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Yahoo Finance 12 October, 2021 - 12:04pm

Older Americans Are Making This Costly Mistake When Saving for Medical Costs

Yahoo Finance 12 October, 2021 - 08:50pm

Older Americans have the opportunity to be healthier and wealthier, but an unsavvy financial tendency is ailing them.

A large percentage of American seniors who are saving to cover health care expenses are skipping the tax-advantaged ways to accumulate such funds, a study has found.

Researchers at the University of Michigan surveyed more than 2,000 people ages 50 to 80 on whether they were saving for medical care and, if so, how. The results indicate many older Americans aren’t saving for health care expenses at all.

Almost as concerning, though, was the survey’s discovery that among those who are saving, many are not employing tax-efficient ways to do so.

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In January 2021, the University of Michigan National Poll on Healthy Aging surveyed a national sample of more than 2,000 adults, ages 50 to 80, about concerns they had during 2020 regarding affording needed health care in the future and their saving for health care.

The survey found that 13% delayed seeking medical care because of their worry about the cost, 12% needed medical care but did not get it because they could not afford it and 15% had problems paying medical, dental or other health care bills.

Furthermore, they were pessimistic about the future: 18% were not at all confident they would have enough money to pay for health care expenses in the next year.

Among the 71% of adults surveyed who had not put aside money to pay for health care in the past 12 months, 40% said they already had enough savings to pay for health care they might need.

More than 1 in 4 who had not saved said it was because they could not afford to. Other less common reasons were not needing any health care services (18%) and not having thought about it (13%).

Fewer than 1 in 3 adults (29%) reported that in the past 12 months they had put aside money to pay for health care expenses before they needed it. The savers put money aside in several ways.

Following are ways to stretch your health care spending.

The study found that only 5% of adults had put money in health savings accounts (HSAs) before they needed it. An HSA, which must be paired with a high-deductible health plan, lets you invest for future medical expenses while enjoying special tax breaks.

Your contributions, which are pre-tax, reduce your taxable income and your money grows tax-free. Also, your withdrawals are tax-free as long as you use the money on qualified medical expenses.

Since an HSA is yours and not your employer’s, any unused funds in the account are yours to keep, and that money continues to grow tax-deferred.

The IRS sets HSA contribution limits each year, but these are typically high. For 2021, the maximum HSA contribution is $3,600 for a self-directed plan or $7,200 for a family plan. But if you’re at least 55, you can make an additional catch-up contribution of $1,000 into your account.

For 2022, the maximum HSA contribution is higher: $3,650 for a self-directed plan or $7,300 for a family plan. The catch-up contribution limit for those 55 or older remains at $1,000 in 2022.

The study also found that just 9% of survey respondents said they had put money into flexible spending accounts (FSAs) before they needed medical care. FSAs are employer-provided accounts and do not require a high-deductible health plan, so you can pair it with a low-deductible health plan.

Employers may contribute to these accounts but aren’t required to. These plans can be used to cover co-payments, deductibles, some drugs and various other out-of-pocket medical and dental costs.

You don’t pay taxes on contributions, which means you’ll save an amount equal to the taxes you would have paid on the money you set aside.

Even though FSAs are employer-provided you may roll over up to $550 of unused funds into the following year or be granted a 2.5-month grace period in which to use the money in the following year.

In order to get an FSA you must sign up during your employer’s annual open enrollment period, typically in the fall. Unlike HSAs, your FSA contributions don’t earn interest, and because these plans are employer-provided, you lose these accounts if you leave your job.

The contribution limit of medical FSAs (which differ from dependent care FSAs) for 2021 and 2022 is $2,750 per person, the same as it was for 2020. For married couples, each spouse can put up to $2,750 in their FSAs accounts.

Just 5% of adults age 50 to 80 reported having a health reimbursement account (HRA). These are employer-funded group health plans from which employees are reimbursed — tax-free — for qualified medical expenses up to a fixed dollar amount per year.

Employers claim a tax deduction for the reimbursements they make through HRAs. Even though you don’t need to pair an HRA with a high-deductible health insurance plan, you still have to link it with a group health plan as determined by your employer.

Unused amounts may be rolled over to be used in subsequent years.

Unlike HSAs, funds in HRAs are owned by the employer, who decides how much to fund employees’ HRAs. If you leave an employer who sponsors an HRA, the employer keeps the money in the account.

Finding a financial adviser you can trust doesn’t have to be hard. A great place to start is with SmartAsset’s free financial adviser matching tool, which connects you with up to three qualified financial advisers in five minutes. Each adviser is vetted by SmartAsset and is legally required to act in your best interests.

If you’re ready to be matched with local advisers who will help you reach your financial goals, get started now.

