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Logo and flags of Bayer AG are pictured outside a plant of the German pharmaceutical and chemical maker in Wuppertal, Germany.
Wolfgang Rattay | Reuters

Company: Bayer AG (BAYRY)

Business: Bayer AG is a 55-billion euro German multinational pharmaceutical and biotechnology company. It operates through three segments: (i) Pharmaceuticals (roughly 6 billion euros of EBITDA); (ii) Consumer Health (about 1.5 billion euros of EBITDA), and (iii) Crop Science (approximately 6.5 billion euros of EBITDA). The company acquired Monsanto in 2018 for 54 billion euros and has since been plagued with several lawsuits related to Monsanto’s Roundup herbicide product causing cancer.
Stock Market Value: $60.5B ($15.41 per share)

Activist: Inclusive Capital Partners

Percentage Ownership: 0.83%
Average Cost: n/a
Activist Commentary: Inclusive Capital Partners is a San Francisco-based investment firm focused on increasing shareholder value and promoting sound environmental, social and governance practices. It was formed in 2020 by ValueAct founder Jeff Ubben to leverage capitalism and governance in pursuit of a healthy planet and the health of its inhabitants. As a pioneering active ESG (“AESG”) investor, Inclusive seeks long-term shareholder value through active partnership with companies whose core businesses contribute solutions to this pursuit. Their primary focus is on environmental and social value creation, which creates value for shareholders.

What’s Happening?

Inclusive Capital Partners has acquired a 0.83% interest in BAYRY for investment purposes.

Behind the Scenes

As an impact-focused investor, Inclusive’s portfolio companies always have a dual mandate of being a compelling value proposition and generating a measurable positive impact on the environment and society. The firm’s thesis at Bayer is no different. Inclusive believes that Bayer, as a leader in the global agribusiness industry, is well-positioned to develop and proliferate technology which addresses humanity’s challenge of boosting food supply in the wake of increased global demand while also decreasing environmental impact.

Crop farming is a large contributor to global greenhouse gas emissions. Bayer’s crop science division accounts for approximately 25% of global crop farming. Bayer has been doing a good job at its core value objective of increasing crop yields and agricultural productivity by using innovative technologies and developments in crop science that also offer substantial positive environmental impact. For example, their short-stature corn adds 15% more productivity while also retaining more carbon in the soil and resulting in less waste than standard tall corn varieties that are more easily knocked over by the wind. Also, dry rice seed has the potential to increase yield per acre and produces less methane emissions than wet rice. Additionally, Bayer is working to advance gene-edited crops using CRISPR technology, which Inclusive believes will be more accepted and faster to move to market than genetically modified crops. Emerging crops, including those that are gene-edited, are expected to offer a myriad of benefits, such as improving yields, thus decreasing agricultural land demand and deforestation and reducing reliance on pesticide and fertilizer. Ultimately, these crops result in increased food security and yields of staples like corn, wheat, rice and soy.
Inclusive highlights Bayer’s incumbency in crop science exemplified by the company’s size, talent, significant cashflow and a $2 billion R&D budget. All of this can be used to acquire, develop and scale emerging technologies with the potential for systems change. Inclusive’s focus on impact at scale is why the firm sees the conventional ESG approach to “reject and replace” imperfect incumbents as insufficient to address global challenges.
Often Inclusive invests in companies where ESG improvements drive shareholder value. In this case, it is almost the opposite: Creating shareholder value in the form of a higher stock price and a lower cost of capital will allow Bayer to finance additional ESG opportunities that will also increase crop yield and profitability.
There are several ways to create this shareholder value. First, the board should explore de-conglomerating, primarily by spinning off Monsanto, which would pave the way for a sale of at least the Consumer Health business. Bayer currently trades at approximately 7x earnings while its pure-play crop science peer, Corteva, trades at closer to 20x earnings. If Monsanto got a 20x multiple as a pure play, even after deducting $10 billion of litigation liability, it would be worth the entire market cap of Bayer today. Second, the company could put this Roundup-related litigation to bed with a global settlement. Between August 2018 and May 2019, Bayer lost three lawsuits. This resulted in approximately $11 billion in settlements. However, the company has won its last six lawsuits, which should make settling the remainder easier. Even a $10 billion global settlement would likely benefit the stock price as it would remove a ton of uncertainty and make Bayer a buyable stock for many investors who would not touch it right now. Third, Inclusive is looking to bring in a new CEO as early as its next annual meeting in the spring of this year. Werner Baumann has been serving as CEO since 2016. In September 2020, the company extended his contract until the end of April 2024. Baumann was instrumental in the Monsanto acquisition and is probably the last person who would now support spinning it off and settling its claims. This needs to be done by a fresh CEO who holds no ownership over the Monsanto deal.
Inclusive is an amicable investor that is often invited onto boards and rules by the power of persuasion. We expect this situation to be no different, particularly since the firm is likely receiving a lot of support from other shareholders who have shown their displeasure for many years. In 2019, Baumann lost a vote of no confidence at the company’s annual meeting, with 55.5% of investors voting against ratifying the top management’s actions. In March 2022, Temasek Holdings (a 3% shareholder at the time) called for the replacement of Baumann as CEO. In April 2022, shareholders voted against a management compensation plan.
Jeff Ubben has always liked companies that were misunderstood by the market, and he has another one here. Due to the Monsanto litigation, Bayer is perceived as a bad actor and is somewhat uninvestable to many. Spinning off Monsanto and settling the litigation should remove that stigma. Focusing on the ESG innovations that increase crop yield and efficiency will change the company’s image to one of impact and value. This is a prime example of how Inclusive actively and qualitatively uses ESG and activist value creation together to benefit shareholders.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and he is the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Squire is also the creator of the AESG™ investment category, an activist investment style focused on improving ESG practices of portfolio companies.

