Is Recession Coming? Watch These Signs

recession market scare crash downturn stock business men
By Andrey Burmakin /

There’s no time stamp on when recessions pop up, or how long they last. Our last recession was two months long at the onset of the COVID-19 pandemic in 2020, making it the shortest on record.

The one before that was the Great Recession starting in 2007 and lasting 18 months, the longest downturn since World War II.

If the stock market and economy are keeping you on the edge of your seat, you can look for signs of a recession before it hits. That can help you determine whether you should start preparing for a recession, and the act of getting your finances ready for a possible downturn should give you some peace of mind.

An inexact science

work worry
Stock-Asso /

Before we dive into the possible warning signs of a recession, it’s worth noting that predicting a recession is not an exact science.

So, while the following warning signs historically have served as indicators that a recession might be on the horizon, that doesn’t mean they are foolproof. The economy is dynamic, and there is no list of indicators that have preceded every past recession.

Still, the following indicators tend to be a good place to start looking if you’re worried about whether a recession lies ahead.

Sign No. 1: The yield curve inverts

Positive yield curve
hafakot /

Typically, long-term bonds pay more than short-term bonds, as illustrated above. This makes sense: If you agree to tie up your money for longer periods, you should be paid more for your trouble. This is why a five-year certificate of deposit (CD) pays more than a one-year CD.

Rarely, however, the reverse is true: Long-term bonds start paying less than short-term bonds. When that happens, a recession often follows. In fact, this situation, known as an inverted or negative yield curve, has proven a highly accurate recession predictor.

Why would long-term bonds ever pay less than short-term bonds? The nation’s central bank, the Federal Reserve — or “the Fed” for short — controls short-term rates, but the market controls the rates on longer-term securities.

The Fed can raise short-term rates, which is exactly what they started doing in March 2022, for the first time since 2018. But if investors start thinking things don’t look so good in the economy, they keep their powder dry by buying long-term bonds. The more they buy and bid up the price, the lower the rates on these securities go.

The yield curve did dip into negative territory in late March 2022. It quickly recovered, but it’s worth noting that it was the first time the yield curve turned negative since 2019 and, before that, 2006.

What to watch: You can find Treasury yields on the U.S. Treasury Department’s website. CNBC also tracks in real time the spread, or difference, between the yields on two-year and 10-year Treasurys.

Sign No. 2: The Leading Economic Index slips

Jenga game at risk of slipping
88studio /

The Conference Board’s Leading Economic Index (LEI) is one predictor of global economic health. The Conference Board, a nonprofit research group, describes the index as one of “the key elements in an early warning system to signal peaks and troughs in the global business cycle,” with the LEI specifically anticipating turning points in the business cycle.

Monthly dips in the Leading Economic Index aren’t alarming. However, year-over-year drops in the benchmark have been followed by recessions in the past.

The LEI increased by 0.3% from February to March, and by 1.9% over the six months leading up to March, so there’s no reason for concern based on this indicator right now.

What to watch: Keep an eye on Conference Board press releases or media coverage of the index.

Sign No. 3: Interest rates rise

Federal Reserve
Orhan Cam /

Government monetary policy can be another economic bellwether. We’ll explain what to watch, but first, a quick refresher on how it works.

The Federal Reserve influences the economy by using a couple of tools. One of those tools is control over short-term interest rates via the target federal funds rate. If the economy is in the doldrums, it can lower the federal funds rate to encourage consumers and businesses to borrow, buy and invest, which stimulates the economy. That’s why this rate was kept near zero for years following the Great Recession that began in December 2007.

On the other hand, if the economy is growing too fast, that can lead to rising prices, otherwise known as inflation. To cool things down, the Fed raises the federal funds rate, which serves to put the brakes on the economy by discouraging both consumers and businesses from borrowing and spending as much.

While interest rates don’t directly affect the stock market, if businesses have to pay more in interest, that hurts their profits, which will ultimately be reflected in a lower stock price.

Also, as rates rise, investors often sell stocks, driving prices lower. Why do they sell? Think about it: If you can earn high interest from insured bank accounts or guaranteed Treasury bonds, why take a chance on stocks?

Again, the Fed resumed raising the federal funds rate in March 2022, marking the first rate hike since 2018. The hike in May — a half-point — was the largest increase since 2000.

What to watch: The Federal Reserve’s Federal Open Market Committee posts statements, which include any votes to change the federal funds rate, after each of its regularly scheduled meetings. The meetings are also widely covered by the financial media.

Sign No. 4: Consumer sentiment falls

Upset shopper at a grocery store
C.Snooprock /

Another economic indicator published by the Conference Board, the Consumer Confidence Survey, monitors everything from Americans’ buying intentions and vacation plans to their expectations for inflation, stock prices and interest rates.

