Investing

San Francisco 49ers defensive lineman Arik Armstead recently shared one of his pay stubs on TikTok for “motivational and educational purposes.”
The pay stub revealed a breakdown of his gross earnings, tax withholdings, payroll deductions and net take-home pay.
While the pay stub showed gross earnings of more than $4 million year to date, experts say there are lessons for everyday taxpayers.

Arik Armstead of the San Francisco 49ers at the NFC Championship game against the Philadelphia Eagles on Jan. 29, 2023.
Kevin Sabitus | Getty Images Sport | Getty Images

1. Know where your dollars are going

In the era of direct deposit and electronic records, it’s easy to let months pass without reviewing your pay stubs. But experts say it’s important to know where each dollar goes.
Like other W-2 employees’ pay stubs, Armstead’s includes a breakdown of gross and net earnings for one pay period — nearly $400,000 compared to roughly $200,000 — along with a summary of earnings to date.

You can also see an itemized list of taxes, including Medicare, Social Security, federal, state and local tax withholdings, and other payroll deductions, which bring Armstead’s net take-home pay down significantly.
“This is what everyone else’s paycheck looks like with much bigger numbers,” said Albert Campo, a certified public accountant and president of AJC Accounting Services in Manalapan, New Jersey.

2. Monitor your withholdings

With those gross earnings of more than $4 million to date, Armstead quickly hit the top income tax brackets for both federal and California state taxes, said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.  
For 2023, the top federal income tax rate is 37% and the highest rate in California is 12.3%, with an additional surcharge of 1% for income of more than $1 million. “The more you make, the more you pay,” Lucas added.
Of course, working primarily in California, Armstead owes considerably more than an athlete living in income-tax-free states like Florida or Texas.

Like other W-2 workers, Armstead’s withholdings were his decision, elected via Form W-4, according to CFP and enrolled agent John Loyd, owner at The Wealth Planner in Fort Worth, Texas.
While it’s possible to withhold less than you’ll owe, you could risk underpayment penalties on top of a sizable income tax bill in April. “It’s super important for everyone to pay attention” when filling out Form W-4 and throughout the year, he said.
You can use the IRS withholding estimator to make sure you’re on track with withholdings and make adjustments through your HR department as necessary.

3. Max out your 401(k) to save on taxes

In addition to significant tax withholdings, Armstead also maxed out his workplace retirement plan for 2023.
There are limited ways to reduce your taxes as a W-2 worker. But you can reduce your adjusted gross income with pre-tax 401(k) contributions, experts say.

If you’re under age 50, you can defer up to $22,500 in 2023 and $23,000 in 2024. Savers age 50 and older can funnel an extra $7,500 into their accounts.
In 2022, only 15% of Americans maxed out 401(k) contributions, according to Vanguard, and Armstead is among those savers for 2023, his pay stub shows. More

More employers are including a range of non-cash benefits, perks and flexibility options, according to a recent ZipRecruiter survey.
While those seeking jobs may find more transparency up front, the negotiations process when hiring is getting more challenging.
Pay transparency has not significantly altered average wage ranges listed in job postings, even though those ranges have somewhat widened.

Commuters arrive from Metro North Railroad trains in Grand Central Station in New York.
Timothy A. Clary | AFP | Getty Images

Rising pay transparency is causing a new kind of competition among employers — and it’s not necessarily for talent.
Instead, the shift in employers opting to share salaries on job listings has sparked an “arms race” for better starting pay and other benefits, Julia Pollak, chief economist at ZipRecruiter, told CNBC. And more employers are also including a range of non-cash benefits, perks and flexibility options in their job postings, according to a recent ZipRecruiter survey on pay transparency.

The survey found that 72% of employers post pay information on all job listings, taking the percentage of postings with salaries listed into the range of 50% to 60% on ZipRecruiter.
Other job sites are observing similar trends.
More from Personal Finance:The ‘radically different’ wage growth forecast in 2024Cooling job market no reason for panic yet, economists sayRetirement is overrated, Gen Z says, as ‘soft saving’ trend takes hold
For example, at Indeed, state laws requiring pay transparency have helped push employers to list salary ranges, especially in sectors like software development and technology, Indeed economist Cory Stahle said.
“We’ve seen a pretty dramatic uptick in the number of employers who are actually even including wages on our job postings,” Stahle said.