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Today’s workers are tasked with making sure they will have enough money when they retire while also juggling competing financial priorities.
While planning for retirement may seem daunting, experts say there are strategic moves you can make to improve your lifestyle later on.

Mstudioimages | E+ | Getty Images

To maintain your standard of living in retirement, the rule of thumb is you need to be able to replace at least 70% of the income you had while you were working.
But many retirees fall short of that retirement income goal, according to research from Goldman Sachs Asset Management. The survey polled 1,566 U.S. participants between July and August 2022.

Just 25% of retirees generate that amount of income, the firm’s research found. Meanwhile, more than half of retirees — 51% — make do with less than 50% of their pre-retirement income.
The gap isn’t surprising, considering that more than 40% who are still working say they are behind schedule on their retirement savings. Members of the Gen X generation — who are sandwiched between millennials and baby boomers — were most likely to say they are behind on retirement, with more than 50%.
Competing life goals and financial priorities — a so-called financial vortex — may get in the way as savers balance other roles as parents or caretakers and as homeowners or renters.
“You have all these competing priorities that can crowd out retirement savings,” said Mike Moran, senior pension strategist at Goldman Sachs.
If you’re still working, there are steps you can take to meaningfully increase your cash flow in your later years and improve your chances of meeting that 70% income replacement ratio.

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1. Downsize your lifestyle

By reducing your cost of living now, you will need less income in retirement. Ask yourself whether you spend less than you make, suggested Sharon Carson, a retirement strategist at J.P. Morgan Asset Management.
“If you’re not already doing that, that’s the perfect place to get started,” she said.
Ted Jenkin, CEO and founder of Oxygen Financial and a member of CNBC’s Financial Advisor Council, said he recommends a 21-day budget cleanse to help people cut back their spending.
Over 21 days, shop every single bill in your household to see if you can get a better deal.

2. Nudge your savings higher

Even if your budget is tight, increasing how much you set aside toward retirement by even 1% of your salary can go a long way when you eventually need to draw down that money.
Generally, you should be socking away 15% of your salary toward retirement, according to retirement experts at J.P. Morgan Asset Management. That can include a company match, if you have one.
You may not get to 15% right away.
“Look at what you can do every year,” said Carson. “If you can do something, you have the long-term advantage of the compounding.”