After an uptick in March, consumer confidence fell slightly in April. The Consumer Confidence Index was at 107.3 for the month, down from 107.6. During the recession at the beginning of the COVID-19 pandemic, the index was less than 90.

Fluctuation is normal, especially as economic conditions shift. The pandemic, the rising costs of products and the war in Ukraine can change how people feel about the economy from month to month. But if consumer confidence continues to drop, that could be a sign of a looming recession.

What to watch: The Consumer Confidence Survey is updated monthly. Track press releases for it on the Conference Board’s website. The survey is also widely covered in the media.

Sign No. 5: Business confidence cools

Upset businessman holding his head at his computer
Rido /

Like consumer confidence, business confidence can shed light on the direction of the economy.

The Conference Board’s Measure of CEO Confidence remained in positive territory — 57 — in the first quarter of 2022. (The board considers measures of more than 50 points as positive, and lower readings as negative.) But this measure marked the third consecutive quarter of decline.

CEOs’ assessment of the current general economic conditions, and their expectations for the near future, also declined.

The outlook of small-business owners isn’t any rosier, according to the National Federation of Independent Business’ Small Business Optimism Index.

In March, inflation overtook labor quality as the top problem among small businesses. In fact, the share of owners raising their average selling prices reached its highest level in the survey’s 48-year history.

Moreover, the share of owners who expect better business conditions over the next six months fell to its lowest level in the survey’s history.

What to watch: Business confidence gauges like the Measure of CEO Confidence and CFO Survey are updated quarterly. The Small Business Optimism Index is updated monthly.

Sign No. 6: Vanguard’s risk forecast worsens

Casimiro PT /

Vanguard is one of the biggest asset management firms in the world, so its economic outlooks can help paint a picture of how to monitor fluctuation in the economy.

Before the recession that started in late 2007, Vanguard’s six-month forecast had said the probability of a recession in six months was greater than 40%, according to The New York Times.

The firm’s forecast for 2022 — subtitled “Striking a better balance” — was overall optimistic, if cautiously so:

“While the economic recovery is expected to continue through 2022, the easy gains in growth from rebounding activity are behind us. We expect growth in both the U.S. and the euro area to slow down to 4% in 2022.”

In March, however, Vanguard downgraded its 2022 estimated growth for the U.S. from 4% to 3.5% — which is where it remained going into May.

What to watch: Vanguard posts its monthly market perspectives on its “Our Insights” webpage and issues press releases about its annual outlooks.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


Thinking about Rolling Your 401(k) into an IRA? 7 Deciding Factors to Consider

The Department of Labor has outlined new rules for advisers to follow when rolling over retirement plans. Whether it is a 401(k) to an IRA or an IRA from one custodian to another, there are several considerations that need to be evaluated before making a change. If you are initiating a rollover on your own, it may be beneficial for you to evaluate these items as well.

You should be able to get all the information you need on your plan from your statements, Annual Participant Fee Disclosure and Summary Plan Description. If you do not have access to these documents, you can usually request them from your human resource department.

All-In Fees and Expenses

Before deciding whether to do a rollover, you will want to compare the fees within your 401(k) plan vs. the fees for the IRA. Fees in the 401(k) could include any mutual fund loads, plan expenses and any underlying fees. Sometimes the fees may be higher in your 401(k), but there may be additional benefits to keeping your funds in the 401(k) wrapper.

It would be up to you to decide whether any benefits are worth the fees. For example, if you are opening an IRA and moving over to an investment adviser there will be additional management fees paid to your adviser, but you may also receive financial advice, retirement planning or wealth management services.

Available Services

Some retirement plans, such as 401(k)s, provide added creditor protection, the ability to take out a loan or take hardship withdrawals, which are not available with IRAs. In certain circumstances you may be able to keep some asset protection if 401(k) funds are rolled into a separate IRA and not commingled with other IRA funds. Some 401(k) providers provide investment education to participants that may be valuable if you are a younger investor.  You will also want to look at your vesting schedule and company match to determine whether they may be affected. In addition, some retirement plans offer Roth 401(k) contributions, which may not be available to you otherwise.

Available Investments and/or Products

Several 401(k)s offer participants limited investment options. On one hand, that could be viewed as a positive, because when there are too many choices it can confuse participants and make it harder to manage the plan. However, some plans’ limited options may be  more expensive, such as actively managed funds, and they might not offer any low-cost index options.

If you roll over funds into an IRA you then have access to a much wider universe of investments. That said, this should not be your only decision criteria. Some company retirement plans offer a “BrokerageLink” option, which allows you to move funds from the “core” 401(k) account to a brokerage account –  another way to access more investment options. Some plans have restrictions on what can be invested in a BrokerageLink so you would want to consult the plan document before deciding.

