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Gen Z women are driving spending trends on TikTok.
A larger share of Gen Z women, 75%, use TikTok compared to their male counterparts, 62%, according to a report by Morning Consult.
“TikTok is a Gen Z women-centric app, and it is setting the tone and the narrative for what is ‘hot’ online,” said Ellyn Briggs, a brands analyst at Morning Consult.

Young people using cellphones.
Filippobacci | E+ | Getty Images

Gen Z women are driving spending trends on TikTok.
Women in their 20s spend more time on the short-form video app than male peers of their generation, and it’s exposing them to a financial risk.

“TikTok is a Gen Z women-centric app, and it is setting the tone and the narrative for what is ‘hot’ online,” said Ellyn Briggs, a brands analyst at Morning Consult.
The issue: More time on the app drives increased connection to influencers, online figures who create aspirational content that resonates with their viewers.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

Many influencers post “haul” videos showing products they recently purchased, often from a specific brand. Their ability to spend can be misleading, experts say. Although the influencers are often within the same age group as their audience, many earn a high income from their platforms and brand deals or receive free products.
“The bigger conversation is just how impactful our digital lives are on our real lives,” said Briggs. “TikTok is driving consumption patterns in a very real way.”
TikTok has significant influence on how the young generation spends its money, with #TikTokmademebuyit garnering more than eight billion views, Morning Consult found in February. A larger share of Gen Z women, 75%, use TikTok compared to their male counterparts, 62%, a separate Morning Consult report found.

Social media is Gen Z’s ‘keeping up with the Joneses’

In a way, social media is “the current, younger generation’s version of keeping up with the Joneses,” said certified financial planner Shaun Williams, partner and private wealth advisor of Paragon Capital Management based in Denver. The firm is ranked No. 57 on the 2023 CNBC FA 100 list.
Baby boomers were able to keep up with “the Joneses” because the generation often primarily saw shopping habits from socioeconomic peers in their neighborhood, Williams said. 

Stay out of credit card debt. It’s so much easier to get started on the other things if you’re not starting in a hole.

Sophia Bera Daigle
certified financial planner

Social media platforms such as TikTok take the concept to a different level, especially for Gen Z. It’s easy to be overpowered by FOMO, or the fear of missing out, despite economic pressures such as a high cost of living.
Nonmortgage debt among Gen Zers rose 99.3% between March 2021 and the first quarter of 2023, according to LendingTree. Younger consumers’ debt added up to an average of $10,797. The age group’s balances spiked for personal loans and credit card balances, rising $1,292 and $1,771, respectively.
The site analyzed more than 150,000 anonymized credit reports from the first quarter of 2023 and 87,000 from March 2021.
The best thing someone in their 20s can do for themselves is to “stay out of credit card debt,” said Sophia Bera Daigle, a CFP and the founder of Gen Y Planning in Austin, Texas.
“It’s so much easier to get started on the other things if you’re not starting in a hole,” Daigle said, who is a member of the CNBC FA Council.

Two money guardrails for women in their 20s

Experts say it’s important for young women in their 20s to remember the following two things when it comes to observing their contemporaries exhibiting expensive lifestyles:
1. Signs of wealth can be misleading
Someone who shows their wealth in what they own or wear only shows you what they spent, not what they have invested or saved.
“When you see signs of wealth, that is not someone who’s wealthy: It’s spent, it’s gone,” said Williams.
Additionally, you have no way of knowing how people on the internet are affording their lifestyles.
Influencers on TikTok, Instagram and other platforms may be sponsored by private companies to get others to buy into the products or experiences. “They’re not actually always spending their own money” on the items they promote, Williams said, no matter how they finance the rest of their lifestyle.

2. Think of your long-term plans
Women can have a tougher time getting ahead financially because of hurdles such as the wage gap. In 2022, women earned 78 cents for every dollar men made, according to the National Partnership for Women and Families.
While social media can entice people to spend beyond their means, you might find that it helps to remind yourself of more powerful ways to use that money, whether that is investing in a retirement account, building emergency savings or preparing for other goals, Daigle said.
“Laying the groundwork in your 20s is wonderful so that in your 30s, you can really turbocharge your financial goals,” she said.Don’t miss these stories from CNBC PRO: More

Some of the largest money market funds are paying over 5%, and investors could see a higher tax bill in April.
However, investors may consider other options like Treasury bills or municipal money market funds to save on future taxes.

