NEW YORK If you're reading this article after Dec 21, the Mayans got it wrong. The world is still here.
But there's still plenty to worry about, financial experts say. Below are excerpts of what the top money professionals told Reuters Money about their concerns for consumers in 2013:
JOHN ULZHEIMER, PRESIDENT OF CONSUMER EDUCATION AT SMARTCREDIT.COM:
Over the past two years, the terms for most credit cards have been changed to variable rates tied to the prime rate from fixed rates. If a variable rate is tied to an index, the credit card issuer doesn't have to notify you.
It's a mathematical certainty that the prime rate will go up; it can't go any lower. So, any debt incurred from that date going forward will be more expensive than you're already paying, which is already too much.
ANISHA SEKAR, VICE PRESIDENT OF CREDIT AND DEBIT PRODUCTS FOR NERDWALLET.COM:
My major focus of concern is transparency. Overdraft fees and prepaid debit cards are confusing, and consumers may not be able to take in their disclosures in a way that is meaningful. I'd like to see a focus on presenting information in a way that consumers can understand.
GREG MCBRIDE, SENIOR FINANCIAL ANALYST AT BANKRATE.COM:
Despite an obvious bubble in bonds, there is still a lot of money moving into them, even though equities are showing better valuations. Investors are still very risk-averse. The point at which investors start to embrace risk is going to be at the wrong end of the economic cycle. It will happen too late to benefit the economy.
MARILYN COHEN, MONEY MANAGER AND EDITOR, "BOND SMART INVESTOR":
The bond markets aren't as deep as they once were, so who is going to be the ultimate buyer of bonds when a big sell-off repricing occurs? There are new rules based on how much proprietary trading can go on; if there are massive liquidations in high-yield bond funds, who are you going to call?
SVENJA GUDELL, SENIOR ECONOMIST FOR ZILLOW:
After a pretty good 2012, I have been sleeping fairly well, but of course there are still risk factors. One of the biggest ones is negative equity. Currently 28.2 percent of homes are still underwater, that's going to cast a fairly long shadow.
STUART RITTER, SENIOR FINANCIAL PLANNER AT T. ROWE PRICE:
Auto-enrollment in retirement plans gets people to save, but it doesn't get them to 15 percent of their income, which means they face a radically curtailed lifestyle in retirement.
Right now, people are typically saving 3 percent, 4 percent or somewhere around the plan sponsor's match formula. That's just not enough to live on in retirement.
All the research shows that plan design is a powerful signaler to people. They are looking to their employer for guidance on what to do. We need to make sure they have auto-increases in their plans to get them to that 15 percent number.
ALISON BORLAND, AON HEWITT'S VICE PRESIDENT OF RETIREMENT STRATEGY:
What keeps me up at night is tax reform. The reason is that retirement plans are such a huge percentage of accounts. I'm very concerned that they are going to be a target at the expense of the future financial security of American workers.
CARRIE MCLEAN, SENIOR MANAGER, CUSTOMER SERVICE & RETENTION AT EHEALTHINSURANCE:
With the Supreme Court decision and the Presidential election, the fate of the Affordable Care Act is no longer an issue. But is there enough awareness? We take thousands of calls from consumers, and what comes up is that people think that the big part of healthcare reform takes place in January 2013.
We see people applying for health insurance now and getting declined, sometimes because of pre-existing conditions, and they are wondering why that is still happening. I feel like my hands are tied because so many people just don't understand it.
KATHY PICKERING, EXECUTIVE DIRECTOR OF THE TAX INSTITUTE AT H&R BLOCK INC:
The main thing that's keeping us up at night is the uncertainty - not knowing what's coming from the fiscal cliff negotiations.
(Outside of the fiscal cliff) one of the things we're really trying to prepare our clients for is the implementation of health care. We know it's here to stay. Now people really do need to get ready for it.
This coming year is a critical moment in time - your 2012 tax return will be the defining record of your income, which will help determine your eligibility for a health care subsidy. So we need to start talking to people about the tax implications of health care and helping them get ready to make those decisions for themselves.
BOB MEIGHAN, VICE PRESIDENT AT TURBOTAX, OWNED BY INTUIT, AND A CERTIFIED PUBLIC ACCOUNTANT:
Come January 1st, 140 million taxpayers will be thinking about their tax return.
I worry about people overlooking valuable deductions and credits. For example, the earned income tax credit is overlooked by 20 percent of all taxpayers. That credit can be worth up to $3800. It's unfortunate that the credit ... is also one of the most difficult to compute if you're doing it manually.
MARK KANTROWITZ OF FINAID.ORG:
Short-sighted steps to cut spending will ultimately hurt college access and completion, especially if changes are implemented without adequate testing and analysis.
The failure of grants to keep pace with increases in college costs is shifting more of the burden of paying for college onto the backs of students and their families. This is making college less affordable and causes increases in the average debt at graduation. More graduates (and dropouts) are struggling to repay their loans. The new income-based repayment plan, Pay as you Earn, will help, but not all borrowers are aware of their options.
Given that college graduates pay more than twice the federal income tax of high school graduates, we should be increasing spending on student aid (especially grants), not cutting it.
HOWARD LINZON, CO-FOUNDER AND CEO OF STOCKTWITS, A SOCIAL NETWORK FOR INVESTORS AND TRADERS:
Taxes and the government worry me the most. Taxes aren't going to solve our problems. I worry about the government because we are over-supervised, in general, but under-supervised in financials. There hasn't been any change yet in that behavior.
I'm hoping we are near the end in this cycle. If not, there's a lot of pain ahead. People will save more instead of spend more, which doesn't help the economy. They will just hoard.
TOM LYDON, EDITOR, ETF TRENDS:
The Securities & Exchange Commission recently announced that they'll be lifting the freeze on active exchange-traded funds that use derivatives. This may open the floodgates for new active entries into the ETF market from fund companies that missed the boat during the initial growth stage of ETFs.
Will American Funds and T. Rowe Price make a huge splash in the ETF world? Probably not, but we're going to have to watch as many big-name firms take a stab at it.
(Reporting by Linda Stern, Lauren Young, Chelsea Emery, Beth Pinsker Gladstone, Heather Struck; Editing by Bernadette Baum)