Guaranteed Income/or Interest Rates

Are you invested in anything earning a guaranteed interest rate that you will lose by moving from a 401(k) to an IRA or other plan? For example, TIAA CREF’s 401(k) offering has TIAA Traditional, which could be earning 3%-4% –  a great return in this environment. You may not want to roll out funds into an IRA and lose access to this option.

Tax Considerations

If you are required distribution age but still working past retirement (providing you are not an over 5% owner in the company), you can defer taking money out of your 401(k). Unfortunately, if you have an IRA on the side, that IRA is subject to required distributions at age 72, even if you continue to work. If you leave the funds in the 401(k) you can still contribute and don’t have to take money out.

One caveat related to the Roth part of a 401(k): If you are age 72 and a greater than 5% owner or retired you have to take a distribution from the Roth side. A way to get around this is to roll the Roth 401(k) balance into a Roth IRA prior to age 72.

Also, if you happen to be in a zero-income year and all you have is retirement funds and need cash, it may make sense to take a taxable distribution rather than do a rollover.

Distribution Considerations

If your 401(k) retirement account is invested in an insurance product or annuity you will want to evaluate whether there are any surrender charges. Usually annuities cannot be moved to IRAs in kind. Some annuity products may have certain benefits that will be lost if liquidated, so you will want to make sure you understand how your product works before making a decision.

Some plans may offer annuity options rather than a lump sum, which would be lost if you roll your 401(k) over to an IRA. You will want to look at the financial implications of the lump sum vs. the annuity options to see which option is better for your situation, especially if you have a spouse who can receive survivor benefits.

You will also want to check if there are any in-service distributions options or guaranteed payment options.

Beneficiary Considerations

If you are married, your 401(k) must list your spouse as beneficiary unless your spouse signs a waiver. You can list anyone on an IRA as a beneficiary, so you may want to review your estate planning and beneficiaries if you make any changes.

Senior Financial Adviser, Evensky & Katz/Foldes Financial Wealth Management

Roxanne Alexander is a senior financial adviser with Evensky & Katz/Foldes Financial handling client analysis on investments, insurance, annuities, college planning and developing investment policies. Prior to this, she was a senior vice president at Evensky & Katz working with both individual and institutional clients. She has a bachelor’s in accounting and business management from the University of the West Indies, she received an MBA at the University of Miami in finance and investments.


17 Home Upgrades That Rarely Help Close a Sale

A real estate agent posts a for sale sign in front of a brick house that is under construction
Sean Locke Photography /

We all like to think that making positive changes to a home can make it more attractive to buyers. However, some renovations that might make you feel more comfortable, actually might not help you sell your home in the long run.

The National Association of Realtors (NAR) recently released its latest Remodeling Impact Report, finding that some renovations are less effective than others in convincing buyers to move forward.

Surveying real estate agents, NAR looked at 20 types of projects and asked agents which they’d suggested homeowners do before selling a home. The survey also asked agents whether completed projects had helped close a sale.

Following are the renovations this survey identified as least likely to close a home sale. Specifically, fewer than 10% of real estate agents said these projects helped close a sale.

17. HVAC replacement

New Africa /

Surveyed real estate agents who said this project helped close a home sale: 7%

Agents who have suggested that homeowners do this project before selling: 20%

According to the National Association of Realtors report, the estimated cost of completing an HVAC replacement is about $8,200, and the cost recovered in a home sale is about $7,000. So, even though you might be able to recover much of the cost of doing the project, it’s not one that is likely to help you close the sale.

16. New wood flooring

Halfpoint /

Surveyed real estate agents who said this project helped close a home sale: 5%

Agents who have suggested that homeowners do this project before selling: 16%

The Joint Center for Housing Studies of Harvard University reported earlier this year that indoor flooring replacement is the most common upgrade, as we detail in “The 15 Most Popular Home Upgrades – and What They Cost.”

And yet, real estate agents indicate that this project is unlikely to add much to a home’s appeal to buyers.

15. Hardwood flooring refinish

Jo Ann Snover /

Surveyed real estate agents who said this project helped close a home sale: 5%

Agents who have suggested that homeowners do this project before selling: 27%

New flooring isn’t recommended by as many real estate agents as refinishing the wood flooring that’s already there, according to the NAR report.

Even though it doesn’t help much to close a home sale, the report indicates that those who invest in the project see a recovery of 100% of their investment.

14. Bathroom renovation

Susan Schmitz /

Surveyed real estate agents who said this project helped close a home sale: 4%

Agents who have suggested that homeowners do this project before selling: 33%

A third of real estate agents suggest homeowners make this change before they sell, even though this project doesn’t usually help close a sale.

Additionally, you might only see a 57% return on value when you complete a bathroom renovation, according to the NAR report.