Eric Audras | PhotoAlto Agency RF Collections | Getty Images

If you’ve poured cash into money market mutual funds, you could see a higher 2023 tax bill in April. But other investments could reduce your 2024 taxes, experts say.
Investors and institutions have funneled cash into money market funds amid rising interest rates, and balances reached $5.84 trillion as of Nov. 29, the Investment Company Institute reported. Meanwhile, some of the largest money market funds are now paying close to 5.5%, as of Dec. 4, according to Crane Data.

Money market fund yields are higher than any year since the Great Recession, said certified financial planner Seth Mullikin, founder of Lattice Financial in Charlotte, North Carolina. “For most investors, this will be taxable income,” he said.
More from Personal Finance:There is still time to reduce your tax bill or boost your refund before year-endSocial Security benefits are reduced for public workers. Here’s how to planMoney market funds may deliver a surprise tax bill amid higher yields
Investors typically owe regular income taxes on earnings from money market mutual funds or high-yield savings accounts, with top marginal rates of 37% for assets held in a brokerage account. By comparison, the highest long-term capital gains rate is 20%.

Plus, boosting your income can have other financial consequences, such as higher premiums for Medicare Part B and D, known as the income-related monthly adjustment amount, or IRMAA, Mullikin said.
“While any additional income earned from higher yields is taxed at a progressively higher rate, IRMAA applies as a surcharge,” he said. “This means that even $1 of additional income could trigger higher premiums.”

However, other investment options could help minimize the tax burden, financial experts say.

Tax-friendly options for cash

If you have a sizable amount of cash, you may consider Treasury bills, according to Catherine Valega, a CFP with Green Bee Advisory in the greater Boston area.
With terms ranging from one month to one year, most Treasury bills, known as T-bills, are currently paying well over 5%, as of Dec. 4. You can buy T-bills through TreasuryDirect or a brokerage account.
However, T-bills offer a tax benefit over products like high-yield savings, certificates of deposit or money market funds: no state or local taxes on earnings. T-bill interest is still subject to federal income taxes.  

Another option is tax-exempt municipal money market funds, according to Kirk Hackbarth, a CFP and wealth advisor at JMG Financial Group in Milwaukee. He is also a certified public accountant. 
Municipal bonds typically invest in assets issued by municipalities, such as state and local governments, and investors generally avoid federal income taxes on earnings. Some of the biggest tax-exempt money market funds are paying around 3.5%, as of Dec. 4, according to Crane Data.
“Investors in a higher marginal income tax bracket should consider municipal money market mutual funds,” Hackbarth said. “The after-tax yield can be higher.”
However, the best option for cash ultimately depends on your risk tolerance and goals, experts say.
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The new federal college financial aid application will roll out on or before the last day of the year.
The simplified FAFSA is meant to improve access, but the delay has caused confusion and irritation, experts say.
Here’s what you can do now to avoid additional problems.

For many families, financial aid is key when it comes to paying for college.
But students must first fill out the Free Application for Federal Student Aid to access any assistance. And this year, the FAFSA has been significantly delayed.

For the 2024-2025 school year, a new, streamlined FAFSA form will be available on or before Dec. 31, 2023, up to nearly three months later than in previous years. The Education Department said it plans to return to an Oct. 1 start date next year.
“The irony is they are changing the FAFSA to make it simpler and easier but in doing that, you’ve created a problem,” said Mary Morris, CEO of Virginia529, one of the largest 529 plans in the country. For families trying to navigate the process, a new formula and the delay are “intimidating and scary and annoying.”
More from Personal Finance:Fewer students are enrolling in collegeWhat to consider before refinancing a student loanStudent loan borrowers should be aware of scams
The FAFSA serves as the gateway to all federal aid money, including loans, work study and grants. Grants are the most desirable kinds of assistance because they typically do not need to be repaid.
In ordinary years, high school graduates miss out on billions in federal grants because they don’t fill out the FAFSA. 

Many families mistakenly assume they won’t qualify for financial aid and don’t even bother to apply. Others say a lengthy and overly complicated application is a major hurdle.
The plan to simplify the FAFSA has been years in the making. In 2020, the Consolidated Appropriations Act was passed to streamline the process. Those changes are finally going into effect.