3. Find ways to save outside of work plans

If you don’t have access to a 401(k) or other retirement savings plan through your employer, you’re not alone. As many as 57 million Americans lack access to a workplace retirement savings plan, according to estimates.
You may still contribute be able to an individual retirement account with pretax money, or with post-tax money through a Roth IRA. Some restrictions apply. For example, there are some limits on pretax contributions if a spouse has a workplace plan, and post-tax Roth contributions depend on your income.
Many states are also stepping up to provide retirement savings programs to workers who lack access to employer plans.

4. Stay invested

Carl Smith | Getty Images

The No. 1 preferred source of retirement income for retirees surveyed by Goldman Sachs was investments, Moran said. To get more income from your portfolio, you may want to consider dividend-paying stocks or municipal bonds, he said.
The key is to stay invested, and not put your money in and out of the market, Carson said.
Admittedly, losses hurt. But trying to time the market can be a losing battle, particularly because the market’s worst days tend to be closely followed by their best days.
“If you try to time the market, you need to be right twice,” Carson said.

5. Delay claiming Social Security benefits

The longer you wait to claim Social Security retirement benefits up to age 70, the bigger your monthly checks will be.
You may claim starting from age 62, but your benefits will be reduced.
At full retirement age — ages 66 through 67, depending on when you were born — you will receive the full benefits you earned.
For every year you delay past that age, up to age 70, you stand to receive an increase of up to 8%.
It’s still smart to wait, even with a historic high 8.7% cost-of-living adjustment this year, experts say.
The COLA increases what is known as your primary insurance amount, the benefit due to you at your full retirement age. The longer you continue to delay claiming, the higher your benefits will be and the bigger the impact the annual cost-of-living adjustments may have.

6. Consider an annuity

Wand_prapan | Istock | Getty Images

As pensions have gone by the wayside, products called annuities have become a way to create a stream of income in retirement. You will have to sacrifice a lump sum of money upfront in exchange for a steady stream of monthly checks in retirement.
A deferred annuity, which can provide income at a future date, can help if you’re worried about running out of money later, Moran said.
Some immediate or variable annuities, which may provide checks sooner, are offering attractive guarantees, Jenkin noted.
Because these contracts are binding, it helps to proceed with caution.
Make sure the fees and costs are not out of line, Jenkin said, and do not buy a product pushed by someone at a dinner seminar.
“The best advice is to hire somebody for an hourly rate to go shop the products for you,” he said. “Do not pay anybody a fee or a commission to sell it.”

7.  Plan to work a little longer

The second most preferred source of retirement income is part-time work, Goldman Sachs’ research found.
There are many benefits to that. Your income may not disappear entirely when you retire. Plus, you may still get the social benefit of interacting with colleagues, according to Moran.
The extra income you earn may help you delay Social Security benefits or withdraw less from your retirement portfolio, helping to make sure your money lasts longer for the years to come.

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Inflation has pushed Social Security’s annual increases up to historic highs for the past couple of years.
That may trigger a bigger tax bill for some beneficiaries. But proper planning can help.

Allison Michael Orenstein | Getty Images

Social Security recipients are just starting to see the record 8.7% cost-of-living adjustment in their monthly checks.
But come tax time, they could see surprises resulting from last year’s 5.9% increase, which at the time was the biggest COLA in four decades.

Last year’s 5.9% cost-of-living adjustment was like getting a 6% wage bump in 2022, according to Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League. Yet that boost to benefits was not enough to keep up with rising costs, according to recent research from the nonpartisan senior group.
A recent survey by The Senior Citizens League found 57% of older taxpayers worry more of their Social Security benefits will be taxed due to last year’s 5.9% cost-of-living adjustment. The survey, which was conducted last summer, included about 1,500 participants.
“There are a tremendous amount of people who are concerned,” Johnson said.
More Social Security beneficiaries may be required to file tax returns this season, but that will likely be a “relatively small number,” predicts Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities.
For beneficiaries who do file, the higher benefit income may be partly offset by a larger standard deduction and indexing of the tax brackets, he said.