Bank accounts were used by 19% of adults surveyed.

Bank accounts do not offer the tax advantages that HSAs, FSAs, and HRAs do, and yet they are much more popular among Americans socking away money for health care.

Having saved for health care in one of these above accounts in the last 12 months was more common among individuals ages 50 to 64 compared with those ages 65 to 80 (34% versus 22%).

More-educated people also tended to save for health care at higher rates: Individuals with at least a bachelor’s degree were more likely to have saved for health care in one of these accounts in the last 12 months compared with those with a high school education or less (38% versus 22%).

In addition, individuals with an annual household income of at least $100,000 compared with one of less than $30,000 (39% versus 19%) were more likely to save for health care expenses.

Among those who put money aside for health care in HSAs, FSAs, HRAs and bank accounts in the past 12 months, 44% saved $2,000 or more, 18% saved $1,000 to $1,999 and 24% saved less than $1,000.

Those saving for health care in mere bank accounts forfeit the opportunity to take advantage of the tax advantages that HSAs, FSAs and HRAs offer.

A large number of Americans ages 50 to 80 have not been saving for health care expenses. Not only that, but many of those who have been saving are not doing so in a tax-efficient way by using HSAs, FSAs and HRAs.

Those who are saving in a tax-efficient manner tend to be wealthier, healthier and better educated than those who aren’t.

As health insurance plans ask people to pay for more of their health care out of their own pockets, such as through high deductibles, these tax-advantaged accounts can help people avoid having to choose between getting health care and not getting it.

Finding a financial adviser you can trust doesn’t have to be hard. A great place to start is with SmartAsset’s free financial adviser matching tool, which connects you with up to three qualified financial advisers in five minutes. Each adviser is vetted by SmartAsset and is legally required to act in your best interests.

If you’re ready to be matched with local advisers who will help you reach your financial goals, get started now.

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Is Kimberly Clark Corporation (KMB) A Good Stock To Buy?

Yahoo Finance 12 October, 2021 - 06:46pm

Is KMB a good stock to buy? Kimberly Clark Corporation (NYSE:KMB) has seen an increase in hedge fund interest recently. Kimberly Clark Corporation (NYSE:KMB) was in 37 hedge funds' portfolios at the end of June. The all time high for this statistic is 46. There were 31 hedge funds in our database with KMB holdings at the end of March. Our calculations also showed that KMB isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

David Siegel of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we're going to analyze the latest hedge fund action surrounding Kimberly Clark Corporation (NYSE:KMB).

Heading into the third quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. By comparison, 37 hedge funds held shares or bullish call options in KMB a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Citadel Investment Group held the most valuable stake in Kimberly Clark Corporation (NYSE:KMB), which was worth $173.5 million at the end of the second quarter. On the second spot was Two Sigma Advisors which amassed $168.6 million worth of shares. Diamond Hill Capital, Arrowstreet Capital, and Bridgewater Associates were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Te Ahumairangi Investment Management allocated the biggest weight to Kimberly Clark Corporation (NYSE:KMB), around 0.66% of its 13F portfolio. Diamond Hill Capital is also relatively very bullish on the stock, setting aside 0.59 percent of its 13F equity portfolio to KMB.

With a general bullishness amongst the heavyweights, some big names were leading the bulls' herd. Armistice Capital, managed by Steven Boyd, established the most outsized position in Kimberly Clark Corporation (NYSE:KMB). Armistice Capital had $19.8 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson's Adage Capital Management also initiated a $10 million position during the quarter. The following funds were also among the new KMB investors: Paul Marshall and Ian Wace's Marshall Wace LLP, Steve Cohen's Point72 Asset Management, and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors.

Let's check out hedge fund activity in other stocks similar to Kimberly Clark Corporation (NYSE:KMB). These stocks are Constellation Brands, Inc. (NYSE:STZ), T. Rowe Price Group, Inc. (NASDAQ:TROW), IHS Markit Ltd. (NYSE:INFO), Agilent Technologies Inc. (NYSE:A), The Bank of New York Mellon Corporation (NYSE:BK), Schlumberger Limited. (NYSE:SLB), and TE Connectivity Ltd. (NYSE:TEL). This group of stocks' market valuations are similar to KMB's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STZ,50,1607881,-8 TROW,24,407032,-2 INFO,61,5947551,7 A,39,3891487,-3 BK,52,4907372,3 SLB,41,1067022,-9 TEL,39,2134995,0 Average,43.7,2851906,-1.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 43.7 hedge funds with bullish positions and the average amount invested in these stocks was $2852 million. That figure was $903 million in KMB's case. IHS Markit Ltd. (NYSE:INFO) is the most popular stock in this table. On the other hand T. Rowe Price Group, Inc. (NASDAQ:TROW) is the least popular one with only 24 bullish hedge fund positions. Kimberly Clark Corporation (NYSE:KMB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KMB is 51.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and surpassed the market again by 4.4 percentage points. Unfortunately KMB wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); KMB investors were disappointed as the stock returned -0.1% since the end of June (through 10/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

Get real-time email alerts: Follow Kimberly Clark Corp (NYSE:KMB)

Disclosure: None. This article was originally published at Insider Monkey.