13. New vinyl windows


Surveyed real estate agents who said this project helped close a home sale: 4%

Agents who have suggested that homeowners do this project before selling: 12%

With new vinyl windows, homeowners can expect to retain about 73.4% of the cost when they sell the home, according to Remodeling magazine’s 2019 Cost vs. Value Report. Believe it or not, that’s a relatively good cost recouping.

12. Basement conversion into living area

Artazum /

Surveyed real estate agents who said this project helped close a home sale: 2%

Agents who have suggested that homeowners do this project before selling: 5%

Only 5% of real estate agents suggested this renovation to homeowners looking to sell, and for good reason, since it doesn’t contribute much to the ability to close a home sale. However, it does offer homeowners relatively high satisfaction, as we recently reported in “19 Home Renovations That Give Owners the Most Joy.”

11. New garage door

Luxury home
karamysh /

Surveyed real estate agents who said this project helped close a home sale: 2%

Agents who have suggested that homeowners do this project before selling: 16%

While this home improvement project might not do much to help close a home sale, it can return nearly all of the cost when reselling your home.

Remodeling magazine’s 2019 Cost vs. Value Report shows that a garage door replacement retains 97.5% of its value upon resale of the home, as we report in “These 10 Home Improvements Offer the Highest Returns.”

10. Add a new bathroom

Monkey Business Images /

Surveyed real estate agents who said this project helped close a home sale: 1%

Agents who have suggested that homeowners do this project before selling: 5%

Very few real estate agents suggest this renovation, and even fewer find that it helps with closing a home sale.

It might be best to skip this one since it can cost as much as $60,000 — and only return about 50% of its cost, according to the NAR report.

9. New steel front door

Monkey Business Images /

Surveyed real estate agents who said this project helped close a home sale: 1%

Agents who have suggested that homeowners do this project before selling: 4%

While replacing your front door isn’t something that closes a home sale, it can help boost the value of your home — especially if you paint it black, as we report in “Painting With This Color Can Boost Your Home’s Sale Price by $6,000.”

Additionally, this project is likely to bring homeowners joy. The NAR report gave the project what it calls a “Joy Score” of 9.7 out of 10.

8. New vinyl siding

Red and black house
Lindasj22 /

Surveyed real estate agents who said this project helped close a home sale: 1%

Agents who have suggested that homeowners do this project before selling: 4%

While it’s not a project much-recommended ahead of selling, new vinyl siding is one of those renovations that offer a relatively high return on value. According to Remodeling magazine’s 2019 Cost vs. Value Report, the replacement of siding retains 75.6% of its value when the home is sold.

7. New wood windows

Woman with dog in house
Ahmet Naim /

Surveyed real estate agents who said this project helped close a home sale: 1%

Agents who have suggested that homeowners do this project before selling: 2%

The NAR report gave new wood windows a “Joy Score” of 9.6 out of 10, as we detail in “19 Home Renovations That Give Owners the Most Joy.” But these windows aren’t likely to help close a home sale and agents aren’t likely to recommend them as a pre-sale renovation.

6. New master suite

Nenad Aksic /

Surveyed real estate agents who said this project helped close a home sale: Less than 1%

Agents who have suggested that homeowners do this project before selling: 3%

Not only is this project unlikely to help close a home sale, it’s also unlikely to pay for itself.

Both a midrange master suite addition and an upscale master suite addition made the list in our article “The 10 Worst Home Renovations for Your Money.”

5. Attic conversion to living area

Attic bedroom /

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 2%

This project costs up to $80,000 to complete, and it returns only about 56% of the investment, the National Associations of Realtors report states.

4. Insulation upgrade

Worker insulating an attic
Bilanol /

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 4%

Even though this project isn’t one that agents say could help close home sales, the NAR reports that it offers homeowners a relatively good recovery (83%) on the money spent.

3. Closet renovation

A woman picks clothes out of her closet
New Africa /

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 4%

A closet renovation earned the highest Joy Score possible — a 10 out of 10 — in the NAR’s study.

Even if it won’t help you sell your home, you might enjoy this renovation while you still live in the home.

2. New fiberglass front door

Woman opening a door
Monkey Business Images /

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 4%

Even if you don’t close a home sale by replacing the front door, choosing the right color for that front door may add to your home’s sale price.

Plus, as with a new steel front door, a new fiberglass front door is likely to bring homeowners joy. The NAR report gave both projects a Joy Score of 9.7 out of 10.

1. New fiber-cement siding

Artazum /

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 2%

While fiber cement siding can return 76% of the cost and give homeowners satisfaction, it’s not a project that real estate agents say they find helps close a home sale.

What home renovations have you been considering? Share your thoughts in a comment below or over on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


Margin Trading vs Futures: Compared and Explained

Trading crypto on margin in the spot market is different from using futures to control crypto positions. Margin trading involves using money borrowed from a broker to go long or short crypto. With futures, traders can post margin as collateral to take on large long or short positions on contracts with a specific delivery date. Another type of crypto futures contract, perpetual futures, does not come with a delivery date, but it comes with daily fees.