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The new 8.7% cost-of-living adjustment that went into effect this month may make tax planning more complicated for more than 65 million beneficiaries who rely on Social Security checks.
From a tax savings perspective, there is not much you can do to mitigate your liability for this tax filing season, according to Brian Vosberg, a certified financial planner and enrolled agent who is president of Vosberg Wealth in Glendora, California.
“Once it’s Dec. 31, there’s very little you can do to actually minimize your tax liability,” Vosberg said.
One exception is if you make a prior-year contribution to an individual retirement account before April 15, which can help reduce your taxable income.
However, beneficiaries would be wise to get a jump on their tax planning for next year to mitigate the effects of the 8.7% cost-of-living adjustment.

How Social Security benefits are taxed

Social Security benefits are taxed based on a formula called combined income.
“The max Social Security that can be included in taxable income is 85%,” Vosberg said. “So you always will get 15% of your benefit non-taxable.”
Combined income includes your adjusted gross income, nontaxable interest and half of your Social Security benefits. Income including interest, dividends, capital gains and distributions from 401(k)s or IRAs are all added into that equation, Vosberg said.

Up to 50% of benefits are taxed for individual tax filers with between $25,000 and $34,000 in combined income and those who are married and filing jointly with between $32,000 and $44,000 in combined income.
Up to 85% of benefits may be taxable for individuals with more than $34,000 in combined income or married couples with over $44,000.
Because those thresholds are not adjusted for inflation, more beneficiaries may be subject to taxes on their benefits.
As interest rates rise, you may also be earning higher interest payments on your cash, which could also push up your combined income, Vosberg said.
One caveat for 2023 is the IRS has put in place higher federal tax brackets to adjust for inflation.

Tips to minimize the tax bite

For beneficiaries, now is a good time to plan their 2023 income to ensure the most tax efficient blend of income, Vosberg said.
For example, if you’re budgeting for $5,000 in income per month, and your monthly Social Security checks are $2,000, you may look to withdraw money you’ve already paid tax on for the remaining $3,000. That may include traditional savings or Roth IRAs.
“You blend the income and you can effectively control your taxes in retirement,” Vosberg said.
“A lot of times [that can] reduce the tax that you’re paying or even eliminate the tax that you’re paying on Social Security,” he said.
To accomplish that, it is important to loop in a qualified tax planner or CPA, Vosberg said.
Pre-retirees can also benefit from professional guidance. By building up their post-tax money through savings or Roth conversions in the years leading up to retirement, they may more effectively control their taxable income later on, Vosberg said.

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Despite mass layoff announcements at major tech companies this week, the overall job market remains strong, experts say.
That makes this a good time to be looking for a new position, even if unexpectedly.
Here are a few key considerations before kicking off a search.

Whether by choice or necessity, many workers will change jobs in the months ahead.
Some companies, particularly tech giants, have been announcing deep cuts to their workforces as they face ongoing challenges due to rising interest rates and inflation.

Most recently, Google said that it will lay off 12,000 people, Amazon announced a fresh wave of job cuts affecting more than 18,000 people, and Microsoft said it plans to lay off 10,000 workers amid fears of an oncoming recession.
At the same time, government data shows the U.S. labor market is still strong, with a record low unemployment rate of 3.5%.
Many industries continue to do very well, according to Barbara Safani, president of Career Solvers in New York. The tech layoffs don’t “necessarily reflect on the broader job market,” she said.
And the Federal Reserve has demonstrated it can raise rates without jeopardizing the robust labor market so far, Randy Frederick, managing director of trading and derivatives for Charles Schwab, recently told CNBC.
“If you can engineer a decline in inflation without crushing the jobs market, that’s the ‘Goldilocks’ soft landing,” he said. 

96% of workers will look for new job in 2023

In general, “the first quarter of the year is always a good time to look because fiscal budgets have been replenished,” Safani said. 
Overall, a whopping 96% of workers are looking for a new job in 2023, largely in search of better pay, according to a recent report by jobs site Monster.com. 
“This is phenomenally high,” even compared with the numbers at the height of the “great resignation,” said Vicki Salemi, career expert at Monster.
Nearly half, or 40%, of job seekers said they need a higher income due to inflation and rising expenses, Monster found. Others said they have no room to grow in their current role or that they are in a toxic workplace.
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Job-switching is widely considered the best way to improve your career prospects and pay. In fact, the difference in wage growth for job switchers relative to those who stay in their current role is at a record high.
The latest data shows job switchers have seen 7.7% wage growth as of November, while workers who have stayed in their jobs have seen 5.5%, according to Daniel Zhao, lead economist at Glassdoor, citing data from the Atlanta Federal Reserve.

