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More people with federal student loans have been able to walk away from their debt in bankruptcy court due to a Biden administration policy change announced last November.
In the first 10 months of the new policy, student loan borrowers filed more than 630 bankruptcy cases, a “significant increase” from recent years, the government said.

President Joe Biden delivers remarks about the student loan forgiveness program on Oct. 17, 2022.
Leah Millis | Reuters

More people with federal student loans have been able to walk away from their debt in bankruptcy court due to a Biden administration policy change announced last November.
In the fall of 2022, the U.S. Department of Education and the U.S. Department of Justice released updated bankruptcy guidelines to make it easier for struggling borrowers to get their student loans erased in court. Previously, it was difficult, if not impossible, for people to part with their education debt in a normal bankruptcy proceeding.

“I am thrilled that our one-year review indicates that our efforts have made a real difference in borrowers’ lives,” said Associate Attorney General Vanita Gupta, in a statement on Thursday.
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In the first 10 months of the new policy, student loan borrowers filed more than 630 bankruptcy cases, a “significant increase” from recent years, the departments said.
“The vast majority of borrowers seeking discharge have received full or partial discharges,” they said.
Outstanding student debt in the U.S. exceeds $1.7 trillion, and around 7% of student loan borrowers have a balance of more than $100,000. Even before the Covid-19 pandemic, some 10 million borrowers were in delinquency or default.

Student debt had a high bar for bankruptcy discharge

Student loans were long treated differently than other types of debt in bankruptcy courts, garnering criticism from legal experts and consumer advocates.
Back in 2018, Federal Reserve chairman Jerome Powell said he was “at a loss to explain” why student loans couldn’t be discharged in bankruptcy. Powell also warned that the rising debt could slow down economic growth over time.
The difficulty of discharging student loans in bankruptcy dates back to the 1970s, when lawmakers added a stipulation that student loan borrowers had to wait at least five years after they began repayment to file for bankruptcy. That move came in response to concerns raised by policy makers and pundits that students would rack up a bunch of loans and then try to get rid of them after graduation.

Those fears were largely overblown, said higher education expert Mark Kantrowitz.
“Only borrowers who are facing extreme financial hardship seek to have their debt erased,” Kantrowitz said. “A bankruptcy discharge ruins your credit for seven years, preventing you from getting credit cards, auto loans and mortgages.”
Still, in 1990, the waiting period was upped to seven years. And the rules changed again almost a decade later, requiring that people with federal or private student loans prove that their debt poses an “undue hardship” to discharge it. Congress, however, never spelled out what that term means, and lawyers and advocates complained the uncertainty led to unfairness in the courts.
“The new policy represents a softening of the harsh stance on discharge of federal student loans,” Kantrowitz said. He added that the courts were now moving in the direction “of treating student loans like other debt.” More

This year, a 16-pound frozen whole turkey averages $27.35, a 5.6% decrease from 2022, according to the American Farm Bureau Federation.
Yet, Americans are still bracing for high prices across the supermarket aisles.
“Inflation is still clearly impacting food prices,” said Veronica Nigh, senior economist of AFBF, in a press meeting.

Tetra Images | Tetra Images | Getty Images

Families preparing for Thanksgiving will find that turkeys are cheaper this year. The U.S. bird population recovered from last year’s avian flu, boosting supply and helping push down prices.
This year, a 16-pound frozen whole turkey costs $27.35 on average, a 5.6% decrease from 2022, according to the American Farm Bureau Federation’s Thanksgiving Dinner survey, which polled respondents from all 50 states and Puerto Rico in early November. The cost of turkey represents 45% of the classic Thanksgiving basket of food prices the bureau tracks.

Yet Americans are bracing for high price tags across the supermarket aisles.
“Inflation is still clearly impacting food prices,” Veronica Nigh, senior economist of AFBF, said in a press call.
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About 60% of people celebrating Thanksgiving said inflation is affecting their budgets, a recent LendingTree survey found. To lower costs, 39% plans to shop around and use coupons.
“People are paying more at the grocery store and if they want to save money and spend less, they have to do more work in terms of looking for deals and being flexible about what they’re buying,” said Kimberly Palmer, personal finance expert at NerdWallet.