The number of employers that include wages in their job postings has increased significantly this year, in part due to the impact of laws in states such as California, Colorado and Washington. In addition, the tight labor market and pay transparency are acting as dual forces — with employers posting wages and benefits up front as a way to attract workers who have been difficult to draw in.

While those seeking jobs may find more initial transparency about compensation, the negotiations process when hiring is getting more challenging, said Aaron Terrazas, Glassdoor’s chief economist.
“Recruiters can feel less flexibility and … less ability to negotiate with candidates and raise pay,” Terrazas said.
As a result, pay transparency has not significantly altered average wage ranges listed in job postings, even though those ranges have somewhat widened.
“When we talk about a little bit of widening, it’s not necessarily that these jobs are now all of a sudden having $500,000 ranges,” Stahle said. “We’re talking about a few percentage points.”

Pay listings avoid ‘wasting recruiters’ time’

Beyond any material impact on wage levels, rising pay transparency has had the largest effect on how employees and employers behave during the job-seeking and hiring processes.
Employers are using pay transparency to attract candidates who are actually willing to receive the pay that is listed — and discourage others from applying “instead of wasting recruiters’ time,” Pollak said.
“I think many of them are kind of patient and prepared to hold out for those candidates prepared to sort of suck it up and accept what they’re giving,” she added.
The challenge that pay transparency presents to employers is that jobs with pay information tend to draw more applicants, as knowing the salary helps applicants determine if a job could support their current cost of living. To address these issues and allow for negotiation, some employers have narrowed the maximum wage limit.

As it becomes normal to know the salary for a job when applying, employees stand to benefit from becoming more aware of other perks, too.
For private industry workers, benefits account for 29.4% of compensation, compared to 31.4% for civilian workers overall, according to the U.S. Bureau of Labor Statistics.
“Pay transparency in some ways moves the competition away from salaries, away from wages and toward non cash benefits, or toward equity comp, toward flexibility,” Terrazas said.

In fact, knowing how much a job pays beforehand could actually take a factor out of jobseekers’ reasoning, as they consider other things that “are really important” but masked by salary, said LaCinda Glover, a senior principal consultant at Mercer. These include job culture, benefit programs, managerial issues and career development.
In the year to come, pay transparency “will start putting pressure on organizations to look at other factors as pay becomes a little bit more of a known fact,” Glover said. More

A Citibank sign in front of one of the company’s offices in California.
Justin Sullivan | Getty Images

The ongoing market volatility continues to add to investors’ woes, making it difficult for them to pick the right stocks.
However, it is always better to have a longer-term investment horizon and look for names that can enhance total returns with safe dividends and capital appreciation.

To that end, 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.

Ares Capital

This week we will first look at a high-dividend yield stock Ares Capital (ARCC). Ares is a business development company that offers a range of financing solutions to the middle market. The company recently reported a beat on third-quarter earnings, driven by higher interest rates and continued stable credit quality.
The company also declared a dividend of 48 cents per share for the fourth quarter, payable on Dec. 28. ARCC offers a dividend yield of 9.8%.  
Commenting on the Q3 results, RBC Capital analyst Kenneth Lee noted that credit performance is still good, with loans on non-accrual status declining slightly quarter-over-quarter to a very low 1.2% of the portfolio (on an amortized cost basis). That said, he thinks that non-accruals could rise sometime next year.
The analyst highlighted other positives for Ares Capital, including portfolio diversification. The analyst also thinks that the company’s dividends are strongly backed by its core earnings per share generation and potential net realized gains.