Key considerations when looking for a new job

For those kicking off a job search, Safani advises clients to consider how all aspects of a new position measure up.
“Really look at it holistically,” she said. “You may be getting paid more, but it’s important to vet that opportunity.” Other factors to consider include opportunities for advancement, flexibility and a healthy work-life balance.
“Do your research,” Salemi advised. “Find out what the benefits are, find out what the culture is like.”
“Workers can have both — a higher salary and a positive, healthy work environment.”
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The share of Americans who say they or a family member delayed medical treatment due to cost rose to 38% in 2022 from 26% in 2021, according to a Gallup poll.
That percentage is the highest since the polling organization began taking the measurement in 2001.
Are you struggling with health-care costs? Taking these steps can help, experts say.

Iona Studio | Istock | Getty Images

More people in the U.S. are deciding to hold off on medical care for financial reasons.
The share of Americans who say they or a family member delayed medical treatment due to cost rose to 38% in 2022 from 26% in 2021, according to the results of a Gallup poll released Jan. 17.

That percentage is the highest since the polling organization began taking the measurement in 2001, at which point 19% of people answered they’d postponed health care because of money. The latest result also marks the sharpest year-over-year increase in the survey’s history.
A large share of the delays in treatment last year were for health conditions that the respondents described as either somewhat or very serious.

“People are stretching out drugs and avoiding doctor visits for diabetes, heart disease and other chronic diseases, which can cause the problems to spiral out of control,” said Carolyn McClanahan, a certified financial planner and physician who is the founder of Life Planning Partners in Jacksonville, Florida.
If you are struggling with health-care costs, taking these steps can help, experts say.

1. Start with in-network providers

One way to save on medical expenses is to make sure your doctors are in network for your insurance plan, “as out-of-network care can be very expensive,” said McClanahan, a member of CNBC’s Financial Advisor Council. The same goes for hospitals, labs and other medical providers you anticipate using.

You can check with your insurer as well as the provider you’d like to see to find out if they’re in network. Sometimes, doctors leave a network, McClanahan said, so you want to check this again if you haven’t seen a provider in some time.
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“Always start with your primary care physician, where your copay or out-of-pocket cost will be lowest,” said Caitlin Donovan, a spokeswoman for the National Patient Advocate Foundation.

2. Make the most of reaching your deductible

Planning for care with consideration of your deductibles is another cost-saving strategy, McClanahan said.
Your deductible is the amount you have to pay for your health care before your coverage kicks in. The average single employee had a deductible of around $1,760 in 2022, according to the Kaiser Family Foundation.
If you reach your deductible, you might want to squeeze in other care or treatments within the same year to cut costs, McClanahan said.
Certain preventive care, including screenings and immunizations, are often covered without consideration of your deductible.

In fact, early detection for conditions like cancer can save your life.

Caitlin Donovan
a spokeswoman for the National Patient Advocate Foundation

Those who pass their out-of-pocket maximum for the year — the most you have to pay for covered services in a plan year — would especially benefit from seeking any other needed treatments within the year. They should be fully covered after that point, McClanahan said.
“For example, do you have skin lesions that you need checked? Do you have joint or muscle issues that could benefit from physical therapy? Is it time for your colonoscopy?” she said.

3. ‘Be an engaged patient’

Working to stay informed about your health and any necessary treatments, along with practicing a little skepticism about what you’re told by medical professionals, can also help keep down costs, McClanahan said.
“Be an engaged patient to make sure you get the appropriate care,” she said. “If a doctor wants to order a test or do a procedure, ask the following: ‘How will this test change what you do for me? If it isn’t going to change anything, does it really need to be done?'”
“Unnecessary testing adds costs and puts the patient at risk of false positive testing, which means the doctor has to do more tests to prove something isn’t wrong,” McClanahan said.