It’s important for crypto investors to understand the fundamental concept of margin vs. futures. Though there are key differences between trading margin vs. futures, there are also similarities between them, and pros and cons to consider. If you recognize how futures vs. margin trading operates, then you can better decide which of these investing strategies — margin vs. futures — to use when building a cryptocurrency portfolio.

Margin vs Futures

Margin vs. futures feature many similarities, but there are also differences to consider. Analyzing both can help you know if these trading techniques could work with your investing style and tolerance for risk. You might decide to have a margin or a futures account, one of each, or neither.


Futures vs. margin trading share some characteristics. For one thing, both methods would allow you to control more of a crypto position than would trading the cash, or spot market, using only your equity. The futures market and a margin account simply go about it differently. Both might entice prospective market participants with potentially big quick gains, but losses can be dramatic too.

It is important to remember that cryptocurrencies are usually much more volatile than stock market indexes. So if you trade with margin or futures, you could expect to see fast movements (either up or down) in your profit and loss numbers.


As we said earlier, identifying the differences between trading with margin vs. futures could help determine the best investing strategy for your risk tolerance and return objectives. For starters, futures trading requires a good faith deposit to access contracts, often with quarterly maturity, while a crypto margin account lets you leverage the spot market. The futures market might require that you pay closer attention to liquidity — that is, how easily you can trade while still receiving a competitive price.

With a crypto margin account, liquidity is generally not a problem in the spot market; knowing how much you can borrow might be the greater issue to consider. Because the spot market is perpetual, you also must determine for how long you want to own a coin. With futures, by contrast, expiring contracts set a limit on how long you can hold a position; however, you may bypass this by using perpetual futures.

It’s also important to analyze is the premium over the spot price that you are paying or are being paid. Further, trading on an unregulated platform or one with a sketchy reputation could result in possible liquidity failures or liquidation.

Similarities Differences
Margin and futures offer the chance to trade large positions with a small amount of capital Using margin requires paying a broker interest on your loan
Both can result in large and fast losses Futures trading requires a good-faith deposit
With perpetual futures, you can keep an open position indefinitely, similar to how the spot market works, but you also might owe The futures crypto market can experience premiums to spot prices

Margin vs Futures Trading in Crypto

Knowing the differences between margin and futures, as well as the similarities, goes a long way toward protecting yourself from unforeseen risks when trading crypto. You can find out more about crypto trading specifically in SoFi’s Guide to Crypto for Beginners. What’s more, you can learn about other ways that margin trading and futures differ and overlap in the crypto world. For now, here are several key points to consider:

Trading Crypto With Margin Trading Crypto With Futures
Incurs daily expenses via interest owed on borrowed funds Quarterly futures contracts can avoid fees and might be better for long-term holders
Liquid spot prices help ensure a fair price when buying and selling Futures’ basis can fluctuate
It is common to trade with between 3x-to-0x leverage Often higher leverage is employed than with margin trading

Investing and Trading Crypto With SoFi

Trading cryptocurrency on margin, and using futures contracts (including perpetual futures) to control crypto positions are commonly used, through advanced, trading methods.

Each has its own advantages and risks. While crypto margin trading offers exposure to the spot market using borrowed funds, trading with crypto futures lets investors deposit margin as collateral to control large positions for future delivery.

All it takes is at least $10 to buy and sell crypto on SoFi. You can earn a bonus of $10 in Bitcoin by doing so. A benefit of cryptocurrencies is that you can trade outside of standard stock market hours, as the crypto market is open 24/7. SoFi takes security seriously and uses a variety of tools to keep investors’ crypto assets safe.

Start trading crypto today on SoFi Invest.


Are margin trading and futures the same?

Margin trading and futures trading are two different trading techniques. It’s key to understand both approaches before using them because they are considered advanced. Margin accounts usually involve traders opening crypto positions with borrowed money. You can control more capital with your portfolio, which allows you to leverage positions. You can experience amplified gains and losses with margin trading, so it is riskier than trading without leverage.

Futures contracts work differently in that they are binding agreements where you agree to buy or sell an underlying asset at a pre-specified price in the future. You can go long or short futures depending on your directional wager. With crypto trading, futures are often quarterly or perpetual contracts.

Do you need margin to trade futures?

You need margin to trade futures. Margin in futures trading refers to a good faith deposit used as collateral to open positions. It does not involve borrowing money from a broker, so there is nothing to repay, but you might owe funding rate fees when you own perpetual futures. Your futures account collateral also represents your maintenance margin — a minimum amount of equity needed to continue trading.

What are futures contracts and how do they work?