Lee reiterated a buy rating on ARCC stock with a price target of $21 saying, “We still favor ARCC’s strong track record of managing risks through the cycle, well-supported dividends, and scale advantages.”
Lee ranks No. 251 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 57% of the time, with each delivering an average return of 12.6%. (See ARCC Stock Charts on TipRanks)  

Citigroup

Next on this week’s list is banking giant Citigroup (C). In October, the bank delivered better-than-anticipated results for the third quarter, fueled by strength in its institutional clients and personal banking units. Citi recently announced a massive reorganization that would simplify its operating model and enhance its business.
The bank announced a quarterly dividend of 53 cents per share, payable on Nov. 22. Citi’s dividend yield stands at 5%.
BMO Capital analyst James Fotheringham noted that Citi’s Q3 results were driven by higher-than-projected revenue (with net interest income coming in 5% above consensus), lower operating expenses, and reduced credit costs.
The analyst raised his core earnings per share estimates for 2023, 2024, and 2025 by 11%, 6%, and 3%, respectively, to reflect lower than previously-modeled credit costs and a slower-than-expected decline in net interest margin.
Fotheringham also increased his price target for the stock to $66 from $61 and reiterated a buy rating, saying, “C is our top pick among large-cap banks; shares trade at the largest discount (by far) to TCE [total capital employed] among the money-center banks.”   
Fotheringham holds the 372nd position among more than 8,500 analysts on TipRanks. Moreover, 56% of his ratings have been profitable, with each generating an average return of 9.4%. (See Citigroup Blogger Opinions & Sentiment on TipRanks)

McDonald’s

Dividend aristocrat McDonald’s (MCD) recently reported its third-quarter results. The fast-food chain exceeded Wall Street’s expectations, thanks to higher prices that helped offset weakness in the traffic at U.S. restaurants.
In early October, MCD announced a 10% hike in its quarterly dividend to $1.67 per share, which will be payable on Dec. 15. The company has increased its dividends for 47 consecutive years. The company pays a dividend yield of 2.5%.
BTIG analyst Peter Saleh, who ranks No. 667 among more than 8,500 analysts on TipRanks, highlighted that the sales and earnings upside in MCD’s Q3 results was coupled with rather cautious comments about the U.S. traffic. Traffic had declined slightly due to reduced frequency from lower-income customers and pressure in the “breakfast daypart.”
Nonetheless, the analyst noted that MCD still experienced wide geographic strength and remains better positioned than its rivals. Looking ahead, Saleh expects the company to accelerate its U.S. expansion next year, with his checks indicating that MCD has about 250 units in the pipeline. He also expects the company to have a greater focus on value and digital engagement, as well as an expansion of its automated order-taking technology in 2024.
“We view McDonald’s as one of the strongest restaurant concepts in the world that is in the middle stages of a multi-year sales recovery,” said Saleh.
Saleh reiterated a buy rating on McDonald’s stock with a price target of $300. His ratings have been successful 52% of the time, with each rating delivering an average return of 7.9%. (See McDonald’s Financial Statements on TipRanks)

AT&T

We now move to telecommunications giant AT&T (T), which impressed investors by reporting robust subscriber additions for the third quarter, thanks to promotions and phone upgrades. Furthermore, the company raised its full-year free cash flow guidance to about $16.5 billion from $16 billion. AT&T offers an attractive dividend yield of 7%.
On Oct. 26, Tigress Financial Partners analyst Ivan Feinseth reiterated a buy rating on AT&T stock with a price target of $28. The analyst highlighted that the rise in Q3 subscribers and cash flow mark a significant turn in AT&T’s business performance trends.
He added that while 2022 was a transitional year, the company’s revenue, cash flow and profitability will rise significantly in 2023 and beyond, with the long-term growth driven by ongoing 5G and broadband rollout in business communications.
“AT&T will increasingly leverage its 5G high-speed fiber network to drive ongoing subscriber growth and further enhance its Edge Computing capabilities,” said Feinseth.
The analyst noted that AT&T reduced its debt by over $3 billion in Q3 2023, which would reduce interest expense and drive higher investment in its connectivity business. He thinks that the company will further optimize its dividend payout ratio such that it can support ongoing investments while returning cash to shareholders.
Feinseth holds the 453rd position among more than 8,500 analysts on TipRanks. Moreover, 54% of his ratings have been successful, with each generating an average return of 8.2%. (See AT&T Hedge Fund Trading Activity on TipRanks)