Often, she said, there are alternatives to possibly costly medications, tests and procedures. For example, in some cases, high cholesterol or high blood pressure can be turned around by dietary and lifestyle changes, she said.
Lastly, she advises patients to keep comprehensive histories of their medical records, including any procedures or tests they’ve had done, to cut down on needless and potentially expensive redundant ones down the road.

4. Seek help with costs

If you’re anticipating a hospital stay, review its website for information about financial assistance programs, Donovan said. “You may qualify for a reduced or even no-cost stay,” she said.
In some cases, you can set up a payment plan with a hospital or provider.
There are also a number of charitable organizations that assist people with their health-care costs, Donovan said. For example, at Copays.org, you can apply for funds to put toward copays, premiums, deductibles and over-the-counter medications.
The National Patient Advocate Foundation has a financial resource directory in which you can search for local aid for everything from dental care to end-of-life services.
Some older Americans may be eligible for assistance with their monthly premiums under the Medicare Savings Program, Donovan said. “If you qualify, your premiums, deductibles and copays will be covered, which would be an enormous financial relief for anyone,” she said.
In addition, those enrolled in Medicare Part D, which covers prescriptions, should look to see if they qualify for Extra Help. That program can reduce the costs related to your drugs, Donovan added.
But the last thing you want to do is put off taking care of yourself, she said.
“Getting onto a treatment plan immediately may delay the debilitating effects of a condition, like muscle degeneration,” Donovan said. “In fact, early detection for conditions like cancer can save your life.”

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If debt ceiling negotiations are unsuccessful, the U.S. could default on its debt.
Here’s why some worry that could result in Social Security and Medicare delays, and proposals for cuts to those programs.

The clock is ticking for the U.S. to avoid a default on its debt, and some are sounding the alarm about potential disruptions to Social Security and Medicare.
On Thursday, Jan. 19, the U.S. outstanding debt hit its statutory limit.

The debt limit or debt ceiling is the total amount of money the U.S. can borrow to meet its legal obligations including Social Security and Medicare benefits, as well as military salaries, tax refunds, interest on the national debt and other payments.
In a Jan. 13 letter, Treasury Secretary Janet Yellen warned House Speaker Kevin McCarthy, R-Calif., Senate Majority Leader Chuck Schumer, D-New York, and other congressional leaders of the possible “irreparable harm” that could come to the U.S. economy, Americans’ livelihoods and global financial stability if the problem goes unresolved.
“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” Yellen wrote.

izusek | E+ | Getty Images

On Thursday, the U.S. began taking “extraordinary measures” to avoid defaulting on its obligations, Yellen wrote in an updated letter to congressional leaders.
The Treasury Department cannot provide an estimate of how long the government can expect to pay the government’s obligations through extraordinary measures, according to Yellen. But it is unlikely that cash will be exhausted before early June, she said.

Negotiations over the federal debt ceiling mark one of the first big challenges the new Congress will face.
McCarthy has agreed to tie lifting the debt ceiling to spending cuts. That has advocates for Social Security and Medicare worried that lawmakers will try to amend those programs.
“We’re looking at as early as June for a train wreck on this issue,” said Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.
“The consequences are dire, because a default would not only disrupt Social Security and Medicare benefits, but also cause a global economic recession or worse,” he said.

How benefit payments could be delayed

If the U.S. were to default on its debt, it would be unprecedented.
The big question is whether the Treasury Department would be able to prioritize what does and does not get paid if that occurs.
Unlike a government shutdown, where Social Security and Medicare benefits continue to flow, that may not be the case with a default, according to Adcock.
“There’s a good chance that benefits for retirees and people with disabilities and survivors would be disrupted,” he said.
Even a short delay could interfere with beneficiaries’ ability to pay for health care, food, rent, utilities or other necessary expenses, the National Committee to Preserve Social Security and Medicare said in a statement on Thursday.

Halfpoint Images | Moment | Getty Images

The Treasury Department may be able to prioritize some payments, and that would include Social Security, said Jason Fichtner, chief economist at the Bipartisan Policy Center who previously served in several senior roles at the Social Security Administration.
However, the Social Security Administration may delay payments to ensure it has enough cash on hand, he said.
Meanwhile, Medicare payments may fluctuate, while other areas like federal employee salaries and food benefits through SNAP (the Supplemental Nutrition Assistance Program) may stop. The process may be politically “messy,” Fichtner said.
“Social Security I’m sure will get paid, interest on the debt will get paid,” he said. “After that, flip a coin, who gets paid?”

