December 2019 E-Newsletter

December 2019 Q & A

Q: My company is thinking about offering a student loan repayment benefit for our employees. How does it work?

A: This benefit, which pays off anywhere from a few hundred to a few thousand dollars a year in student loan debt for employees, has grown in popularity among Fortune 1,000 companies and may make sense for smaller companies. Firms can deduct the cost for a benefit that helps attract and retain top talent, and workers may stay with employers to keep the benefit. There aren't many rules governing this, so you might even have employees vest before getting the benefit. You might also offer an incentive for the loan repayment benefit in line with what employees put away for retirement, helping them meet another challenge.

Q: I am receiving alimony and heard that the tax rules have changed on this income. Is it true alimony is now tax-free?

A: In this case it's much better to receive than to give, according to the IRS. If you receive alimony payments directed by an agreement that was new or suitably modified in 2019, you won't owe federal income taxes on the amount. You may still owe local taxes on alimony and for older agreements, treating it as income for federal income tax purposes. Incidentally, pre-2019 alimony payments were tax-deductible, but not for post-2018 agreements.

THAT'S RICH!

Want to be really, really rich? Wealth-X, a global leader in wealth information and insights, reports that an education from certain colleges combined with working in the banking and finance industry makes this more likely. Leading this endeavor is Harvard University, followed in distant second place by England's Cambridge University and the National University of Singapore. Better than 4 in 10 ultra-high-net-worth individuals were in the banking and finance industry. In the U.S., Harvard was joined in order by Stanford, the University of Pennsylvania, NYU and Columbia to round out the top five.

JOB GROWTH SLOWING

The U.S. Bureau of Labor Statistics (BLS) reported that total nonfarm payroll employment in August rose by 130,000 while unemployment remained at 3.7%. The number was somewhat disappointing because it showed a slowing in growth, which included temporary Census jobs.

SPENDING UP SLIGHTLY

BLS also recently compiled consumer economic information for all of 2018 and found that spending rose 1.9%. During the same period the Consumer Price Index (CPI-U) rose 2.4% percent, but average pretax income increased by 6.9%. Two bright spots: healthcare expenses rose only 0.8% while education costs fell 5.6%.

STOCK OWNERSHIP

If you're wondering how many Americans own stock, Gallup has the answer. The research firm found that 55% of Americans owned stock in April 2019, in line with the previous few years, but well below an average of 62% pre-recession from 2001 to 2008.

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