Why it’s important to file the FAFSA early

Despite the delay, it’s still advantageous for students to file the FAFSA as soon as they can, according to Rick Castellano, a spokesperson for Sallie Mae.
The earlier families fill out the form, the better their chances are of receiving aid, since some financial aid is awarded on a first-come, first-served basis, or from programs with limited funds.
It’s possible there will be technical issues when the new form finally becomes available online, particularly if there is a surge in traffic to the site, Castellano said. However, that shouldn’t prevent families from completing the FAFSA in the days that follow, he added.
“While there may be some hiccups along the way, students and families should do what they need to do to file as soon as possible,” he said.

What’s changed with the new FAFSA

Not only has the timing changed but the simplified form now also uses a calculation called the “Student Aid Index” to estimate how much a family can afford to pay.
Historically, many factors, not just income, go into how much aid students receive, including the total number of people in the household and the number of children in college, as well as other financial commitments such as a home equity loan or child support payments.
Now, the formula will pull federal tax information directly from the IRS and slims 108 questions down to less than 50.

Going forward, the Department of Education will no longer give families a break for having multiple children in college at the same time, effectively eliminating the “sibling discount.”
“The elimination of the multiple student adjustment is one of the many tectonic changes under FAFSA simplification that will take full effect beginning with the 2024-2025 academic year,” Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College,” recently told CNBC. 
Up until now, “the multiple student adjustment has been the single most important data element affecting one’s eligibility for federal student aid,” Chany said.
At the same time, the new FAFSA will raise the family income threshold, making more students eligible for federal need-based aid.

More than half a million additional students will qualify for a Pell Grant, a type of aid available to low-income families, according to higher education expert Mark Kantrowitz. And of those that qualify, more than 1.5 million will qualify for the maximum amount.
Currently, the maximum Pell Grant award is $7,395.
Under the new system, more students will have access to federal grants, but some — likely wealthier — students will miss out on the sibling discount, according to Kantrowitz.

What students can do now to get ready

For students who feel pressured by having to submit college applications without knowing how much the schools will cost them, the Federal Student Aid Estimator can provide an early estimate of what a student’s federal aid could be after submitting the new form.
To facilitate the student aid calculations, “get your financial house in order,” Virginia529′s Morris advised. Students and families should have their tax forms ready and create a StudentAid.gov account along with a Federal Student Aid ID, which is needed to input and access your information online.
Then, follow Federal Student Aid on social media for upcoming announcements, including an alert when the new FAFSA form is available to complete.
This is also a good time to consider other sources for merit-based aid, Morris added, by searching websites such as Scholarships.com and the College Board.
There are more than 1.7 million private scholarships and fellowships available, often funded by foundations, corporations and other independent organizations, with a total value of more than $7.4 billion, according to Kantrowitz.
Finally, there are plenty of free resources to help guide families through the updated FAFSA process. “Know that there is assistance out there, and just don’t give up,” Morris said. “It will be worth it in the long run.”
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A Home Depot location in Encinitas, California.
Mike Blake | Reuters

With the late 2023 rally underway, investors can bolster their portfolios by adding a select group of dividend payers into the mix.
Dividend-paying stocks give investors a combination of potential price appreciation and income, which can enhance total returns.

Bearing that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Energy Transfer

First on this week’s list is Energy Transfer (ET), a limited partnership that operates a diversified portfolio of energy assets in the U.S., with nearly 125,000 miles of pipelines. ET recently completed its acquisition of Crestwood Equity Partners.
In October, ET declared a quarterly cash distribution of $0.3125 per common unit for the third quarter, which was paid on Nov. 20. The stock has a dividend yield of 9%.
Commenting on the third-quarter results, RBC Capital analyst Elvira Scotto said that Energy Transfer delivered a solid performance, with adjusted earnings before interest, taxes, depreciation and amortization exceeding the consensus estimate by 7%. The analyst also noted the increase in the 2023 midpoint adjusted EBITDA outlook by $300 million.
Scotto expects the Crestwood acquisition to offer commercial synergies. Further, she pointed out that ET intends to maintain a strong balance sheet, aiming for leverage of 4.0-4.5x debt/EBITDA. Also, ET aims to continue to return cash to unitholders via increased distribution and potential buybacks.  