While margin traders participate in the spot crypto market, futures traders place trades on assets to be delivered in the future. You can think of futures vs. margin as a difference in the price of crypto in the spot market versus futures prices at some point later. Participants in the crypto futures market speculate on the future price of a coin.

You can use leverage in the futures market — some exchanges allow a leverage ratio of as much as 125:1 — using margin as collateral to open positions. Crypto futures might trade at a large premium to the spot market, and it might take a long time to exit a futures position at a competitive price.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
*Borrow at 2.5% through 5/31/22 and 5% starting 6/1/22. Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see for detailed disclosure information.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

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5 Ways to Avoid Taxes on Social Security Income

Social Security and money
J.J. Gouin /

The Tax Cuts and Jobs Act of 2017 changed a lot of rules, but one thing remains the same: It is exceedingly difficult to evade the long reach of the taxman.

That’s even true of Social Security benefits. Many people know that if you work while collecting benefits before reaching your full retirement age, it can result in a reduced benefit. But earn too much money — even by simply making withdrawals from some types of retirement plans — and you also can end up owing income taxes on your Social Security benefits.

According to the Social Security Administration (SSA):

“Some of you have to pay federal income taxes on your Social Security benefits. This usually happens only if you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return).”

Whether you owe taxes on these benefits depends on your “combined income.” The SSA defines this as the sum of:

  • Your adjusted gross income
  • Your nontaxable interest
  • One-half of your Social Security benefits

If you file an individual tax return and your combined income is between $25,000 and $34,000, you may owe income taxes on up to 50% of your Social Security benefits. Earn more than that, and up to 85% of your benefits could be subject to taxes.

If you file a joint return and your combined income is between $32,000 and $44,000, you may owe taxes on up to 50% of your benefits. Earn more than that, and up to 85% could be taxable.

Fortunately, there are ways to reduce your income and reduce — or even avoid paying — taxes owed on your Social Security benefits. They include:

1. Delay collecting your benefits

Retiree with money and a clock.
Just dance /

Choosing to delay collecting Social Security benefits until your full retirement age — or even beyond — might be the simplest way to avoid paying taxes on your Social Security benefits, at least for a while.

Waiting to file for benefits also means you will get a bigger check each month once you finally do start collecting.

For more on the pros and cons of delaying Social Security benefits, check out:

2. Don’t work, or work less, in retirement

Seniors happy and relaxed in retirement
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Every dollar you earn doing part-time work can push you a little closer to owing taxes on your Social Security benefits. Of course, it’s silly to quit a job you enjoy — or need — simply to trim your tax bill.

But if the job is a low-wage pain in the neck that only provides you with a modest financial benefit, you might be better off — at least emotionally — quitting so that you can reduce your income for the tradeoff of lowering or eliminating taxes on your Social Security benefits.

3. Avoid municipal bonds

Senior woman preparing for retirement
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A lot of people turn to municipal bonds as a way to lower their tax bill. Interest earned from these types of bonds typically is not subject to income taxes.

However, municipal bond interest is included in the formula that determines whether you will pay taxes on your Social Security benefits.

As states:

“When it comes to taxing Social Security benefits, tax-free municipal bond interest can become a ‘stealth tax’ that quietly eats away at income. Bondholders should be aware of these potential tax consequences when deciding between tax-free muni bonds and other kinds of fixed-income investments.”

Consider consulting with a financial adviser to help you determine whether municipal bond holdings might cause such trouble for you.

4. Withdraw money from a Roth account

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If you have socked away money in a traditional IRA or 401(k) plan, expect Uncle Sam to come calling during your retirement. After years of deferring taxes on those contributions, the bill is due once you begin making withdrawals on the money.

Additionally, these withdrawals will boost your combined income, which could make the difference in whether or to what extent your benefits are taxed.

One way to avoid such taxation is to withdraw only as much money as the government obligates you to do each year — known as the required minimum distribution (RMD) — and to take any additional cash that you need from a Roth IRA or Roth 401(k) plan, if you have one. No taxes are due on Roth distributions, and these withdrawals will not impact your combined income.

However, there are many good reasons not to withdraw money from a Roth account — including that RMDs do not apply to Roth IRAs.

So, consult with a tax professional before making this decision. A pro can help you decide whether withdrawing money from a Roth account — or making a combination of withdrawals from both a Roth and a traditional account — is the best strategy for you.

5. Distribute your RMD to a charity

Senior man working on a laptop
Monkey Business Images /

Giving money to charity is a great way to help make the world a better place. While doing good for others, you can also lower the odds that your Social Security benefit will be taxed.

If you are at least 70½, you can take up to $100,000 of your annual required minimum distribution, give it to a charity and avoid income taxes on the money. This is known as a qualified charitable distribution.

Since the money is not taxed, it will not boost your adjusted gross income. But you need to be aware of some key rules.