Target

Feinseth is also bullish on another dividend stock: big-box retailer Target (TGT). The analyst thinks that near-term pressures create an attractive opportunity to buy the stock, as the company is well-positioned to drive revenue growth and profitability over the long term and further enhance shareholder value.
The analyst expects Target’s multiple strengths — including its loyal customer base, operating efficiencies and enhanced fulfillment capabilities — to help it navigate ongoing consumer headwinds, marketing errors and inventory shrink troubles.
Feinseth also highlighted that the retailer is enhancing its product offerings by adding several new products across its major product lines. It is also expanding its footprint by opening new stores while remodeling existing ones. (See Target Insider Trading Activity on TipRanks)    
He pointed out that TGT initiated its dividend in 1967 and has increased its dividend annually since 1971. In June 2023, the company raised its quarterly dividend by about 2% to $1.10 per share, following a massive 20% increase in June 2022 to $1.08 per share. TGT’s dividend yield stands at 3.9%.
Feinseth lowered TGT’s price target to $180 from $215 due to near-term challenges but maintained a buy rating, saying, “Increasing value focus in consumer spending trends, and moderation in inflationary pressures and input costs, will drive a reacceleration in Business Performance trends.” More

A shopper passes in front of a North Face store at the Easton Town Center mall in Columbus, Ohio, on Jan. 7, 2021.
Luke Sharrett | Bloomberg | Getty Images

Company: VF Corporation (VFC)

Business: VF Corp. is a consolidator of consumer footwear and apparel brands. It engages in the design, procurement, marketing and distribution of branded lifestyle apparel, footwear and related products, and it operates through three segments: outdoor, active and work. The company’s brands include The North Face, Timberland, Smartwool, Icebreaker, Altra, Vans, Supreme, Kipling, Napapijri, Eastpak, JanSport, Dickies and Timberland Pro brand names.
Stock Market Value: $6.03B ($15.50 per share)

Activist: Engaged Capital

Percentage Ownership:  n/a
Average Cost: n/a
Activist Commentary: Engaged Capital was founded by Glenn W. Welling, a former principal and managing director at Relational Investors. Engaged is an experienced and successful small-cap investor and makes investments with a two- to five-year investment horizon. Its style is holding management and boards accountable behind closed doors. Engaged has had great success as an activist, but almost all that success has come at small-cap companies. The firm has generated consistent returns in its small-cap activism. However, of the 31 activist campaigns in their history, this is only the sixth one above a $2 billion market cap. In the previous five, the firm received board representation each time, but has struggled to see financial success.

What’s happening

On Oct. 17, Engaged announced that it took a stake in VF Corp. and called on the company to undertake a plan that includes reducing costs, restoring brand autonomy, enhancing the capital structure and refreshing the board. Shortly thereafter, on Oct. 24, Bloomberg reported that Legion Partners Asset Management has also taken a stake in VF Corp. and is calling for the company to divest some of its brands.

Behind the scenes

While VF Corp. is a consolidator of consumer footwear and apparel brands, it essentially is comprised of three brands that make up 79% of their revenue – Vans, The North Face and Timberland. Historically, the company was operationally focused and had relatively consistent operating margins. On Jan. 1, 2017, Steve Rendle became CEO and shortly thereafter, he commenced a significant reorganization of the business which included centralizing several key functions previously managed at the brand level and relying on acquisitions for growth. Most notably, in November 2020, he purchased Supreme for over $2 billion expecting (and receiving) $500 million of revenue in 2022 from the streetwear brand. This strategy expanded the corporate cost structure, reduced autonomy of brands and ultimately deprived core brands of capital to offset investments in a corporate center that he had built. Under his tenure, earnings before interest, taxes, depreciation and amortization (EBITDA) margins dropped over 300 basis points, total corporate expense increased 34% from $631 million to $844 million and the stock price has declined 31.27% versus an increase of 77.11% for the S&P 500. By the time Engaged got involved, the company was trading at 10-year lows, down more than 80% from where shares traded prior to the Covid pandemic. VF Corp. was in desperate need of a new CEO, and they got one. Rendle left the company in December 2022. On July 17, 2023, Bracken Darrell, the former CEO of Logitech, became the new CEO at VF Corp.