“With high return growth projects, accretive acquisitions and its integrated asset footprint across hydrocarbons and basins, we believe ET can generate significant cash flow in the coming years,” said Scotto.
Scotto increased her price target on Energy Transfer to $19 from $18 and reiterated a buy rating, calling the stock a compelling investment opportunity. She ranks No. 54 among more than 8,700 analysts tracked by TipRanks. Her ratings have been profitable 65% of the time, with each delivering an average return of 18.1%. (See Energy Transfer Insider Trading Activity on TipRanks) 

Sunoco LP

Scotto is also upbeat about another limited partnership: Sunoco (SUN), one of the leading motor fuel distributors in the U.S.
For the third quarter, Sunoco announced a quarterly cash distribution of $0.8420 per unit, paid on Nov. 20. The company’s dividend yield stands at 6.3%.
After Sunoco posted its quarterly results, Scotto raised the price target for SUN stock to $57 from $51 to reflect a higher earnings outlook. The analyst reiterated a buy rating, saying that the company’s volumes and margins surpassed her estimates.  
The analyst thinks that the company’s scale, procurement ability and lower cost structure compared to the industry enable it to deliver beyond the industry’s breakeven margin.
“SUN continues to maintain a strong balance sheet exiting 3Q23 with leverage of 3.9x and total liquidity of $1.1BN, which provides SUN with significant financial flexibility to pursue growth opportunities including acquisitions.”
Overall, Scotto remains bullish on Sunoco due to its solid cash flows and focus on breakeven margins and expense management. (See Sunoco Hedge Funds Trading Activity on TipRanks) 

VICI Properties

Our next dividend stock is VICI Properties (VICI), a real estate investment trust. VICI owns a solid portfolio of gaming, hospitality, and entertainment properties, including the properties of the iconic Caesars Palace Las Vegas and MGM Grand.
For the third quarter, the company declared a cash dividend of $0.415 per share, reflecting a 6.4% increase. VICI offers a dividend yield of 5.4%.
In a recent research note, Stifel analyst Simon Yarmak, who ranks 573rd out of more than 8,700 analysts tracked by TipRanks, reiterated a buy rating on VICI stock and called it one of his top ideas in the North American triple-net REITs sector.
Yarmak noted that VICI has performed well in both gaming and non-gaming categories. He added that VICI’s tenants remain in a strong position.
“VICI has negotiated favorable escalators in its leases, which provide strong internal growth. Many of these escalators are linked to uncapped CPI growth (50.0% of rent) and, therefore, VICI should benefit from meaningful lease escalations in the above-average inflationary environment,” noted Yarmak.
The analyst estimates that lease escalations would generate about $71 million of incremental rent in 2024, which was not captured in the 2023 results. He expects VICI to post some of the best year-over-year growth in 2024 in the triple-net sector, with nearly 4.5% to 5.0% adjusted funds from operations growth.
Yarmak’s ratings have been successful 54% of the time, with each one delivering an average return of 8%. (See VICI’s Options Activity on TipRanks)

Home Depot

We move to home improvement retailer Home Depot (HD). The company exceeded analysts’ fiscal third-quarter estimates despite a decline in sales due to pressure in certain big-ticket, discretionary categories. However, the company narrowed its full-year outlook due to macro pressures.
For the third quarter, the company declared a cash dividend of $2.09 per share, payable on Dec. 14. HD’s dividend yield stands at 2.6%.
Following the fiscal third-quarter results, JPMorgan analyst Christopher Horvers lowered the price target for HD stock to $318 from $332 but maintained a buy rating, saying that Home Depot is managing well against a tough backdrop.
The analyst thinks that management’s tone was less optimistic versus the second quarter but not worse than the first quarter. While the home improvement category is expected to remain under pressure in the first half of 2024, comparable sales are projected to recover in the second half.
“We believe HD remains one of the best long-term stories in retail given company-specific sales and margin initiatives, the duopoly/AMZN-resistant nature of the industry, and significant financial and operating leverage that amplifies EPS growth in better sales environments,” said Horvers.
Horvers ranks No. 520 among more than 8,700 analysts on TipRanks. His ratings have been profitable 61% of the time, with each delivering an average return of 8%. (See Home Depot’s Technical Analysis on TipRanks)