For starters, the money must be directed to a qualified 501(c)(3) organization.

Also, you cannot use funds from a 401(k) or other employer-sponsored plan to make this type of distribution. There are ways around this — such as rolling over money to an IRA — but again, this strategy should not be used without consulting your tax adviser.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


10 Inherited Items Worth More Than You Think

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After 25 years of appraising and reselling antiques, I know how daunting it can be to settle an estate. It usually goes something like this: A family is overwhelmed after inheriting a house stuffed to the rafters with generations’ worth of objects. They choose a few keepsakes for themselves and then rent a roll-off dumpster to dispose of everything else.

And while that approach might feel efficient, it’s a tremendous waste. Sometimes the most mundane-looking items can be worth a surprising amount of cash. So if you’re a recent heir, take a breath — and take stock. These items are worth more than you think.

1. Cookware

Vintage Texas Ware bowl
Kentin Waits / Money Talks News

There may be money in those kitchen cabinets! Buyers love cookware that’s been proven by years of use. Look for Pyrex and Fire-King casserole dishes. Texas Ware mixing bowls (pictured) and Revere Ware pots and pans.

Beyond their practical uses, many of these brands are hot collectibles. This jadeite casserole dish by Fire-King sold for $178.40 on eBay.

2. Midcentury furniture

midcentury modern couch sofa loveseat
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From architecture to accent tables, midcentury design is having a moment. If you’ve inherited a houseful of MidMod (midcentury modern) furniture, get ready to be pleasantly surprised.

Eager buyers aren’t limiting themselves to high-end designers. Decidedly midmarket when first produced, pieces by Heywood-Wakefield can now sell for several hundred dollars. And this Plycraft chair and ottoman (a knock-off of a famous Charles Eames design) recently sold for $1,350 on eBay.

See also: “8 Tips for Selling Inherited Family Furniture”

3. Vintage tools

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At estate sales, I’ve noticed shoppers make a beeline for the garage or basement workshop in search of tools. Vintage Craftsman, Skil and Stanley products sell well because they’re better made than their contemporary counterparts.

And don’t worry about emptying the toolshed. If you’re lucky enough to inherit one of these 20 valuable old tools, you can afford to hire a handyman anytime you need one.

4. Old phones

rotary phone
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Everything old is cool again. Collectors pay top dollar for rotary phones made of an early type of plastic called Bakelite. This Western Electric model from the 1930s sold for $155.99 on eBay.

Princess phones from the 1960s and ’70s are in demand too. Unusual colors like pink, mint green and orange command the highest prices. This aqua blue touchtone phone made by Bell System recently sold for $150 on eBay.

5. Retro clothing

Vintage retro clothes clothing
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Have you inherited closets packed with vintage clothing, shoes and accessories? Buyers are waiting.

According to thredUP, an online consignment and thrift store, the used clothing market is expected to be worth $84 billion by 2030. That demand is fueled by a new generation of consumers who prioritize sustainability and appreciate the quality and style of vintage clothing.

Not convinced? This vintage pair of Florsheim Imperial shoes recently sold for $295 on eBay. And on Etsy, this three-piece Pendleton set for women is listed for $160.

See also: “11 Secrets to Finding Quality Clothing at Thrift Shops”

6. Stainless steel flatware

Antique silverware
Zadorozhnyi Viktor /

Stainless flatware sold in most department stores today should be called “bentware.” The quality and durability just doesn’t compare with pieces from the 1960s and ’70s.

Consumers are noticing and willing to “fork” over more cash for better quality. This 59-piece Oneida flatware set sold for $175 on eBay and this Montgomery Ward set brought $112.50.

7. Old eyeglasses

Hipster man with vintage glasses
MS_studio /

Brands like Warby Parker have carved out a niche by selling vintage-inspired eyeglass frames. But there’s a strong market for truly old-school glasses. The following styles are hot sellers right now:

  • “Cat-eye” frames from the 1950s
  • Round wire-frames
  • Horn-rimmed frames (sometimes referred to as “Buddy Holly glasses”)

Vintage examples in good condition can sell for $25-$65 per pair.

8. Vintage Christmas decorations

Sarycheva Olesia /

Yes, Virginia, there is a Santa Claus. Vintage glass ornaments made in Germany by Shiny Brite sell well all year long. This lot of 61 ornaments recently sold on eBay for $295, and this Shiny Brite tree-topper brought $75.

And remember those ceramic table-top Christmas trees from the 1970s? They’re selling for hundreds these days. This 23-inch tree made by Atlantic Molds is listed for $500 on Etsy.

9. Original artwork

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Over the years, many older adults accumulated generations’ worth of family art. Purchased in a gallery or homemade by a budding artist, original creative work can sell for serious money.