Ham, sweet potatoes are more expensive

While food inflation has slowed, this year’s celebration won’t be less expensive, because costs are still rising. There’s also a record spread between the wholesale prices supermarkets pay and the retail prices consumers pay.
The difference is impacting some popular dishes. For example, retail prices for ham — which some families serve instead of, or in addition to, turkey at Thanksgiving — are near an all-time high, with a price tag of $4.56 per pound in September, up 5.2% from last year, according to a recent Wells Fargo report. 

Sweet potatoes, a Thanksgiving side-dish staple, are also up 4% from a year ago, and russet potato retail prices are at all-time highs, costing $1.17 per pound in September, 14% up from a year ago, Wells Fargo found.
This is not a situation where shoppers should take a relaxed approach, said Mark Hamrick, senior economic analyst for Bankrate. Shoppers must compare prices and promotions across stores, as “there are good deals to be found,” he added.

Fresh foods are cheaper than canned products

High energy and raw material costs are the price-increase culprits for processed foods like canned green beans, which are up almost 9% from last year, Wells Fargo found.
Farmers are experiencing high fuel, seed, fertilizer and transportation costs, according to AFBF.

People are paying more at the grocery store.

Kimberly Palmer
personal finance expert at NerdWallet

Processed foods are also more sensitive to factors involving packaging costs and the supply chain, said AFBF economist Nigh. Climate change also has the potential to create issues in the supply change, said Hamrick.
Consumers can expect to pay around 20% less for fresh cranberries compared to a year ago while canned cranberry sauce is up 7% from last year, Wells Fargo found. Prices for canned pumpkin also increased and are about 30% higher from last year. 
While weather and disease last year affected lettuce crops and inflated prices in November 2022, Americans looking to include leafy greens in their Thanksgiving menus can expect prices 10% lower from a year ago. 

Buy your Thanksgiving bird sooner

Maren Caruso | Stone | Getty Images

While you may score some turkey deals the closer you get to the holiday, the major caveat to waiting last minute — in addition to less defrosting time — is a higher chance of not finding the exact size bird you’re looking for, said economist Nigh.
Given demand for this key Thanksgiving item, buying your turkey “sooner is probably better than later,” said Hamrick.
To maximize savings at the grocery store, plan out exactly what you need to buy and make sure you have a complete shopping list before you show up to the store, said Palmer.
“A lot of people waste money by buying things that they end up wasting,” she said.
Use search products, such as shopping apps, to help determine which stores have lower prices for items on your list. It “might actually be cheaper to go to a grocery store that you’re not used to going to,” Palmer said. 
Consider opting into supermarket loyalty programs. You can pull in more savings than expected by giving your phone number and email, said Palmer.

As 41% of potential hosts plan on using a credit card to pay for Thanksgiving expenses, per LendingTree, leverage credit cards that offer bigger rewards on groceries.
“Certainly credit card rewards can help extend your holiday budget but if you use them in tandem with other things like grocery store memberships, then it can help even more,” said Matt Schulz, chief credit analyst at LendingTree.
However, make sure you pay off the balance by the end of the month, otherwise “the amount you’re paying on interest wipes out any benefit of those rewards,” added Palmer.
Another way to save: Ask guests to pitch in. As potential hosts face financial strain, 61% of guests will and contribute a dish, whether that means bringing a homemade side dish (46%), a dessert (30%) or alcoholic beverages (19%), LendingTree found.
“Everybody knows that life is expensive right now,” said LendingTree chief analyst Matt Schulz. “Chances are they’ll be willing to help out because they know they would want help if the shoe was on the other foot.” More

The consumer price index was flat in October, signaling that the prolonged period of high inflation may finally be coming to an end, according to a report by UBS global wealth management.
However, “the slower pace of inflation is little comfort to households still dealing with the cumulative effect of rising prices,” said Bankrate’s Greg McBride.