Walmart

We finally look at big-box retailer Walmart (WMT). Earlier this year, the company announced a 2% increase in its annual dividend per share to $2.28. This marked the 50th consecutive year of dividend hikes for the company, giving Walmart the tag of a dividend king. The stock offers a dividend yield of 1.5%.
Recently, the retailer beat analysts’ fiscal third-quarter earnings and sales expectations. However, it cautioned investors about subdued consumer spending.  
Following the print, Guggenheim analyst Robert Drbul reaffirmed a buy rating on the stock with a price target of $180. The analyst noted that Walmart witnessed solid traffic growth across physical stores and digital channels. He increased his full-year sales estimates to reflect upbeat Q3 performance but maintained his fiscal 2024 and 2025 adjusted earnings per share estimates due to additional expense pressures. 
“We continue to believe Walmart is well positioned in an uncertain macro environment with its price and value proposition and with increased convenience and assortment,” said Drbul.   
The analyst added that given the stock’s 1.5% dividend yield and the fact that it’s trading at 22.3 times his fiscal 2025 EPS estimate of $7, WMT stock offers something for income, value and growth investors.
Drbul holds the 652nd position among more than 8,700 analysts on TipRanks. His ratings have been successful 59% of the time, with each delivering an average return of 5.9%. (See Walmart’s Financial Statements on TipRanks). More

Year-end Planning

With just a few weeks left in 2023, there’s still time to slash your tax bill or boost your refund, experts say.
You can reduce adjusted gross income by increasing pretax 401(k) plan contributions or bunching charitable distributions.
You may also weigh post-year-end strategies such as individual retirement account or health savings account contributions.

Vesna Andjic | E+ | Getty Images

With roughly one month left in 2023, there’s still time to reduce your tax bill or boost your refund, experts say.
Typically, you can expect a federal refund when you overpay annual taxes or withhold more than the total owed. The average refund for 2023 was $3,054, as of Oct. 27, according to the IRS.

“Start organizing your tax-related documents now,” said certified financial planner Akeiva Ellis, co-founder and financial coach at The Bemused in the Boston area. “Waiting until April can lead to unnecessary stress.”

More from Year-End Planning

Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

Here are some tax strategies to consider before the calendar winds down, according to financial experts.

1. Boost pretax 401(k) contributions

This is especially important if you’re not maximizing employer matching funds or if you could benefit from a reduction in taxable income.

Akeiva Ellis
Co-founder and financial coach at The Bemused

“This is especially important if you’re not maximizing employer matching funds or if you could benefit from a reduction in taxable income,” said Ellis.

By adjusting 401(k) plan deferrals now, the change could go into effect before you receive a year-end bonus, which could reduce earnings and pad retirement savings.

2. Consider ‘bunching’ donations

Taxpayers claim either the standard deduction or total itemized deductions, whichever is bigger, and the latter category includes charitable and medical deductions, along with state and local taxes and more.
In 2018, the Tax Cuts and Jobs Act nearly doubled the standard deduction, slashing the number of filers who itemized. For 2023, the standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly.
“Even for our wealthier clients, many of them are no longer itemizing deductions,” said Robert Dietz, national director of tax research at Bernstein Private Wealth Management in Minneapolis.

One solution, “bunching deductions,” aims to accelerate expenses, such as charitable donations, into a single year, aiming to exceed the standard deduction thresholds, Dietz said.
While nonelective medical costs can be difficult to control, bunching charitable donations is common, especially for so-called donor-advised funds, which offer an upfront deduction and act like a charitable checkbook for future gifts.  

3. Make the most of your tax bracket

Before completing a year-end strategy that adds to your income, you should see if you can afford to “run up the income tax brackets,” Dietz said. Typically, this involves a tax projection to see how much more income you can receive in your current bracket.
For example, you can use this strategy if you’re weighing a year-end partial Roth individual retirement account conversion or required minimum distributions from an inherited IRA, he said. 
It’s also smart to know your tax bracket when deciding whether to defer income — such as a bonus or capital gains — into 2024.