And though it may be tempting, don’t cast aside art that looks crudely done. Sometimes referred to as “naïve” or “outsider art,” these pieces may have value. This painting of South Beach, Florida, signed simply “E.S.,” recently sold on eBay for $235.

10. Vintage vinyl

George Carlin records
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Those milk crates full of vinyl records just might be hiding a treasure. Even if you don’t have one of the rarest records of all time, you could still make a handsome sum in the resale market. This Buckingham Nicks album (by the Fleetwood Mac members) recently sold for a rockin’ $149.99 on eBay.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


7 Reasons Workers Age 65 and Older Have Not Retired Yet

A senior worker in eyeglasses stands in his carpentry workshop
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It seems like more and more Americans can’t get enough of work, whether it’s for enjoyment or necessity.

The Bureau of Labor Statistics estimates that by 2028, about 23% of people age 65 or older will be in the workforce.

Money Talks News even points out some signs that might mean it’s time to get back into the workforce in “8 Signs That You Should Leave Retirement.”

Provision Living, which operates senior living communities in three states, recently sought to find out why seniors continue to work. It surveyed more than 1,000 people between age 65 and 85 who work full- or part-time.

The responses indicated that 62% of these folks work for financial reasons while 38% work for personal reasons.

Following is a closer look at the findings. The percentages we report indicate the share of all surveyed seniors who cited a particular reason.

7. Loneliness

A senior woman looks out the window of her home /

Surveyed seniors who said this is the main reason they continue working: 2.3%

The Provision Living survey found that a small share of working seniors stay on the job out of loneliness. Specifically, these seniors “say that their workplace provides invaluable camaraderie and they would feel too lonely if they stopped working,” according to the survey.

These seniors might be on to something. The findings of a 2018 survey of people ages 50 to 80 from the University of Michigan National Poll on Healthy Aging suggest that chronic loneliness can affect older adults’ memory, physical well-being, mental health and life expectancy.

6. Saving for a big expense

A senior couple enjoys their retirement savings
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Surveyed seniors who said this is the main reason they continue working: 2.5%

Older workers adding to their income by working must also be smart about not wasting those precious dollars.

While that sounds like common sense, you may be wasting money without realizing it. Money Talks News outlines several ways that seniors blow money needlessly in “7 Surprising Ways Retirees Waste Their Savings.”

5. To avoid boredom or fill time

A black senior man drives a forklift at work
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Surveyed seniors who said this is the main reason they continue working: 11.4%

The Provision Living survey found that about 6.8% of working seniors remain in the workforce out of boredom and about 4.6% work to fill time, although the survey did not explain the difference between these two responses.

Many people relish the thought of never having to work again, but for some, retirement isn’t all it’s cracked up to be. All those hours once spent commuting and working have to be filled up somehow.

For folks who can relate, Money Talks News lays out a game plan for making retirement fun and constructive in “7 Things You Should Try If You Regret Retiring.” And only one of the suggestions involves a job.

4. Supporting family

A senior Asian couple with their grandchild
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Surveyed seniors who said this is the main reason they continue working: 14.3%

The days of kids financially being on their own at age 18 are quickly fading into the past, with more parents helping support their kids well after they officially become adults.

This should not delay your retirement, though: There are numerous ways you can help grown kids financially without sacrificing your own finances, as we detail in “6 Ways to Help Adult Children Without Going Broke.”

3. Paying off a mortgage or other debt

Happy seniors
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Surveyed seniors who said this is the main reason they continue working: 19.9%

The Provision Living survey found that about 8.1% of working seniors remain in the workforce because they are paying off a mortgage. An additional 11.8% said they are still working because they are paying off debt, although the survey does not specify what type of debt.

At least seniors’ average debt load of $70,633 is less than the national average of $93,446, according to a 2019 analysis from credit reporting company Experian.

If you’re carrying debt, whether as a senior or a younger person, check out “8 Surefire Ways to Get Rid of Debt ASAP” for advice. If you need help digging out of your debt, try the Money Talks News Solutions Center, which can direct you to a trustworthy credit counselor.

2. Can’t afford to retire

Confused senior
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Surveyed seniors who said this is the main reason they continue working: 22.9%

About 22.9% of working seniors “say they simply can’t afford to retire at the moment,” according to Provision Living.

That easily makes retirement affordability — or rather, lack thereof — the most commonly cited financial reason for which seniors remain in the workforce. The second-most common financial reason, supporting family, was cited by only 14.3% of survey respondents.

1. Enjoy working

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Surveyed seniors who said this is the main reason they continue working: 23.2%

The survey found that of seniors who still work either full-time (17.1%) or part-time (6.1%), nearly a quarter do so because they enjoy it. That makes enjoyment of work the most commonly cited reason, whether financial or personal, among survey respondents.

Are you a senior who is still working? What are your reasons for delaying retirement? Share them with us in the comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.