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an […]

Shares of R.R. Donnelley & Sons (NYSE: RRD) popped this morning after the printing and marketing company received a buyout offer from its largest shareholder for a price that represents a whopping 52% jump from the stock's Monday's closing price. R.R. Donnelley shares were trading up 38% as of 11:35 a.m. EDT. In a regulatory filing dated Oct. 12, R.R. Donnelley revealed it has received a nonbinding offer from Chatham Asset Management to acquire the company at a price of $7.50 per share.

"There's some fears around what happens later in the winter,” says Citi analyst Prashant Rao.

'The Big Short' guy remains bearish. But he's long on this trio of stocks.

Industry researchers dished out yet another warning that Micron's pricing power is under pressure.

Shares of the clinical-stage biotech Ocugen (NASDAQ: OCGN) spiked by as much as 22% in premarket trading Tuesday morning. The biotech's stock is moving northward this morning on the news that the COVID-19 vaccine, Covaxin, was granted emergency use approval for children ages 2 to 18 by India's Subject Expert Committee. This vaccine is among the first to receive such a broad emergency use authorization label in the entire world.

Smaller lithium stocks are attracting greater investor interest as underlying companies make progress.

Micron Technology's (NASDAQ: MU) stock lost more than a quarter of its value over the past six months as investors fretted over a potential supply glut of memory chips. Its fourth-quarter report, released on Sept.

Futures fell on an Apple iPhone production report. The market rally closed poorly, despite Upstart and more making strong moves.

The hardest part of consumer finance, according to Morgan Stanley’s Betsy Graseck, is lending. Outlining the bullish case for SoFi Technologies (SOFI), the company being a specialist in this specific segment is a major differentiator. “SoFi is unique,” says Graseck. “It is a challenger consumer finance company that is leading with lending; specifically refinancing a high yield student loan into a lower rate.” Lending is particularly difficult as it requires understanding of credit and demands a

The mobile chip maker said its board had approved a new $10 billion buyback plan, which is effectively immediately.

The biotech stock, which has had a volatile year, is a favorite of retail investors because of its potential for a short squeeze.

What happened  Shares of InMode (NASDAQ: INMD) leaped 8.6% on Tuesday after the medical technology specialist boosted its full-year financial forecast.  So what InMode anticipates third-quarter revenue of $93.

Shares of Amkor Technology (NASDAQ: AMKR), a semiconductor packaging and test services company, were falling today after the company's stock received a downgrade from Credit Suisse analyst Randy Abrams. Abrams downgraded Amkor's stock to a neutral rating, down from outperform, and put a price target on the stock of $27, which was down from $28.50. Of course, investors don't like to see a stock get downgraded or for its target price to be lowered, so it's no surprise that Amkor's stock took a hit today.

Here's why one influential analyst is very bearish on shares of General Electric.

Now that struggling electric vehicle manufacturer Lordstown Motors (NASDAQ: RIDE) has sold most of its Lordstown factory in Ohio to Taiwanese electronics manufacturer Foxconn (OTC: FXCNF), the question arises whether Foxconn is a viable partner for the EV maker's strategy. Foxconn, after all, previously planned a $10 billion facility in Mount Pleasant, Wisconsin, in 2018. Investors may be wondering if the same thing will happen with the Lordstown Complex plant, but there are at least some indications the outcome will be more positive here.

Funny (or sad, depending on how you look at it) short story from this past week that will inspire you to (hopefully) scrutinize your portfolio as we head into 2022.

Sarepta Therapeutics stock is falling after the biotech company said it would sell more stock and provided an update on product revenue. Sarepta said that it would post third-quarter sales of $166.9 million. Sarepta stock gained 4.1% in regular trading hours Tuesday.

VZ stock provides a dividend but a buyback has been shelved amid 5G wireless investments. Will investors place a higher multiple on Verizon stock on expectations of revenue growth reaccelerating?

Novavax Will Be Volatile Until the Company Delivers Answers

InvestorPlace 12 October, 2021 - 12:37pm

The bullish case for NVAX stock is in plain sight, but still hard to see

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.  

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for InvestorPlace since 2019. 

Article printed from InvestorPlace Media, https://investorplace.com/2021/10/nvax-stock-will-be-volatile-until-company-delivers-answers/.

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