Darrell spent the prior decade creating value as CEO of Logitech. During his time there, Darrell spearheaded a turnaround that included a major cost restructuring, reinvestment in design and innovation to help the company return to growth, as well as a significant improvement in profitability that led to a share price appreciation of over 900% during his decade-long tenure. So, it sounds like the board has found the right person for the job. Engaged thinks that this turnaround should start with unwinding duplicative costs, pointing out that there are over $300 million in cost savings that are actionable in the short term. However, just taking the company from 12% to 15% EBITDA margins will not reverse the sharp decline in the stock price. After this, Engaged suggests a restoration of brand autonomy, with a portion of the cost savings being reinvested to support growth and a product-driven turnaround at Vans. This is much easier said than done. The Vans brand has been in decline, dropping to $3.6 billion of revenue in 2023 from $4 billion in 2020. Engaged also urges VF Corp. to evaluate non-core divestitures to fix the balance sheet.
At the very least, Engaged would like to see a commitment to no further acquisitions and a reduction of the dividend. The firm would like management to use the additional cash from these activities to pay down debt and support the turnaround at Vans and continued investment in The North Face to maintain its competitive edge. That is a lot to do with an uncertain amount of cash flow, but nearly three-fourths of the VF Corp.’s revenues are generated through wholesale and owned ecommerce channels, so it is easier to grow sales with less incremental capital. Engaged thinks that The North Face, plus the value of a stabilized Vans, could be worth over $30 per share, without applying any value to the remaining portfolio which includes Timberland, Supreme, Dickies and other small brands. After adding up all the pieces, Engaged sees a path to a $46 share price within three years.
As this is a moving target with important decisions to be made every day, I would expect Engaged would want a board seat to help oversee this turnaround and hold management accountable if the firm is unsuccessful. Moreover, a majority of the current board members served through former CEO Rendle’s whole tenure and allowed the strategic mistakes to go on unchecked. So, fresh blood on the board would certainly be warranted. Engaged is likely working with management behind the scenes to discuss board representation. If no agreement is reached, the director nomination window opens on Jan. 14, 2024, at which time I would expect them to nominate directors.
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

Customers at several big banks on Friday wrestled with direct deposit delays stemming from an industry-wide processing issue.
The Federal Reserve reported a problem with the Electronic Payments Network, a private sector operator for Automated Clearing House, or ACH, a network that processes transactions.

A man walks by the Bank of America headquarters in New York on July 18, 2023.
Eduardo Munoz | View Press | Getty Images

Customers at several big banks on Friday wrestled with direct deposit delays stemming from an industry-wide processing issue.
There was a surge of “outages” reported by banking customers Friday morning, including Bank of America, Chase, Truist, U.S. Bank and Wells Fargo, according to Downdetector. But the site does not specify the nature of the complaints.

All Federal Reserve Financial Services are operating normally, according to a Federal Reserve statement released Friday.
More from Personal Finance:Social Security changes to help those not able work to full retire ageProgram gets 200,000 students automatic college acceptanceWhat to know as open enrollment begins for ACA insurance
The Fed reported a processing issue with the Electronic Payments Network, a private sector operator for Automated Clearing House, or ACH, a network that processes transactions.
“There was a processing error with an ACH file last night; it was a manual error associated with the file,” said Gregory MacSweeney, vice president and head of communications at The Clearing House, the banking association and payments company that owns the EPN processing system.
Banks are now working to correct the errors in those payments, he said.

“We’re aware of an industry-wide technical issue impacting some deposits for Nov. 3,” Lee Henderson, vice president of public affairs and communications at U.S. Bank, told CNBC in a statement. “Customer accounts remain secure, and balances will be updated when deposits are received.”