4. Weigh strategies that stretch into the new year

Most tax planning must be complete by Dec. 31, but there are a few ways to trim your tax bill between Jan. 1 and the federal tax deadline. If you’re short on cash, these could wait until early 2024.

Pretax IRA contributions: You can still make up to $6,500 in pretax IRA contributions ($7,500 for age 50 and older) for 2023, which may offer a deduction. However, you need to check IRA tax break eligibility first.
Health savings account contributions: You can also save up to $3,850 (or $7,750 for family plans) in a health savings account, which offers a “triple threat” for tax breaks, noted Louise Cochrane, a certified public accountant and enrolled agent in Alameda, California. You can claim an upfront deduction, tax-free growth and tax-free withdrawals for qualified medical expenses.   More

A vehicle refuels at a Phillips 66 gas station in Rockford, Illinois, U.S., on Monday, July 29, 2019.
Daniel Acker | Bloomberg | Getty Images

Company: Phillips 66 (PSX)

Business: Phillips 66 is an energy manufacturing and logistics company. It operates through the following segments: midstream, chemicals, refining, and marketing and specialties. The midstream segment provides crude oil and refined petroleum product transportation and processing services, as well as natural gas and natural gas liquids transportation, storage, fractionation, gathering, processing and marketing services. The chemicals segment consists of Phillips 66’s 50% equity investment in Chevron Phillips Chemical (CPChem), which manufactures and markets petrochemicals and plastics on a worldwide basis. The refining business refines crude oil and other feedstocks into petroleum products, such as gasoline, distillates and aviation fuels, as well as renewable fuels, at 12 refineries in the U.S. and Europe. The marketing and specialties segment purchases for resale and markets refined petroleum products and renewable fuels.
Stock Market Value: $57.06B ($129.70 per share)

Activist: Elliott Investment Management

Percentage Ownership:  n/aAverage Cost: n/aActivist Commentary: Elliott is a very successful and astute activist investor. The firm’s team includes analysts from leading tech private equity firms, engineers, operating partners – former technology CEOs and COOs. When evaluating an investment, the firm also hires specialty and general management consultants, expert cost analysts and industry specialists. The firm often watches companies for many years before investing and has an extensive stable of impressive board candidates. Elliott has historically focused on strategic activism in the technology sector and has been very successful with that strategy. However, over the past several years its activism group has grown and evolved, and the firm has been doing a lot more longer-term activism and creating value from a board level at a much larger breadth of companies. The firm’s activism has always been well thought out and the detailed analysis it presented here is evidence of that.

What’s happening

Behind the scenes

Activist investors like to claim that they are “amicable” or “constructive.” While we do not generalize like that, it is hard to imagine a more amicable and constructive activist campaign than what Elliott is proposing at Phillips 66.
Phillips 66 has underperformed peers Valero Energy and Marathon Petroleum by 45% and 191%, respectively, over the past three years and by 163% and 248%, respectively, over the past 10 years. Elliott thinks this can largely be attributed to the company’s shift in focus away from the refining segment and management’s poor execution in cost reductions, which has led to a loss of investor confidence.
Since his elevation to CEO in July 2022, Mark Lashier has committed to a strategic outlook that includes refocusing on the refining segment, cutting costs, targeting $14 billion of mid-cycle earnings before interest, taxes, depreciation, and amortization by 2025, selling $3 billion of non-core assets and increasing the company’s long-term capital return policy. Elliott wholeheartedly agrees with this plan and thinks it could lead to a $205 stock price. The first part of an activist campaign, convincing management that your plan is better than theirs, is already done here. The only thing activists like more than a management team agreeing with the activist’s plan is a management team that has its own plan that the activist agrees with.

