a four piece chicken nugget, a small fries and a small drink.

Now, this comes after mcdonald's did have a rough first quarter.

We saw us same store sales jump slightly up 2.5% but that was less than what Wall Street had expected.

And so now it's hoping to use this $5 meal deal in order to bring consumers back in and is not alone as you mentioned, there were others doing this.

We heard from uh KFC back in April, they introduced a 499 meal Burger King also introduced that $5 your way meal.

And now mcdonald's the latest, we also had Subway Us Us President last week with those $3 dippers.

But here's how this needs to work, Brad.

In order for franchise operators to really see a return on this, we need to see increase in guest counts, more customers need to come in the door because value menus don't necessarily increase margin.

Ambassadors are also hoping that not only does this increase guest count, but then when they get consumers in the door, the consumers are actually saying, hey, I'll upgrade this or I'll get a two mcchicken or two mc doubles.

I'll add more to my items or more to my ticket as well.

All right, I guess for all the people that are out there bulking and on the value menu items, two of them do.

All right, let's also focus in here on California one mcdonald's franchise owner decided to close one location here.

This has been interesting.

So what did she say was behind this move?

Yes, this is Scott Roderick.

He said that this was necessarily a reaction to California legislation in addition to the landlord wanting rent per square foot high property taxes as well as mall charges.

So he said that because of that California Fast Act that we saw go into effect on April 1st, that increased minimum wage from 16 dollars to $20.

He said that those were one of the factors in addition to the others that I mentioned that he had to make the difficult decision to close his location in San Francisco.

Now, a franchise expert that I spoke to said, you know, this won't necessarily impact mcdonald's at large given it's just one location.

Of course, if we see multiple say hundreds, then it'll definitely hit mcdonald's.

But this does affect the way that consumers think about the healthiness of the brand.

Think about how mcdonald's is doing at large when you see your local mcdonald's clothes.

All right, Brooke Dipalma breaking down and tracking all things, the Arcos Dorados, if you will uh Golden Arches, everyone there.

That's the translation.

Thanks so much.

Appreciate it guys coming up.

We're talking about what you need to know about the changes to retirement this year and how the latest provisions might impact your wallet.

That's up next.

Stick with us.

Saving for retirement can be confusing.

59% of people who are not saving for retirement think they are according to Principal Financial Group and often times changes in the process could mean that you're losing out on some cash or benefits.

So to break down what this year's opportunities mean for you.

We've got Ed Slot, Ira help.com founder and CPA here with us in studio.

Ed is also the founder, uh Excuse me, the author of the new book, The Retirement Savings Time Bomb Ticks Ladder.

I guess it's the founder of ideas going into the book here as well.

Ed nonetheless, thanks so much for taking the time to be here.

Absolutely.

So le let's dive into some of the changes that have turned into opportunities for this year for people who are saving for retirement.

What is the top one that they need to be taking advantage?

Well, the change is the opportunities of things.

You wouldn't think of taxes and inflation.

Why is that?

Well, everybody thinks inflation is bad and I get that because things cost more.

But when it comes to taxes, inflation is great because brackets expand too tax brackets.

So more money can come out at lower rates.

And the other opportunity now is the low rates is the low rates we we have now we have historic low tax rates now.

So the key to anybody saving for retirement is if you have an IRA or 401k, remember those accounts are loaded with taxes.

The only way you can get to that money is by paying taxes.

So if you can get that money out now, because I'm worried about future higher taxes.

We have debt limits.

The laws may be changing.

So anybody stockpiling money in an IRA or 401k should be taking action.

That's what I call this retirement savings.

Time bombs louder.

It's the tax.

I call it a ticking tax time bomb.

Say that three times fast.

I, I don't wish to hear but your Ira.

So timing is everything and you talk about this in your book as well here.

I mean, everything looks different for everyone across generations and across what your actual target day funds might look like as well here.

So what is the best way to really kind of run the calculus around your own timing?

Where does the thought process need to begin?

One word?

Roth, Roth, two words, Roth Ira.

It's the best account ever created of all, not even just retirement because it grows tax free income, tax free for the rest of your life and even 10 years beyond to your beneficiaries.

So everybody knows it's the best account to have.

The only question is how much are you willing to pay to get it?

And the price you pay is the tax rate, which as I said, is very low now.

So you talk about generations.

Young people should only be doing Roth Ira s. Imagine if people my age, baby boomers ha had the opportunity to start from dollar one building a tax free retirement account.

All of their money is stuffed in taxable accounts.

So imagine if you starting a job or in a job and you, you have years, you know, young people have time on their side.

You should only be doing rath 401k s at work where your money grows and builds and accumulates absolutely tax free or rath Ira S to contribute to a 401k anymore, just for a deduction that you have to pay back at the worst possible time, years late or in retirement, not worth it anymore.