“We do not have an estimate on timing at this point,” Henderson added. “Customers do not need to take any action.”
“The originators of these deposits are working to resend the payment files, and we will post them as soon as we can,” said a Chase spokesperson in a written statement. Bank of America, Truist and Wells Fargo did not provide commentary by publication time.
Customers affected by the deposit delays can call their lenders and explain their late payments were due to an industry-wide issue, said Matt Schulz, chief credit analyst at LendingTree.
“When money that we expect to be there on a Friday morning isn’t there and your autopay is set up to pay a credit card or a buy now pay later loan, it can cause some real issues,” he said.Don’t miss these stories from CNBC PRO: More

U.S. job growth fell to 150,000 last month and unemployment rose to 3.9%, according to the U.S. Bureau of Labor Statistics’ October jobs report.
Workers have lost some bargaining power and leverage from the historic levels seen in 2021 and 2022.
Despite a broad cooldown, the labor market has been resilient in the face of headwinds and there doesn’t seem cause for panic yet, economists said.

Jobseekers wait in line at a Nov. 2, 2023 career fair in Los Angeles.
Frederic J. Brown | Afp | Getty Images

The unemployment rate rose to 3.9% in October, from 3.8% in September, the BLS said. Average hours worked declined slightly to 34.3 a week, the “very bottom end of the range” typical for good economic times, Pollak said.
“There’s almost no exception in this report: Every indicator suggests a slowing, slackening labor market,” she said.

Yet, there’s cause for optimism. The job market has proven resilient in the face of economic headwinds and remains healthy in historical terms, economists said.
“The days of explosive growth are gone, as the labor market shifts into healthier and more sustainable territory,” said Noah Yosif, lead labor economist at UKG, a payroll and shift management company. “All indicators point to a continued lull in the immediate future. It’s a slowdown, not a collapse.”

Workers have lost some leverage

Why the data isn’t so gloomy

The overall jobs figure for October would have been higher — closer to 200,000 — absent strikes among autoworkers, actors and other union workers, economists said.
That would have been a “pretty spectacular number,” said Aaron Terrazas, chief economist at Glassdoor, a career site.
“On the surface it was a weak number, but this was clearly clouded by all of the strikes that were happening mid-month,” Terrazas said.

Indeed, there were nearly 50,000 workers on strike during the reference period the BLS uses to compile the jobs report, which was the largest number of workers on strike dating to 2004, Terrazas said.
Those strikes are now largely resolved.
The unemployment rate also remains below 4%, a key barometer.
“It tends to do great things in the labor market” when below 4%, Pollak said. “It tends to cause people to come off the sidelines, cause racial and gender wage gaps to narrow and force employers to improve working conditions and expand their talent pools.”

However, the unemployment rate was 3.5% just a few months ago, in July, and it’s rare to see that big an increase outside of recessions, Andrew Hunter, deputy chief U.S. economist at Capital Economics, said Friday in a research note.
That recent rise isn’t yet “panic-worthy,” but further increases “may begin to trip some recessionary alarm bells,” said Nick Bunker, head of economic research at job site Indeed.
The rise in the unemployment rate may also just be a sign that the extremely hot labor market is loosening a bit, Bunker added.

The labor market cratered in the early days of the Covid-19 pandemic amid mass job loss, a scale unseen since the Great Depression. However, it began heat up in 2021 and 2022 as the U.S. economy reopened and business’ demand for workers spiked to a historic level.
Now, the Federal Reserve has raised interest rates to cool the economy and tame inflation. That increase in borrowing costs for households and businesses is beginning to bite, Pollak said.
“While much in today’s payroll report appeared to confirm a continued slowing in the labor markets, it’s remarkable to witness how dynamic and resilient employment has been in the wake of the pandemic and inflationary shocks,” said Rick Rieder, head of the global allocation investment unit at asset manager BlackRock. More

Older workers in physically demanding jobs face unique retirement challenges.
Policy safeguards may help improve their financial security, report finds.

Turner worker working on drill bit in a workshop
Rainstar | E+ | Getty Images

The Social Security retirement age is currently moving to age 67, and some lawmakers have called for pushing it even higher.
But that may be a problem for a certain cohort: older workers in physically demanding jobs, according to a recent task force report from the National Academy of Social Insurance.

