9 Things to Be Thankful for in 2013
The government in Washington may not work anymore, college costs are rising, traffic keeps getting worse, a million bucks may not be enough to enjoy a comfortable retirement anymore — and, heck, then there's the botched Obamacare rollout that's got us all down, one way or the other.
But consider the bright sides — and there are plenty of them. Every year at this time, we at Kiplinger like to celebrate some of the things going right in the world, sharing with you key insights and news that we have uncovered and analyzed over the course of the year. Here are nine developments we hope will make your holiday feasts a little tastier this year. Happy Holidays!
The 5-Year Bull Market Still Has Room to Run
The Dow is trading above 16,000 for the first time, an all-time high, and Standard & Poor's 500-stock index is up more than 25% this year (including dividends). Kiplinger sees another year of gains of 10% in 2014, supported by stronger economic and corporate underpinnings and, just as important, improving sentiment among investors.
A 10% gain in 2014 would put the S&P 500 in the vicinity of 1,900 and the Dow at more than 17,000. With dividends, returns could reach 12% next year. That will boost portfolios across America, from college savings to retirement accounts.
The U.S. Is Close to Energy Independence
- The country will surpass Russia and Saudi Arabia as the world's largest oil producer by 2015, thanks to the development of huge oil-shale reserves in the Midwest and West, the Paris-based independent forecasting group IEA forecasts.
- The gains won't end with fossil fuels. U.S. solar-power production grew 150% last year and is expected to double again this year. Increased use of solar panels and wind turbines in recent years is starting to pay dividends in the form of rising clean energy power generation. Meanwhile, gains in wind energy mean output will soon rival that from hydroelectric dams, long a power-grid mainstay.
For the U.S., Hurricanes Laid Low
The 2013 hurricane season came and went, and the United States still hasn't been struck by a Category 3 or larger storm since 2005. That's the longest streak without a major storm slamming the U.S. with winds of 111 miles per hour or higher since meteorologists first started tracking hurricanes around 1900, according to LiveScience.com.
Of course, that's no comfort to the victims of Sandy, the super-storm that struck New York City and New Jersey in 2012, killing more than 150 people and causing $50 billion in damages. And it's no comfort to those in the Philippines devastated by the recent typhoon. But it's a reminder to residents of most of the Atlantic and Gulf coasts to count their blessings.
Retirement Contribution Limits Have Never Been Higher
The maximum you can contribute to a 401(k), 403(b), most 457s or the federal government's Thrift Savings Plan rose to $17,500 in 2013, from $17,000 in 2012. For both traditional IRAs and Roths, the maximum you can contribute rose to $5,500 from $5,000. Kiplinger's Kim Lankford covers it all here: 2013 Retirement Account Contribution Limits.
- The higher contribution levels, along with the surging market, have added up to a new record average 401(k) account balance ($84,300) for U.S. workers, according to Fidelity.
Flexible-Spending Accounts Are More Flexible Than Ever
An FSA, set up through your employer, allows you to pay medical expenses with pretax dollars, up to $2,500 a year. In the past, you would lose any money in the account that you hadn't used by December 31 (or March 15 of the following year, if your employer offered a grace period).
This use-it-or-lose-it provision scared off some people from participating in FSAs, and it prompted some people who did have accounts to make last-minute dental or vision appointments they didn't really need. Under new rules recently announced by the Treasury and IRS, employers can allow workers to carry over up to $500 in their accounts from one year to the next. Employers can choose to make this change before the end of 2013. Kim Lankford explains the change in more detail here: Big Change to Flexible Spending Accounts.
Greater Financial Security for Gay Couples
For same-sex couples married in a jurisdiction where such unions are legal, this year's Supreme Court ruling opens the door to more financial benefits, including: Social Security spousal and survivor benefits and other claiming strategies to maximize total household benefits; special protections for a spouse when it comes to company retirement plans; beneficial income, gift and estate tax rules; and much more. See Married Same-Sex Couples Get Equal Access to Benefits for details.
We're Feeding Ourselves for Less
- Americans are buying more food, but spending less of their total income to feed themselves and their families. Sales in 2013 are up 4.8%, versus typical annual gains of less than 3%, reflecting economic growth and rising consumer confidence. Meanwhile, the share of spendable income used for food is expected to be an even 11% this year or next, down from 12% in the '90s.
Safer Grapefruits for Those Taking Cholesterol-Fighting Drugs
University of Florida researchers say they've isolated a gene in pomelos, the citrus fruit from which grapefruit was developed, that vastly reduces levels of furanocoumarins, the stuff in grapefruit that counteracts the benefits of anti-cholesterol medications. The research is likely to lead in a few years to a grapefruit that those taking such medications can eat without fear of adverse effects.
On the Horizon: The Ultimate Flyswatter
- Scientists are experimenting with a virus that attacks the salivary glands of flies, stopping females from laying eggs and males from mating. Researchers are looking for the best ways to infect flies en masse on farms or in other livestock settings to get optimum population control.