The prolonged period of high inflation may finally be coming to an end, according to an analysis of recent data by UBS global wealth management.
In October, the consumer price index, a closely followed inflation gauge, increased 3.2% from 12 months earlier, down from 3.7% in September, the U.S. Bureau of Labor Statistics said Tuesday.

The report marked a significant improvement on the pandemic-era peak of 9.1% in June 2022. 
“By next spring, inflation will have slowed to a comfortable level for both the Fed and investors,” said Solita Marcelli, chief investment officer of the Americas for UBS Wealth Management.
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“The slower pace of inflation is little comfort to households still dealing with the cumulative effect of rising prices,” said Greg McBride, Bankrate’s chief financial analyst.
“The strain on household budgets is real.”

47% of adults say monthly expenses exceed income

Consumers have struggled to keep up with high prices and higher interest rates across the board.
Nearly half, or 47%, of adults said their monthly expenses exceed their monthly income, according to a recent report by First National Bank of Omaha, and 62% of adults said they are living paycheck to paycheck, studies also show.
For now, though, cooling inflation could keep the Federal Reserve on the sidelines.

Although Fed Chair Jerome Powell recently said “inflation is still too high,” a move in December “seems highly unlikely,” McBride said. “But stubbornly high core inflation will have the Fed keeping their options open into 2024.”
Altogether, the central bank has raised rates 11 times in a year and a half, pushing its key interest rate to a target range of 5.25% to 5.5%, the highest level in more than 22 years. 
However, the Fed is unlikely to be able to claim victory just yet, Marcelli said.
For consumers, that means there will be no relief from sky-high borrowing costs.
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Deflation is the opposite of inflation. It’s when prices decline for certain consumer goods and services.
Pandemic-era supply chain problems have largely been unwound. A strong U.S. dollar makes it cheaper to import many goods.

Customers at a pop-up shop at a Forever-21 store in New York’s Times Square on Nov. 10, 2023.
Bloomberg | Bloomberg | Getty Images

Inflation continued its broad moderation in October, down significantly from pandemic-era highs that hadn’t been seen in more than 40 years.
This dynamic — whereby prices for consumer goods and services are still rising but at a slower pace — is known as disinflation.

However, prices have actually begun to deflate in some areas of the U.S. economy. Deflation is the anti-inflation: It means consumers are actually seeing prices fall.

Why some prices are deflating

Largely, deflation is happening on the “goods” side of the U.S. economy, or the tangible objects that Americans buy, economists said. Goods encompass roughly a quarter of the consumer price index.
There are several reasons for this.  
For one, a strong U.S. dollar makes imported goods cheaper. Some of those savings get passed on to consumers, said Mark Zandi, chief economist of Moody’s Analytics.
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The Covid-19 pandemic snarled global supply chains, causing shortages that fueled big spikes in prices. Energy costs surged when Russia invaded Ukraine, pushing up transportation and other distribution costs.
Now, supply chain disruptions are largely in the rearview mirror, economists said. Energy costs have declined. In fact, energy prices, which include categories such as gasoline and electricity, have fallen 4.5% in the past year, according to the consumer price index.
Over the long term, consumers also generally see savings as manufacturers shift goods production to lower-cost areas, Zandi said.

Some prices, like those for airline tickets and eggs, have also declined off record-high levels. The latter, for example, soared largely due to a historically deadly bout of avian flu among egg-laying hens. Egg and airline ticket prices are down about 22% and 13% in the past year, according to CPI data.
It’s unclear the extent to which prices will broadly continue to drop.
“Only certain prices are likely to decline” on a sustained basis, Andrew Hunter, deputy chief U.S. economist at Capital Economics, previously told CNBC. “It’s quite rare for retailers to actually cut prices.”

How measurement quirks affect prices

Some of the declines are due partly to measurement quirks.
For example, the U.S. Bureau of Labor Statistics, which compiles the CPI report, controls for quality improvements over time. Electronics such as televisions, cell phones and computers continually get better. Consumers get more for roughly the same amount of money, which shows up as a price decline in the CPI data. 