But communicating a plan to the market is one thing, getting investors to believe that you can execute is entirely another. There has been a lack of shareholder trust here, much of which stems from the company’s AdvantEdge66 program in 2019, aimed at reducing costs. When implemented, Phillips 66 saw costs increase relative to peers, burning shareholders’ confidence in the management team’s ability to achieve its goals. The first step in rebuilding management credibility would be adding new directors to the board, particularly at the request of a shareholder. If those directors happened to have refining operations experience, that would give investors even more confidence that management is shifting their focus back to the refining business.
Elliott has significant experience in partnering with industry experts and has already identified candidates here with relevant expertise to fill two board seats. Elliott is not asking for a board seat for itself to debate with management. The firm is asking for two seats for two industry executives who would put management in the best position to execute on their plan. The best activists use board seats to support management in executing their plan, but they also will hold management accountable if they are unable to do so.
That is where Elliott’s plan B comes into play. If Phillips 66 adds two new directors approved by Elliott and still cannot deliver on performance targets over the next year, then it will need to take a path like the one Marathon Petroleum took in its transformation. This will include making appropriate management changes, closing the current $2 to $3 per barrel refining EBITDA gap between Phillips 66 and Valero and generating $15 billion to $20 billion from the sale of non-core assets, including their CPChem stake, European convenience stores and a portion of non-operated midstream stakes.
This should be an easy decision for the company, and we would expect it to quickly appoint two new directors identified by Elliott to the board. Given the tone and substance of Elliott’s outreach, it would be very surprising and disappointing to see this go to a proxy fight. However, if it did, we believe Elliott would be a lock to get at least two board seats on the 13-person board, particularly with the use of a universal proxy card.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.  More

Your Money

Workers who earn both pensions and Social Security may have their benefits reduced based on current rules.
That may come as a surprise to some workers and their families.
Here’s what beneficiaries need to know about the risk of overpayments and how they may gauge their income in retirement.

Richard Stephen | Istock | Getty Images

When Joyce Debnam’s husband passed away, she began receiving $1,400 a month in Social Security survivor benefits.
Eight months later, that income unexpectedly changed. The trigger: Debnam retired from her job at the United States Postal Service in 2013 after four decades of service.

That life change prompted Debnam’s Social Security benefits to be cut to just $174 a month. Moreover, the Social Security Administration notified her she had to return $5,000 in benefits she had been overpaid.
“When I got that letter, I almost hit the floor,” Debnam said.
She was particularly surprised because before her retirement, Debnam had contacted the Social Security Administration to let them know she was retiring and asked whether that would affect her monthly checks.
“They told me no, that I was eligible for retirement and I would get my money,” Debnam said.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

Today, Debnam, 80, of Suitland, Maryland, has paid back the $5,000 sum and relies almost exclusively on her postal pension to pay bills, which means her other retirement goals such as traveling or fixing up her home are not possible.

Debnam is one of millions of workers who is affected by Social Security rules related to public workers and reductions in the benefits they are eligible to receive.

How rules affecting public employees work

The Windfall Elimination Provision, or WEP, reduces benefits for people who receive a pension from work where they did not pay into Social Security and also had fewer than 30 years of substantial employment or covered employment.
About two million people, or 3% of Social Security beneficiaries, were affected by the WEP as of December 2022, according to the Congressional Research Service.

Far too often, people are unaware that they are subject to the WEP or GPO until their spouse retires.

Rep. Mike Carey

Another rule, the Government Pension Offset, or GPO, reduces the spousal, widow or widowers’ benefits for people who also receive pensions from government work not covered by Social Security.
About 734,601 Social Security beneficiaries were affected by the GPO as of December 2022.

Many pension-eligible workers are unaware of rules

Like Debnam, many workers are surprised to find their benefits are reduced when they are counting on that income.
“These policies make it difficult for affected workers and their families to plan for retirement,” Rep. Mike Carey, R-Ohio, said during a recent House Ways and Means subcommittee hearing on the rules in Baton Rouge, Louisiana.
“Far too often, people are unaware that they are subject to the WEP or GPO until their spouse retires,” Carey said.
This prompts some people to return to work, while others adjust their spending habits or change their standard of living, he noted.
“Even for public servants who are aware of these policies, the complexities of these formulas makes it difficult to determine the Social Security benefits that they will eventually receive,” Carey said.

Congress is considering ways to address these rules. One proposal, the Social Security Fairness Act, calls for eliminating both the WEP and GPO altogether. The bicameral, bipartisan bill has the support of a majority of House lawmakers, with 300 co-sponsors.
Professional organizations, such as the American Postal Workers Union, and others representing police, firefighters and teachers, support the change.
Experts say it will be difficult to come up with a solution that compensates workers who pay into Social Security for their entire careers, and those who also work for jobs where they pay into a pension, equally.
For now, workers who are affected must navigate the complicated rules to plan for their retirements.
Moreover, they may be affected by benefit overpayments, where beneficiaries receive more money than they are due because the Social Security Administration has wrong or incomplete information.

