The Wrap: Mailing Holiday Gifts And Packages Gets More Expensive
Postal Service Hikes Rates for Holiday Season
Mailing Christmas gifts and other packages will be more expensive during the holiday season. However, rates will revert to previous levels on Jan. 22, 2023.
An Established Pattern
The rate hikes went into effect last weekend. This is the third week in a row that the post office has raised rates for the holiday season.
“These temporary rates will keep the Postal Service competitive and are similar to adjustments in past years to help cover extra handling costs to ensure a successful season,” according to a Post Office statement.
Not all mail services will experience price increases.
USPS domestic mail services affected by the price increases include Priority Mail, Priority Mail Express, First-Class Package Service, and USPS Retail Ground.
International mailing rates will not increase.
Rates will vary depending on the weight of the package, distance shipped and service used.
For instance, a priority flat-rate envelope is 95 cents more expensive to mail. In addition larger, heavier packages can cost almost $6 more than before the rate hikes.
Stamps Unchanged – For Now
Postage stamps are unchanged for the moment. The cost of a first-class stamp increased from 58 cents to 60 cents in July.
Stamp prices have marched steadily higher over the past couple of years and will likely continue that trek. Postmaster General Louis DeJoy has said he thinks stamp prices should increase in January.
USPS has made several recommendations for making holiday shipping easier.
Using Priority Mail flat rate boxes may help cut costs. The boxes are available free at your local post office. You can also order them and other supplies at usps.com/freeboxes
New Feature On Retirement Funds Statement May Help, May Confuse
All of you 401(k) statement junkies are undoubtedly pumped beyond your wildest imaginations. New statements are adding a feature that shows how much monthly income you should receive from your retirement plan if you retire at age 67.
The projections are required by The Security Act, a federal law passed in 2019.
The new feature illustrates how the lump sum of your 401(k) would pay out if it was converted to an annuity when you retire. There are two statements. One shows the estimate for income from a single life annuity. The other shows the performance of a qualified joint and survivor annuity. The latter pays an income to you and a surviving spouse.
Predicting the future is easier the closer you are to it. In other words, the new feature may be more useful for older workers.
“The projections are going to be pretty reasonable for someone who’s close to retirement, “but meaningless for someone who’s 25 or 35,” Phil Maffei, managing director of corporate retirement income products at TIAA, told Yahoo Money.
A Lot Does Not Go A Long Way
Usually, 401(k) statements are sent out every quarter. Most people key in on the lump sum of their 401(k). Someone with a couple of hundred thousand dollars in their account might feel satisfied with their plan. However, that money might not stretch as far as you think.
“I think it’s very helpful for helping people start to think about the outcome, and not emphasize the big pile of money,” says Philip Chao, principal, and chief investment officer at Experiential Wealth. “It’s really about how much money do I need to provide me a sustainable lifetime income. What is that number?”
Getting By On $250,000
GoBankingRates recently produced an analysis of how long $250,000 would last for retirees. The results are not etched in stone. There are many variables that impact retirement expenditures. For example, a single person spends less than a couple. Those who have eliminated debt will spend less than those who have not.
Another factor in retirement expenses is location. As a result, GoBankingRate broke down their study by state and the District of Columbia. Retirees in Hawaii had the least amount of time to whoop it up on their $250,000 — two years, eight months, and 23 days. Mississippians could stretch their $250,000 six years, three months, and 26 days, according to the analysis.
Neither the GoBankingRate report nor the new 401(k) illustrations include income from social security.
“For the bulk of Americans, it’ll be a wake-up call,” Richard Kaplan, a law professor at the University of Illinois, told CNBC.
To get a better handle on what your retirement funds will produce and what you can do to improve that, you can assess several free retirement income calculators. Several organizations provide such calculators, including:
Move To Cash
A volatile stock market coupled with high-interest rates has many investors leaving the market for cash investments such as money markets, certificates of deposit, and even savings accounts.
Last month fund managers increased their cash balances from 5.7 percent to 6.1 percent. The only time they were higher was in the aftermath of 9/11, according to Bank of America Global Research. In addition, the report, entitled “Les Miserables”, says fund managers are exhibiting a “max bear sentiment”. (Max Bare was a professional boxer who lost the heavyweight title to James Braddock in 1935).
Cash Has Cred
“Cash is now becoming a viable asset class because of what has happened to interest rates,” Paul Nolte of Kingsview Investment Management told Reuters.
Nolte typically keeps five percent of the portfolios in cash. However, he currently has 10 to 15 percent of client assets in cash investments.
Parked And Waiting
Interest rates paid by money market funds and money market accounts are rising. Top funds are paying upwards of two percent or more. At the same time, many money market accounts are consistently returning over two percent.
Money market funds are security accounts. Money market accounts are offered by banks and credit unions.
The move to these types of investments offers stability and a chance to earn a steady return. However, they are liquid, so investors can move back to the market when the time is right.
Knowing when the time is right is the trick. Three volatile elements will have to normalize before that occurs. Inflation will have to decline. The threat of recession will have to lift. International tensions will have to ease. However, a little ray of sunshine in any of those areas could unleash pent-up demand.
“There’s a degree of a coiled spring developing where if everybody is already on the sidelines at some point there is nobody left to go on the sidelines and that leads you to potentially any piece of good news resulting in a very outsized move,” said Mark Hackett, Nationwide’s chief of investment research.
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