Health insurance, which falls in the “services” side of the U.S. economy, is similar.
The bureau doesn’t assess health insurance inflation based on consumer premiums. It does so indirectly by measuring insurers’ profits. This is because insurance quality varies greatly from person to person. One person’s premiums may buy high-value insurance benefits, while another’s buys meager coverage.
Those differences in quality make it difficult to gauge changes in health insurance prices with accuracy.
These sorts of quality adjustments mean consumers don’t necessarily see prices drop at the store — only on paper.   More

ValueAct Capital began buying Disney this summer during the Hollywood strikes and it is now one of the investor’s largest positions, the Activist Spotlight has learned.
The activist has been in dialogue with Disney’s management and is still growing their position, according to the Activist Spotlight.
ValueAct believes that Disney’s theme parks and consumer products businesses are alone worth low $80s per share.

Disney CEO Bob Iger speaking with CNBC’s David Faber at the Allen&Co. Annual Conference in Sun Valley, Idaho.
David A. Grogan | CNBC

ValueAct Capital has taken a significant stake in Disney (DIS) and has been in dialogue with Disney’s management, the Activist Spotlight has learned. This is a new stake not previously disclosed in filings or media reports.
Here’s a breakdown of the situation:

Company: Walt Disney Co.

Business: Disney is one of the most iconic entertainment companies globally. It operates through two segments, Disney Media and Entertainment Distribution; and Disney Parks, Experiences and Products. Disney engages in film and TV content production and distribution activities, as well as operates television broadcast networks and studios.
Stock Market Value: $167 Billion ($91.07 a share)

Activist: ValueAct Capital

Percentage Ownership: n/a
Average Cost: low $80s per share
Activist Commentary: ValueAct has been a premier corporate governance investor for over 20 years. ValueAct principals are generally on the boards of half of ValueAct’s core portfolio positions and have had 56 public company board seats over 23 years. ValueAct has filed 89 13D’s in their history and has had an average return of 57.57% versus 17.52% for the S&P 500 over the same period.

Behind the scenes:

ValueAct knows technology very well as seen by their active investments at Salesforce, Microsoft, and Adobe where they had board seats. They also know media well as active investors at the New York Times, Spotify and 21st Century Fox.
ValueAct began buying Disney this summer during the WGA and SAG strikes and it is one of the firm’s largest positions. The activist investor has been in dialogue with Disney’s management and are still growing their position today.
ValueAct believes that Disney’s theme parks and consumer products businesses and their $10 billion in EBIT (earnings before interest and taxes) are alone worth low $80s per share, ValueAct’s approximate cost basis in the stock.
The theme parks unit has a high return on capital, allowing Disney to further monetize its intellectual property. Amongst its peers like Warner Bros, Paramount and Netflix, Disney is the only one who has this advantage. Moreover, this is a business that is not threatened by technology, but enhanced by it.
For example, Disney’s Genie app, which allows park visitors to be guided through the parks in a way that minimizes their wait time, greatly enhances the visitor experience. Moreover, Disney has recently announced that it will be investing $60 billion into theme parks, which will be money well spent.