And so one of the other mechanisms that people are trying to really familiarize themselves with in the event that they are feeling philanthropic, qualified charitable distributions as well.

Here, how can this help as part of the broader strategy?

Well, that a limited population, it's a great thing to give to charity.

If you're charitably inclined, I never say give to charity to save taxes.

Because if that were drew, give all your money away, you have no taxes, nobody's doing that.

But if you're giving to charity anyway, the best dollars to give are your Ira s and they have this provision, qualified charitable distributions.

The only problem with it, it's limited.

It's only available to Ira owners who are 70 a half years old or older.

But if you're in that, in that age group and you have an Ira and you want to give to charity, that's the way to do it because you can get your money out at 0% tax rate.

What generation would you say is the best equipped or prepared for retirement because of some of the, the strategies that can be employed right now, Gen X, every generation actually, I was gonna say Gen X and the millennials, I guess that's Gen Y or whatever it is because they have time on them, on their hands.

But the parents, the baby boomers or maybe grandparents, they have substantial accounts and they could, they're in a position to do Roth conversions, get that money out at low rates.

Move to tax free territory and have more and keep more of their hard earned money and even pass it on to the, their generations.

It's at Ira help.com founder and CPA and author of the book, The Retirement Savings Time Bomb ticks louder.

Thanks so much for taking the time here with us today.

Certainly.

Oh, the places you'll go, coming up the state of travel.

We'll break down why more Americans are planning vacations and the hot destinations that they're going to.

That's coming up next.

We've been keeping an eye on the travel sector this morning.

The number of consumers planning a vacation over the next six months continued to increase, which is still above last June's level according to the conference board and shares of carnival cruise line, one of the players in that industry pushing higher on continued demand to travel.

The cruise giant posting record sales for the second quarter.

So far 2024 has been a record year for cruise operators with more consumers seeking out new experiences at affordable rates.

So for more on the sector as a whole, I'm joined by travel experts, Mark Elwood.

Mark.

Great to have you here in studio with us today.

Ok.

So we gotta break down what you would make of the travel environment this year compared to last year.

I mean, if we're just to look at a few stats, ts a travel throughput, we're already eclipsing some of those more from last year, which finally got past some of the pre pandemic records that we've seen.

I think if you take a moment and you think about May 2020 when it felt like no one was going to travel again.

The TS A numbers were at sort of 19 sixties levels.

It's quite mind blowing.

How in four years we've not just rebounded.

You're seeing rates of travel and rates cost rates way higher than 2019, which was already a record year.

And we're not really seeing any slowdown.

Even if there are headwinds in the economy, the travel business is crossing its fingers and saying, looks like we're not being affected yet because people really, really want a vacation.

Where do they want to go?

Where are they going?

Do you know what I think you're saying?

You've seen a couple of things.

I think you're seeing the greenback is still very strong, it's softened a little bit.

But currency based tourism means that the UK, where I'm from, the pound is dirt cheap at the moment.

So it's a great time to go to London.

If you want to go to Turkey, the lira is very weak and even the Euro remains quite weak.

I think you're also think seeing people think, do I go to the med in the summer?

It could be 100 degrees.

Do I want to sightsee in 100 degrees?

Heading a little further north Denmark Iceland Travel agents will tell you they're very busy this summer.

We're looking at some of the hard travel destinations this summer and a lot of these international territories that we're looking across here.

I mean, they're going to have different price ranges.

How do you see that varying across income levels right now too?

Well, look, you're always going to see there's a number of Americans with a passport is, is surprisingly small when you look at the data, especially compared to development is remarkable.

I mean, I also can't really say much admit this because I just got mine like last year or two years ago.

Yeah.

So, ok, so I think everyone means I'll do it next year.

I'll do it next year when, when there's a trip.

But you're going to see there's a lot of domestic tourism.

I I think Americans often don't realize you look at the sticker shock of a price transatlantic prices are very, very expensive but not necessarily the holistic cost of a trip.

Because remember if you're spending a lot to get somewhere where it's much cheaper when you get there, it might be cheaper than a local trip.

What are some tips for becoming a master traveler?

Ok, I feel like I'm gonna be the Yoda of travel for you right now.

Bring it.

Well, what we, what we want to talk about, we wanna talk about, about flights essentially and thinking about how to book a flight.

Have you ever heard that?

There's a magic time to book a flight?

Yes, you heard this right.

Well, I thought it was Tuesdays.

Yeah, like Tuesdays.

Tuesdays at 2 a.m. Wednesdays.

That is the zombie myth that will not die.

It is not true.

Oh, my goodness.

All right.

So I can close my tab.

Now, you wanna sign up?

There's a lot of, there's a lot of free services with paid tiers as well.

Things like going dollar flight club, they monitor flight prices for you and the way to get deals today is to sign up for them, click the routes you wanna fly and they will burp out an email to you anytime those routes are cheaper.

So you can, don't have to set the alarm clock for, am that rule is done?