Why some worry about Social Security benefit cuts

As House Republicans plan to focus on curbing government spending, some worry that could entail cuts to Social Security benefits and Medicare in exchange for votes to increase or suspend the debt limit.
Among the ideas Republicans have pitched include raising Social Security’s full retirement age to 70, changing the way benefits’ annual cost-of-living adjustments are measured to make them less generous, or making it so benefits are means tested through the middle class, Adcock said.
Moreover, they could raise the Medicare eligibility age to 67 from 65, he said.
To make those changes, there would need to be enough support in the Senate, with 60 votes.
“That’s a pretty high threshold,” Adcock said. “I don’t think there would be 60 votes in the Senate to do benefit cuts.”
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The White House has also indicated it is not willing to negotiate.
“As President Biden has made clear, Congress must deal with the debt limit and must do so without conditions,” White House press secretary Karine Jean-Pierre said Tuesday.
For Social Security reform to progress successfully, both parties would need to come to the table and be willing to make concessions, Fichtner said.
Without such a bipartisan legislative proposal on paper by June, it would be difficult to include Social Security in the debt ceiling negotiations, he said.
“With Social Security, you’re going to have to have a grand bargain that includes changes to the benefit formula and revenue increases,” Fichtner said.
“And that’s just not something that they can get done in a debt crisis environment,” he said.

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The average price for a used car was $30,899 last month, according to CoPilot.
That amount is $7,146 more than if projected depreciation forecasts had held true.
Some models’ prices have dropped more in recent months than others.

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There’s still a ways to go before used car prices come back down to earth.
While prices were 8.8% lower in December from a year earlier, consumers continue to pay more for used cars than they would if typical depreciation expectations were in play, according to car-shopping app CoPilot, which tracks those price premiums in a monthly report.

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Last month, the average price for a used car was $30,899, according to CoPilot. That amount is $7,146 (or 30%) more than if projected depreciation forecasts had held true. However, the price is headed in the right direction for consumers: Six months ago, the app estimated, car buyers were paying about $10,000 above “normal.”
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“With the average price premium still at 30%, used car prices in America still have a long way to fall before they return to normal,” CoPilot’s report notes.
Demand in the used car market skyrocketed during the pandemic as supply chain issues hampered automakers’ ability to produce new vehicles. That situation is now easing, with modest improvements in dealer inventory as rising interest rates put pressure on affordability. The average price of a new car is $46,382, according to an estimate from J.D. Power and LMC Automotive.

The average interest rate on a used car loan is 10.25%

Yet turning to a used car generally doesn’t yield a better rate when financing. The average interest rate on a used car loan was 10.25% in December, compared with 6.68% to finance a new vehicle, according to Edmunds. That compares with 7.4% and 4.1%, respectively, a year earlier.

In addition, the rate you pay is partly based on your credit score — the higher that three-digit number, the lower the rate you can qualify for.
And, of course, the price depends on the specifics of the car itself.

Nearly new cars are $9,606 above ‘normal’

By age, nearly new vehicles (1 to 3 years old) have an average listing price of $40,273, which is $9,606, or 31%, more than the projected normal amount of $30,667, according to the CoPilot index.

In the 4- to 7-year-old range, the average price is $29,400, an amount that’s $6,731, or 30%, more than the “normal” price of $22,669. Vehicles 8 to 13 years old come with an average price of $18,018, or $4,621 more (about 35%) than the previously forecast $13,397.

Used cars with the biggest price drops

Some car prices have dropped more than others. The chart below shows the 10 used cars whose prices fell the most in two months (September to December), according to iSeeCars.

Meanwhile, the squeeze on new car production during the last couple of years may serve as a headwind in the used car market going forward.
“Inventory shortages of new cars in 2021 and 2022 mean that there are noticeably fewer [of those] model-year vehicles on the road today that will become used cars in the future,” said Joseph Yoon, consumer insights analyst for Edmunds.