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Disney YTD

This theme park valuation implies an almost zero valuation for the rest of Disney’s business that includes ESPN, theatrical movie releases, Disney+, Hulu and its television networks. Like digital news and music, video streaming was greatly disrupted by the internet and the low cost of capital from 2016 to 2021 afforded streaming companies, almost unlimited capital to acquire customers at any cost. Then with rising interest rates and inflation, that bubble burst in 2022 and there was a massive re-rating of assets globally.
Many of the high-growth companies that had easy access to capital now find themselves the most capital constrained they had been in a long time. This gives a huge advantage to companies like Disney, which has a market leading brand and an incumbent business model with strong customer relations.
Now, these streaming wars are in the process of resolving and companies are focused more on profitability than acquiring customers at any cost. This means cutting costs and creating growing and sustainable revenue.
ValueAct has experience in both of these areas. At Salesforce, where ValueAct CIO Mason Morfit is on the board, margins have gone from 18% to 32% while the stock has gone from $130 to $220 in 10 months. Disney has already announced an aggressive cost cutting plan, but it is the revenue opportunity that is more interesting here.
At portfolio companies like Adobe, Microsoft, Salesforce, Spotify and the New York Times, ValueAct has advocated for and assisted in creating bundles, pricing tiers and advertising stacks that have led to less churn, more pricing power, higher average revenue per user and even better advertising technology.
Both the New York Times and Spotify increased their bundles (NYT with Wordle, the Athletic, etc.; Spotify with podcasting and audiobooks) and both increased subscription pricing. The New York Times’ stock went from $30 per share to $45 per share and Spotify went from approximately $80 per share to $175 per share. Disney has numerous opportunities for bundling, price tiers, etc. and there are many ways this can work out through its present assets, M&A, alliances and licensing, but intelligently bundling its products will lead to more stable and valuable revenue. Based on similar situations that ValueAct has been involved in, this could lead to up to $15 billion of EBIT for the media assets and a Disney stock price as high as $190 per share.
ValueAct has a history of creating value through board seats, including at Salesforce and Microsoft, but has also added value as active shareholders in situations like Spotify and the New York Times.
I would expect that they would want a board seat here and as someone who has a reputation of working amicably and constructively with boards, the Disney board should welcome them with open arms. Aside from their extensive experience at technology companies and media companies and their innovative and relevant history of growing sustainable revenue at similar companies, there is one other reason shareholders should welcome them to the board.
Bob Iger returned to Disney in 2022 with an initial two-year contract with the explicit goal of righting the ship. The board formed a succession planning committee at that time. Iger subsequently extended his employment agreement through 2026 but longer-term succession remains one of the board’s most important priorities. Having a shareholder representative on the board is very helpful in that area particularly one like ValueAct, whose CIO participated in one of the most audacious and successful CEO successions ever when Satya Nadella replaced Steve Ballmer as CEO of Microsoft. Someone with that experience and perspective would be invaluable in navigating CEO succession at Disney.
Finally, we cannot ignore the fact that Disney is presently the target of a proxy fight by Nelson Peltz and Trian Partners that is turning somewhat confrontational. This certainly gives the Disney board an alternative they were not expecting.
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

“I don’t think we’re facing the next GFC,” Jonathan Pingle, UBS chief U.S. economist told CNBC on Wednesday.
Credit tightening in the U.S. has raised concerns about the state of the economy and what could happen next.
UBS said earlier this week that it anticipated a mild recession, as well as significant interest rate cuts next year.

Despite indicators like U.S. credit card debt pointing toward financial and economic pressures, another global financial crash is not imminent, UBS chief U.S. economist Jonathan Pingle believes.
U.S. credit card debt soared to $1.08 trillion in the third quarter of 2023, data from the Federal Reserve Bank of New York showed earlier this month. This has sparked concerns about what rising debt levels, brought on at least in parts by higher prices, could mean for the overall economy.

However, Pingle told CNBC’s Joumanna Bercetche on Wednesday that it is difficult to view the data as a systemic risk.
“I don’t think we’re facing the next GFC [global financial crisis],” he said on the sidelines of the UBS European Conference.
Credit tightening does play a role when it comes to the lag of Federal Reserve monetary policy filtering through to the economy, Pingle suggested. “We are still waiting to see those credit headwinds dampen activity in 2024,” he said.
Credit tightening tends to precede loan growth by several quarters, so the full impact is not yet clear, he explained.

Several other factors also come into play, Pingle noted. This includes concerns about regulation in the wake of the collapse of Silicon Valley Bank, which raised alarms about the health and stability of the banking sector and prompted a crisis in regional banking, and “rapid” interest rate hikes, he said.