Ok. Um, I would also invest in air tags, you know, losing a bag.

Maybe you're forced to check a bag at a, at a, at a gate.

If you've got an air tag in there, you can always say where it is.

Ok. Um, the, especially if you're traveling with equipment, golf clubs or skis or any of these things.

And it's interesting you'll find, I just got a new dozy suitcase and it it has a little air tag, a little air tag hanger included in it.

So you, you'll see that too.

So those would be my two big, big tips if you want to be a pro traveler, one is basically about never getting ripped off and one is never being the person.

And remember when you check a bag, use your phone, take a photograph of it before it leaves your hands because you'd be surprised how bad we are at describing things.

We think we know just lastly while we have you because uh current and be surprised with this one, Costco as the travel hack.

Do you have a Costco membership?

I know people who do so by the transit of property.

If you go to Costco's website, you will see there is a tab that you've probably never noticed and there's on all on all the warehouse clubs, you'll find the same thing.

They sell travel at discounted rates, especially if you're looking for hotels and flights together, which is great at a peak time last minute because the way the pricings work often cheaper do not count Sam's club, Costco, any of them?

All right, Mark Elwood.

Great to have you here in studio with us.

Appreciate your time talking all things travel.

I mean, it's a fun time of year to talk all this any time.

Well, an estimated 13 million Americans are expected to jet off to Europe this summer.

According to Hopper data.

Now, if you don't have travel plans this summer, it isn't too late for you to book without breaking the bank to discuss how you can still find travel this season.

Yahoo.

Finance's very own carry.

Hannon is here with us.

Hey, Carrie.

Hey, Brad, great to be here.

Um, absolutely.

It is not too late.

Um, but the, the hot areas, of course, Europe is smoking hot this year.

People are rushing to get there.

Uh, some of it's Paris, the Olympics, London so forth.

Um, but, but we're also seeing Japan is big and one reason for that is that the dollar is so strong against the yen.

So it's become sort of a bucket list list place for people to get to.

But so we see, you know, and prices are cheaper than they've been than they were last year for sure.

They've come down, gas is cheaper than it was a year ago for sure.

So we're seeing for people who are traveling domestically, you've got your gas prices down.

Airfares are great.

But again, the key to it, Brad is being flexible and, and we've heard this before, if you can travel the last two weeks of August, that's gonna be a good time and it gives you time to book it right now and get some of the best advantages of that time gap in order to get nail down some of these good rates.

So if you can do that even better, the shoulder sea season if you can wait till September, October do that by all means, set those track alerts.

You know, they're a hopper, kayak, they, um, Google flights, they'll let you know like we've heard that you said in where you're gonna go, they'll alert you for the lower prices.

It's a great way to do it.

Um, and kayak has one I think, called best time to travel.

So you say, oh, I wanna go to Geneva and they'll say, well, go in October Carrie, you know, that's a good time to go.

Prices are lower and so forth.

So that's important.

Don't forget about your loyalty points.

All of those things from hotels to airfares to credit cards and make sure your credit card is one without foreign transaction fees.

So those are really important tips.

What might be more expensive this vacation season, relative?

Two years past.

Yeah.

No, absolutely right.

The dollar is marginally weaker than it was.

So it's slightly, uh not as great as it was last year.

Hotel prices are up about 10% particularly in the crowded city.

So I encourage people maybe skip Paris, go to Lyon, you know, skip Dublin, go to Cork.

You know, if you can pick, you know, off the beaten track destinations close to where you might wanna be, but get those lower prices there.

But because you're gonna see high hotel prices in those cities, you also might see, um, you know, just a general uptick in different expenses.

Like, hey, I wanna go to the top of the Eiffel Tower.

Well, guess what?

Those have jacked up this summer.

So, is going to the Louver.

If you're in Japan and going to Mount Fuji, you're getting a, a thing.

If you're going to Venice, you're getting a charge to get into Venice.

So the entry points that, yeah, we're not talking a whole lot of money, but it can add up interesting.

Carrie, thanks so much for breaking this down.

Some of those hidden costs that people need to be aware of, especially as they're going out on those vacations that they're well earned and deserve.

Thanks so much, Karen.

Thanks everyone.

Let's do a final check of the markets with the few seconds that we have left here on wealth.

We're taking a look at the Dow Jones industrial average right now.

It's is moving lower by about 7/10 of a percent.

However, you are seeing fractional gains for the S and P 500 that index up 3/10 of percent.

And don't look now or do the NASDAQ composite right now.

It's up by about 1.2% 206 points to the upside here.

As of right now, we've got a little bit of time left, a lot of time left in today's trading session.

That's it for wealth though.

I'm Brad Smith.

Thanks so much for watching.

You can get counted down to the closing Bell with market domination with Julie Hyman and Josh Lipton that begins 3 p.m. eastern time.

You do not want to miss it.