“It would be deeply irresponsible to further raise the retirement age before we’ve even gotten a handle on the damage that has been done to this group, and to other groups of workers, by the increase in the retirement age that’s already happening,” Rebecca Vallas, senior fellow at The Century Foundation and a task force member, said during a presentation this week on the report’s findings.
More from Personal Finance:Will Social Security be there for me when I retire?Medicare open enrollment may cut retirees’ health-care costsHow much your Social Security check may be in 2024
Social Security reforms passed in 1983 included gradual increases to the full retirement age, the point at which retirees may receive 100% of the benefits they earned. Today, people born in 1960 or later have a full retirement age of 67, which has been gradually phased in from age 65.

Workers in physically demanding jobs often claim early

When it comes to claiming Social Security retirement benefits, the advice is generally to delay as long as possible to get bigger benefits.
But workers who have physically demanding jobs may be unable to wait.

“There’s a lot of jobs that older workers are performing that you really can’t be expected to do well past the the early age of 62,” said Joel Eskovitz, director of Social Security and savings at the AARP Public Policy Institute and a task force member who worked on the report.
When those workers claim benefits early, they may find those reduced monthly checks fall short of the income they need. Moreover, those workers often do not have substantial retirement savings to fall back on due to low wages and a lack of access to retirement plans or pensions through their employers.

More than 10 million older workers face physical demands in their work, estimates the National Academy of Social Insurance’s task force report. That includes those who work in warehouses, restaurants or as home health aides, for example.
“The task force universally agreed that this would only further harm this already economically vulnerable group of workers,” Vallas said of raising the retirement age.
Instead, the group suggested a host of policy changes that may help. That includes four Social Security benefit changes that may help this vulnerable population as they age, according to the task force.

1. Create a bridge benefit

A bridge Social Security benefit could help workers who cannot work until their full retirement age, but who are unable to claim Social Security disability benefits.
The bridge benefit would start from age 62, when claimants are first eligible for retirement benefits, and last until age 67, or full retirement age. Claimants would receive half the difference between what they would receive at full retirement age versus age 62.
For example, if someone is eligible for $1,000 per month in Social Security benefits at full retirement age, and a $700 reduced benefit at age 62, they may instead receive $850 at 62 with the bridge benefit, according to Eskovitz. The bridge benefit would be recalculated each year until full retirement age, when the worker would start receiving their full benefits.
To qualify, workers would need to have performed physically challenging work. Those who served in the most physically demanding positions would qualify at 62, while those qualifications would gradually become easier as ages increase.

2. Raise the minimum benefit

Tetra Images | Getty Images

Long-term low-wage workers who have not earned adequate retirement benefits may qualify for what is known as a special minimum benefit.
However, those benefits have risen slower than regular benefits because they are adjusted differently. Raising the minimum benefit would help, according to the task force.
Lawmakers have also been eyeing the change. One Congressional proposal, the Social Security 2100 Act, would bring lift an estimated 5 million people out of poverty by bringing up the minimum benefit, Rep. John Larson, D-Conn., said during a recent AARP event.

3. Create partial early retirement benefits

Some older workers may continue to work but reduce their hours as they age.
Allowing those workers to claim partial early retirement benefits may help make up for any lost income while also limiting the penalties for claiming before full retirement age. Research has found partial early retirement benefits, combined with the ability to turn the checks on and off, may improve retirement security for millions of Americans, according to the report.

4. Change the earnings test

People who claim Social Security retirement benefits before their full retirement age and who continue to work may be subject to an earnings test.
In 2024, that will apply to earnings above $22,320 per year, up from $21,240 per year in 2023. For every $2 above that limit, $1 in benefits will be withheld. (Higher limits apply for the year someone reaches their full retirement age.)

Importantly, the benefits that are withheld while a beneficiary is working are later added to monthly checks once they reach their full retirement age.
The earnings test may be a disincentive to work and is often misunderstood, according to the report.
By revising the earnings test, that may help bring the U.S. in line with other countries that have smaller annual retirement income reductions for working, according to the report.

