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Trust This. A Potpourri of Updates and Retirement News

December 23, 2022

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By Joseph E. Seagle, Esq. ● Dec 23, 2022

Smart Brevity^® count: 3 mins...734 words

Happy 🎄 Christmas Eve Eve, the sixth day of 🕎 Hanukkah, and Friday ✌️ ! Hoping all your shopping is done, the candles are lit, and your wishes come true this year. We’ll keep this edition shorter than usual this week because I’m not done with my 🛍️ shopping and need to get it done.

1 big thing: Looking back on 2022

PBMs are becoming the easy target on drug pricing

This year's biggest stories in real estate were inflation, interest rates, buyer demand, seller supply, insurance costs, and scams.

This week saw updates in all of these subjects.

Mortgage prepayments fell while delinquencies increased in November.
Mortgage interest rates slipped for a 6th straight week to 6.27%.
Home sales dropped by a record year-over-year rate of 35% last month.
Sellers delisted homes at the fastest rate ever in November.
Applications for new home purchase mortgages dropped another 0.1% for the week, but refinance applications were up 6%.

Inflation has driven prices out of reach for over 80% of the homes on the market for those making median incomes or less.

What they’re saying: about insurance: Politifact ran the latest law changes through their Truth-o-Meter, and it’s not pretty for consumers who won’t see much, if any, rate decreases.

And, speaking of scams, Pennsylvania and Massachusetts joined Florida in suing MV Realty PBC, LLC for taking 40-year listing agreements in exchange for small sums paid to those consumers.

The bottom line: 2022 is ending on a mixed note for home sales and interest rates, while the Florida Legislature and MV Realty will be getting coal in their stockings this year.

2. 2023 Retirement funds changes

Congress dealing with surprise medical bills

Congress made major changes to retirement account rules for 401K plans and IRAs as part of the $1.3 trillion 2023 spending bill that passed the Senate yesterday and is expected to pass the House today.

Why it matters: The bill is a cornucopia of spending for defense, healthcare, Medicare, and Social Security, but only about $15 billion for discretionary projects. It funds the government through next September.

By the numbers: Focusing on retirees:

Social Security Administration got a 6% increase to $14.8 billion to pay more employees to process claims and answer calls faster.
Centers for Medicare & Medicaid Services received $4.1 billion in total spending, an increase of $100 million.
Department of Veterans Affairs got $134.7 billion, an increase of $22.5 billion.

What’s next: Big changes are in store for retirement accounts too, most starting in 2025.

Require most employers that offer 401(k) or 403(b) plans to enroll new hires automatically and to increase their contribution level annually unless the employee opts out. Part-timers can participate sooner. This will triple the number of participants in such plans.
Increase from 72 to 75 the age at which individuals must start taking required minimum distributions (RMDs) from their retirement accounts. The change would be phased in from 2023 to 2033.
Reduce penalties for failures to take RMDs from the current 50% down to 10%.
Raise limits on catch-up contributions to 401(k) and 403(b) accounts for people ages 60 to 63 up to $10,000 extra each year.
Student loan payments may be credited as employee contributions to a 401K plan, meaning that employers would match those payments, helping student debt-laden employees to still build retirement savings.

The non-refundable IRA tax credit would be repealed and replaced with a federal matching contribution to a retirement account starting in 2027.

Go deeper: CNET

3. What passed by

San Francisco rowhouses with dollar signs floating above them

Home flipping profits dropped 18.4% from the previous quarter, the most significant pace in over a decade. CNBC
The cost of mortgage fraud is up over 20% this year. National Mortgage Professional
AirBnB is working with apartment complexes to allow tenants to sublet their apartments on the platform. Bigger Pockets
Over half of Jacksonville’s home sales in October were all-cash in a trend that is up nationwide over last year. Barron’s

4. Pic of the day

Black labrador retriever with head resting on an exercise bench

Edward is getting ready to get ready to exercise in the coming new year while waiting for Santa to arrive.

We and most businesses will be closed on Monday for a three-day weekend, plus we’re closing early today 😆. If you also have a long weekend, make the most of it, and enjoy the Arctic bomb cyclone. Mele Kalikimaka!

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