The Federal Reserve began hiking interest rates in March 2022 in an effort to ease inflation and cool the economy. Eleven rate hikes have been implemented since then, with the target range for the fed funds rate rising from 0%-0.25% to 5.25%-5.5%.
The Fed chose to leave rates unchanged at both of its last two meetings, and Tuesday’s lower-than-expected reading of the October consumer price index prompted traders to all but erase the chances of rates being hiked at the central bank’s December meeting.
The CPI was flat compared to September and reflected a 3.2% rise on an annual basis, while the so-called core-CPI, which excludes food and energy prices, came in at 4% year over year. This marked the smallest rise since September 2021.
“It’s great news for the Federal Reserve in their quest to restore price stability,” Pingle told CNBC on Wednesday. Still, they are “not out of the woods yet” he added, saying that there was “still a ways to go” before the Fed reached its 2% inflation goal.
A trend of disinflation is however in place, Pingle said, and if the Fed can slow the economy, it could make strong progress toward its inflation goal.
“We think its probably going to get to 2 next year. It’s already falling faster than the Fed expects,” he said.
However the economy including the labor market will have to weaken further for inflation to steadily remain around 2%, Pingle expects.

“The path to two and a half we think is pretty clear, but sort of that last leg down we do think is going to take some weakening in the labor market,” he said.
In its 2024-2026 outlook for the U.S. economy, which was published Monday, UBS said it expected unemployment to rise close to 5% next year and for the economy to enter a mild recession. UBS is anticipating a contraction of the economy by around half a percentage point in mid-2024, its report suggested.
A looming recession has been a key fear among investors throughout the Fed’s rate-hiking cycle as many have been concerned about rates being hiked too high, too quickly.
They have therefore been hoping for an imminent end to rate hikes and hints about when the Fed may start cutting rates again.
UBS foresees significant rate cuts for 2024, predicting that rates could be cut by as many as 275 basis points throughout the year.
Rates would be cut “first to prevent the nominal funds rate from becoming increasingly restrictive as inflation falls, and later in the year to stem the economic weakening,” the Swiss bank said.
Rate cuts will therefore be a two-step process Pingle explained, and could start relatively early in the year.
“As early as March they should probably start at least calibrating the nominal funds rate,” he said, whereas the second stage would likely begin when unemployment starts rising. More

Year-end Planning

The IRS on Thursday released 2024 inflation adjustments for the capital gains tax brackets, which apply to investments owned for more than one year.
In 2024, single filers can earn up to $47,025 in taxable income — $94,050 for married couples filing jointly — and still pay 0% for long-term capital gains.
Taxable income is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

Fg Trade | E+ | Getty Images

If you’re planning to sell investments or rebalance brokerage assets next year, it’s possible you won’t trigger a tax bill for 2024.
The IRS on Thursday released dozens of inflation adjustments for 2024, including increases in income tax brackets, standard deductions and income thresholds for capital gains.

For 2024, there are higher thresholds for the 0%, 15% and 20% long-term capital gains brackets, applying to assets owned for more than one year. 

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:

“It’s great from a tax planning perspective,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. “There’s definitely an opportunity to take some gains next year.”
If you’re in the 0% capital gains bracket, you can sell long-term assets or rebalance your taxable portfolio without adding to your tax liability, he said.

How to calculate your capital gains tax bracket

You’re more likely to fall into the 0% capital gains bracket in 2024 with higher standard deductions and capital gains income thresholds.
“A lot of people don’t realize,” Lucas said.

For 2024, you may qualify for the 0% long-term capital gains rate with taxable income of $47,025 or less for single filers and $94,050 or less for married couples filing jointly.
The standard deduction will rise to $29,200 in 2024 for married couples filing jointly, an increase from $27,700 in 2023, and single filers may claim $14,600, up from $13,850. The standard deduction is even higher if you’re at least age 65 or blind.

However, many investors don’t know that capital gains brackets use “taxable income,” which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
“It’s really quite a bit of capital gains you can receive without paying any tax,” said certified public accountant Tom Wheelwright, CEO of WealthAbility.  
For example, if a married couple earns $125,000 together in 2024, their taxable income may fall below $94,050 after they subtract the $29,200 standard deduction for married couples filing jointly.