Other policy reforms may help

The National Academy of Social Insurance report also highlighted other policy changes that may help workers in physically challenging jobs, including Social Security disability benefit reform, enhancements to services from the Social Security Administration, as well as improvements to other programs and administration.
Notably, that includes the idea of eliminating the reconsideration stage of the appeals process for Social Security disability benefits.
“This was something that actually got a lot of attention at a Ways and Means hearing last week, and actually a lot of bipartisan attention, which was pretty wonderful to hear,” Vallas said.
Other changes suggested in the report include providing employment and training programs for older workers, as well as strengthening unemployment insurance coverage available to them. More

This month, more than 200,000 high school seniors will receive proactive college acceptance offers as part of a new direct admissions program.
The goal is to expand college access, particularly to first-generation and low-income applicants at a time when fewer are choosing to pursue a four-year degree.

More schools offer guaranteed admission

In the wake of the Supreme Court’s affirmative action ruling, colleges are looking for new strategies to recruit students from diverse backgrounds, according to Jenny Rickard, CEO of the Common App.
“It’s about removing barriers,” she said. “It’s about equity and access.”
Each year, more than 1 million students — one-third third of whom are first-generation — use the common application to apply to school, research financial aid and scholarships, and connect to college counseling resources, according to the nonprofit organization.

Individual schools and school systems have also rolled out similar initiatives to broaden their reach. Last spring, the State University of New York sent automatic acceptance letters to 125,000 graduating high school students.

College enrollment is falling

Photo: Bryan Y.W. Shin | Wikicommons

Nationwide, enrollment has noticeably lagged since the start of the pandemic, when a significant number of students decided against a four-year degree in favor of joining the workforce or completing a certificate program without the hefty price tag of the more advanced degree.
This fall, undergraduate enrollment grew for the first time since 2020, according to the National Student Clearinghouse Research Center’s latest report.
But gains were not shared across the board. Community colleges notched the biggest increases year over year, the report found, accounting for almost 60% of the increase in undergraduates.
“Students are electing to pursue shorter-term programs,” said Doug Shapiro, executive director of the National Student Clearinghouse Research Center. “More 18- to 20-year-olds, especially at four-year institutions, are opting out.”

Tuition keeps rising

Not only are fewer students interested in pursuing a four-year degree after high school, but the population of college-age students is also shrinking, a trend referred to as the “enrollment cliff.”
In fact, undergraduate enrollment in the U.S. topped out at roughly 18 million students over a decade ago, according to the National Center for Education Statistics.
These days, only about 62% of high school seniors in the U.S. immediately go on to college, down from 68% in 2010. Low-income students who feel priced out of a postsecondary education are often those who opt out.

Arrows pointing outwards

Recent data from the Common App found that that more than half, or 55%, of students who use the Common App’s online application are from the highest-income families.
Steadily, college is becoming a path for only those with the means to pay for it, other reports also show.
And costs are still rising. Tuition and fees at four-year private colleges rose 4% to $41,540 in the 2023-24 school year from $39,940 in 2022-23. At four-year, in-state public colleges, the cost increased 2.5% to $11,260 from $10,990 the prior school year, according to the College Board.

Financial aid is key

“Just because a school offers acceptance doesn’t mean the finances will line up,” cautioned Robert Franek, The Princeton Review’s editor-in-chief and author of “The Best 389 Colleges.”
“It’s important to ask critical questions,” he said. Students should consider how much aid is being awarded, as well as the academic fit, campus culture and career services offerings.
Further, even if acceptance is not guaranteed, there are many schools that accept the majority of those who apply, Franek said.
In fact, of The Princeton Review’s list of 389 best colleges, 254 schools admit at least half of all applicants. More than one-quarter admit at least 80% of those who apply. (On the flip side, only 8% of schools on the list of best colleges admit less than 10% of applicants.)
“We always think of the most competitive schools but there is a school, and likely many schools, out there to consider,” Franek said. More