Additionally, Yoon said, many 1- to 3-year-old cars that end up at dealerships for sale are leased cars that were returned, and the number of customers leasing their cars has dropped to 16% in December from 29% two years earlier.
“Rental fleets also suffered dramatically from new vehicle shortages, further reducing a reliable stream of late-model used vehicles for consumers to choose from,” Yoon added.

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Higher credit scores pave the way to lower rates, potentially saving thousands of dollars in interest charges.
The highest tier is anything over 800, which can unlock even better terms.
Here’s a breakdown of how your credit score is calculated and ways you can improve it.

Generally speaking, the higher your credit score, the better off you are when it comes to getting a loan.
FICO scores, the most popular scoring model, range from 300 to 850. A “good” score generally is above 670, a “very good” score is over 740 and anything above 800 is considered “exceptional.”

Once you reach that 800 threshold, you’re highly likely to be approved for a loan and can qualify for the lowest interest rate, according to Matt Schulz, LendingTree’s chief credit analyst. 
More from Personal Finance:Here’s the best way to pay down high-interest debt63% of Americans are living paycheck to paycheck’Risky behaviors’ are causing credit scores to level off
There’s no doubt consumers are currently turning to credit cards as they have a harder time keeping up with their expenses and there are a lot of factors at play, he added, including inflation. But exceptional credit is largely based on how well you manage debt and for how long.
Earning an 800-plus credit score isn’t easy, he said, but “it’s definitely attainable.”

Why a high credit score is important

The national average credit score sits at an all-time high of 716, according to a recent report from FICO.

Although that is considered “good,” an “exceptional” score can unlock even better terms, potentially saving thousands of dollars in interest charges. 
For example, borrowers with a credit score between 800 and 850 could lock in a 30-year fixed mortgage rate of 6.13%, but it jumps to 6.36% for credit scores between 700 and 750. On a $350,000 loan, paying the higher rate adds up to an extra $19,000, according to data from LendingTree.

4 key factors of an excellent credit score

Here’s a breakdown of four factors that play into your credit score, and ways you can improve that number.
1. On-time payments
The best way to get your credit score over 800 comes down to paying your bills on time every month, even if it is making the minimum payment due. According to LendingTree’s analysis of 100,000 credit reports, 100% of borrowers with a credit score of 800 or higher paid their bills on time, every time. 
Prompt payments are the single most important factor, making up roughly 35% of a credit score.
To get there, set up autopay or reminders so you’re never late, Schulz advised.
2. Amounts owed
From mortgages to car payments, having an exceptional score doesn’t mean zero debt but rather a proven track record of managing a mix of outstanding loans. In fact, consumers with the highest scores owe an average of $150,270, including mortgages, LendingTree found.
The total amount of credit and loans you’re using compared to your total credit limit, also known as your utilization rate, is the second most important aspect of a great credit score — accounting for about 30%. 
As a general rule, it’s important to keep revolving debt below 30% of available credit to limit the effect that high balances can have. However, the average utilization ratio for those with credit scores of 800 or higher was just 6.1%, according to LendingTree.
“While the best way to improve it is to reduce your debt, you can change the other side of the equation, too, by asking for a higher credit limit,” Schulz said.
3. Credit history
Having a longer credit history also helps boost your score because it gives lenders a better look at your background when it comes to repayments.
The length of your credit history is the third most important factor in a credit score, making up about 15%.
Keeping accounts open and in good standing as well as limiting new credit card inquiries will work to your advantage. “Lenders want to see that you’ve been responsible for a long time,” Schulz said. “I always compare it to a kid borrowing the keys to the car.”
4. Types of accounts and credit activity
Having a diversified mix of accounts but also limiting the number of new accounts you open will further help improve your score, since each make up about 10% of your total.
“Your credit mix should involve more than just having multiple credit cards,” Schulz said. “The ideal credit mix is a blend of installment loans, such as auto loans, student loans and mortgages, with revolving credit, such as bank credit cards.” 
“However, it’s very, very important to know that you shouldn’t take out a new loan just to help your credit mix,” he added. “Debt is a really serious thing and should only be taken on as needed.”
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