It would be nice if the state and local governments provided the agency with the data on the retirement benefit, the pension benefit, but they don’t.

Mark Warshawsky
senior fellow at the American Enterprise Institute

In those situations, the agency requires beneficiaries to pay the money back.
Overpayments of retirement benefits mostly affect beneficiaries of state and local governments who receive noncovered pensions, Mark Warshawsky, senior fellow at the American Enterprise Institute and former deputy commissioner for retirement and disability policy at the Social Security Administration, wrote in a recent op-ed.
The agency may discover a pension it didn’t know existed or an amount of pension income that was not previously reported.
“At large, the way to prevent it from happening is to get the data much more quickly,” Warshawsky said.
“It would be nice if the state and local governments provided the agency with the data on the retirement benefit, the pension benefit, but they don’t,” Warshawsky said.

How beneficiaries can estimate retirement income

There are steps beneficiaries who are affected by these rules may take to gauge how much income they may expect in retirement.
For workers with five or more years of noncovered earnings, the Social Security Administration provides a supplemental fact sheet about the WEP and GPO rules.
While the agency does not calculate the altered retirement benefit to adjust for that income, individuals can do it themselves through tools online, including WEP and GPO calculators.
“We recommend that people review their Social Security Statement at least once every year, which includes important information about WEP and GPO,” a Social Security spokeswoman said in a statement.

There is still the risk that information may be overlooked, or the wrong data may be transferred. That has prompted Laurence Kotlikoff, a Social Security expert and Boston University economics professor, to urge beneficiaries to carefully track their own earnings and pension benefit information and cross check it with Social Security’s records.
In the event Social Security beneficiaries receive an overpayment notice, they may be able to work out a deal for a partial payment, extended period of payment or forgiveness of part of the overpayment, Warshawsky noted.
“That has to be negotiated on a one-off basis, for each person individually,” Warshawsky said. More

If you piled cash into money market mutual funds in 2023 amid rising interest rates, you may have a surprise tax bill in April, experts say.
Investors and institutions have funneled $5.84 trillion into money market mutual funds, as of Nov. 29, and many funds are paying well over 5%.

JGI/Jamie Grill

If you funneled cash into money market mutual funds in 2023 amid rising interest rates, you may have a surprise tax bill in April, experts say.
Investors and institutions have piled $5.84 trillion into money market mutual funds, as of Nov. 29, according to the Investment Company Institute, and many funds are paying well over 5%.

“With pennies earned in 2022 on cash assets, the tax bill was negligible,” said certified financial planner Robert Schultz, senior partner at NWF Advisory Group in Encino, California. “At 5% rates, there will be much higher bills, which will catch many off guard.”
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With yields closely tied to the federal funds rate, money market funds — different than money market deposit accounts — are mutual funds that typically invest in shorter-term, lower-credit-risk debt, such as Treasury bills.
Many investors are stockpiling money into these funds due to “fear in the stock market” and many are nervous to spend cash, according to CFP Colin Day, an enrolled agent at Correct Capital in St Louis.

Fund earnings ‘could be significant’

Typically, money market funds pay dividends monthly, and the earnings made in 2023 “could be significant,” said Day. “But unfortunately, this is before taxes.”

Rather than more favorable capital gains rates, you’ll owe regular income taxes on money market fund earnings, with a top bracket of 37%. By comparison, the top long-term capital gains rate is 20%.

For example, let’s say you’re an investor in California with a 45% tax rate when combining state and local taxes. With $100,000 in a money market fund, earning 5% could trigger a $2,250 tax bill, according to Schultz.
However, some states offer a tax break, depending on the underlying assets. For example, money market funds with U.S. Treasury bonds may exclude a portion of earnings from state and local taxes.

Still, investors may only find out about their taxable money market earnings when they receive tax forms in early 2024. “There will be a late Christmas gift for many investors in February,” Schultz said.
Typically, investors receive tax forms for money market mutual funds in January or February, which reports the previous year’s earnings to the IRS.Don’t miss these stories from CNBC PRO: More