Who may fall into the 0% capital gains bracket

There are several scenarios where higher earners may unknowingly fall into the 0% capital gains bracket for 2024, experts say.
For example, retirees who haven’t started collecting Social Security income or required minimum distributions “absolutely should be looking at this,” Wheelwright said, noting that $94,050 of taxable income is a “pretty big number.”
You may also fall into the 0% capital gains bracket if you experienced a job loss or lower revenue as a business owner. More

Many individuals find it difficult to save for retirement because of their financial circumstances.
It turns out that whether or not you have a combination of certain behavioral traits can also make or break your investment goals, new research finds.

Thomas Barwick | Stone | Getty Images

People who find it easiest to financially prepare for retirement have four behavioral traits, a new survey shows.
Yet just 10% of workers have all of these “optimal” characteristics, according to the survey findings, from Goldman Sachs Asset Management in collaboration with Syntoniq, a behavioral finance research organization.

The behaviors help retirement savers turn their intentions into action, according to the July survey of 5,261 workers and retirees.
Many people find it difficult to save for retirement because of their financial circumstances.
Previous Goldman Sachs research has found competing life priorities — such as the need to pay down student loans, provide care for other family members or other financial hardships — may reduce workers’ retirement savings by up to 37%.
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High inflation and low savings has led Americans’ confidence that they can live comfortably in retirement to plummet, research from the Employee Benefit Research Institute and Greenwald Research found earlier this year.

“We know that people struggle with saving, we know that people have day-to-day financial issues,” said Chris Ceder, senior retirement strategist at Goldman Sachs Asset Management.
“We still wanted to know more about the why,” he said.
The research led to the discovery of the four traits, which are “not inherently things that you would think about for retirement,” Ceder said.

1. Overoptimism

When it comes to retirement planning, workers may want to take a cue from Warren Buffett, who always has a positive outlook for the country and future results, Ceder noted.
The research found a general tendency of overestimating the probability of positive events coupled with overconfidence — or having a perception that is better than reality — can help improve retirement preparedness.
“When you have that level of optimism, you’re comfortable taking the steps in order to achieve the goals that you have in the future,” Ceder said.
People who exhibit this trait have a higher level of financial engagement, willingness to take risk and plan for emergencies, the research found.

2. Future orientation

How well people connect with their future selves also impacts retirement preparedness.
Those who have this trait are more likely to have smart spending, saving and money management skills, the research found.
“In order to save for something, you have to understand where you’re going,” Ceder said.

3. Financial literacy

Having financial know-how — such as how compound interest and diversification works — can help workers better reach their retirement goals.
The good news is people can acquire this knowledge.
“Financial literacy is something that kind of grows over time,” Ceder said.
However, the earlier you have this knowledge, the better the financial decisions you will make, which will help you get ahead when it comes to retirement preparedness, he said.

4. Risk vs. reward

Retirement savers may fall into one of two camps: those who pursue goals with a focus on achievement, or those who instead focus on security and protection.
Those in the first group are more likely to take proactive steps with financial preparation, including having a personalized financial plan and reviewing retirement savings.
They are also more willing to lean into risks. Having the opposite mentality of risk avoidance is not nearly as effective for reaching those retirement goals, Ceder said.

What investors can do

As aspiring retirees juggle competing life priorities, much of what it takes to be successful comes down to balancing today’s lifestyle with future goals.
“People who are disciplined with their money, disciplined with their life, really are going to go so much further,” John Merrill, president and founder of Tanglewood Total Wealth Management in Houston, recently told CNBC.com.
Mental health also affects workers’ abilities to plan adequately for retirement, research has found.
To better prepare for retirement, workers should remind themselves that the future may be “equally as interesting and bright” as today, Ceder said.
While developing all four traits identified in the research is important, two traits — optimism and future orientation — should be a priority, Ceder said.
The results found 5% of workers had all four suboptimal traits identified by the research — low optimism, low future orientation, low financial literacy and risk focus.
Most workers — 85% — have a blend of these traits and mixed retirement savings success. More