Market Performance: April 5, 2024.

US stocks wobbled on Monday as investors kicked off a big week that will see a fresh inflation data test for rate-cut views and the start of first quarter earnings season. The Dow Jones Industrial Average (^DJI), the S&P 500 (^GSPC), and the tech-heavy Nasdaq Composite (^IXIC) wavered around the flatline after opening with slight gains.

A strong jobs report helped lift stocks on Friday but couldn't fend off weekly losses as doubts about the Federal Reserve's resolve for interest rate cuts preyed on minds. US bonds sold off last week amid that uncertainty, and the pressure continued Monday with a slight rise in the 10-year Treasury yield (^TNX) to above 4.45%.

While the benchmark has pared gains, it is still within reach of the key 4.5% level seen by some as a potential tipping point for a run-up toward last year's highs.

Want to Retire Abroad? Things to Know About Your Money

The dream of retiring outside the U.S. is becoming a reality for more Americans. You may see your standard of living rise in a country like Norway or Iceland, or maybe you envision a healthier lifestyle in the warm and sunny climates of Costa Rica, Portugal or Mexico. The reasons to retire abroad are as diverse as the destinations themselves.

As of 2021, the Social Security Administration reported that nearly 450,000 individuals were receiving their benefits outside the United States, marking a notable increase from the 307,000 recipients in 2008. However, the actual number of retirees living abroad is likely even higher.

Your cash accounts

When retiring outside the U.S., it’s important to understand what’s different about the other country’s banking system. Brett Spencer, a fee-only financial adviser and founder of Impact Financial who specializes in helping retirees overseas, advises that a crucial step before making the move is to set up a local bank account months before you make the move. Believe it or not, opening a foreign checking account is a slow process.

This proactive measure is essential due to the reluctance of some international banks to work with Americans, coupled with the potential longer-than-expected delays in setting up basic banking services. The last thing you want is to assume you’ll have cash in the bank only to find out your account won’t be established for several weeks.

Your taxes

Will moving to a cheaper country really save you money when you factor in taxes? As a U.S. citizen, you’re on the hook for taxes on your global income, with obligations to file stateside no matter where you live. While there are exclusions for foreign-earned income, these don’t apply to retirement or investment income, meaning your tax situation could get complicated.

If your new home country has a tax treaty with the U.S., you might dodge double taxation or qualify for credits on your U.S. tax return for taxes paid abroad. Yet, be prepared for different tax structures, including possible wealth taxes, though some countries offer sweet tax deals for U.S. retirees.

Read More.

An Investing Road Map for Early Career Accumulators

Because they’re just starting out, early career accumulators—loosely defined as people in their 20s and 30s—don’t typically have much in the way of financial capital (unless they’re technology savants or supermodels, that is).

Not only are their earnings often low relative to where they’ll be in the future, but new college grads may also be digesting college debt. But early career accumulators have other assets that their older counterparts can look upon with envy. With a whole lifetime of earnings stretching before them, early career people are long on what investment researchers call human capital: Their ability to earn a living is their greatest asset by a mile.

Put Debt in Its Place

One of the earliest forks in the road that many early accumulators face once they begin earning a paycheck is whether to steer a portion of that paycheck to service debt or to invest in the market. If it’s high-interest-rate credit card or student loan debt that features a particularly high rate, it’s worthwhile to earmark the bulk of one’s extra cash for those “investments.”

Make the Investment in Human Capital

While we’re on the topic of “investments” in the broadest sense, the 20s and 30s are also the ideal life stage to make investments in your own human capital—obtaining additional education or training to improve your earnings power over your lifetime. Of course, not every such investment pays off, and it’s ideal if you can get your employer to shoulder at least some of the financing. But if you have considered an advanced degree or extra training of any kind, the earlier you get started, the higher your lifetime return on your outlay is apt to be.

Build a Safety Net

With limited financial capital, it’s essential that young accumulators protect what they have and be able to cover financial emergencies should they arise. A good rule of thumb is to insure against risks that would cause extreme financial hardship and to skip insurance for items that would not. Homeowner’s (or renter’s), health, disability, and auto insurance are musts, as is life insurance if you have minor children; on the flip side, you can do without the extended warranty for your laptop or washing machine.

Kick-Start Your Retirement Accounts

There are a lot of reasons that early accumulators put off saving for retirement. There’s the not-small fact that many people in their 20s and 30s are saddled with heavy student debt loads. Moreover, 20- and 30-somethings often have one or more shorter-term goals competing for their hard-earned dollars alongside retirement savings: down payments for first homes, cars, weddings, and children, for example.

Focus on Tax-Sheltered Vehicles

For retirement savers of all ages, it’s worthwhile to focus on investment vehicles that give you a tax break for doing so: company retirement plans like 401(k)s, 403(b)s, and 457 plans, as well as IRAs. (Self-employed individuals have an array of different vehicles to choose from.) A company retirement plan, if one is available, is invariably the simplest way to get started on retirement savings. Not only do many company retirement plans offer matching dollars on employees’ investments, but having contributions extracted directly from a paycheck helps reduce the pain of investing.

Alternative Investing