Latest news with #ConsumerPriceIndexforAllUrbanConsumers
Yahoo
15-07-2025
- Business
- Yahoo
Social Security's 2026 COLA Could Be the Worst in Years, but Millions of Retirees Will Get a Big Financial Boost Anyway
The 2026 annual cost-of-living adjustment (COLA) could come in light again based on recent data. As inflation has slowed, COLAs have come down in recent years. However, millions of retirees who are at least 65 should see significant savings from recent legislation. The $23,760 Social Security bonus most retirees completely overlook › Each year, millions of retirees wait anxiously for the Social Security Administration (SSA) to announce the new annual cost-of-living adjustment (COLA). The COLA determines how much Social Security benefits will increase the following year and helps retirees, many of whom rely on Social Security for all or a significant part of their income, budget for the following year. While it's still months before the 2026 COLA is announced, recent data suggests retirees could be looking at the lowest COLA in years. However, millions of retirees will get a big financial boost anyway. The COLA is always determined based on inflation data from the third quarter of each year. Unlike the broader market, which relies heavily each month on the Consumer Price Index for All Urban Consumers (CPI-U), the SSA relies on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). While the CPI measures the change in prices for 93% of the U.S. population, the CPI-W only covers about 29% of the population and measures expenses more common to the blue-collar workforce. To calculate the following year's COLA, the SSA looks at the year-over-year percentage change for the average CPI-W in July, August, and September. Here are the last four COLAs: 2022: 5.9% 2023: 8.7% 2024: 3.2% 2025: 2.5% In recent months, data has pointed to slowing inflation. The monthly year-over-year change in the CPI-W has gone from 2.97% in January to 2.17% in May. There's still time before the data that actually counts toward the COLA comes into play, and factors like tariffs have the potential to make inflation change course. But if the CPI-W stays on its current trajectory, retirees are looking at the worst COLA in five years. COLAs are a bit of a double-edged sword because retirees also benefit from a cheaper cost of living, but many argue that COLAs have not been able to keep pace with inflation since the turn of the century. Recently, another factor will come into play that's going to help people who are at least 65 years old: President Donald Trump's "big, beautiful bill," a large budget reconciliation package. The primary goal of the legislation is to pass trillions in tax cuts and allocate funds for border security, but such a large bill includes many other provisions. The big one for retirees is a $6,000 additional senior tax deduction, or $12,000 for joint filers. To be clear, this is not aimed specifically at retirees collecting Social Security but anyone who is 65 or older, regardless of whether or not they receive Social Security benefits. To be eligible for the full deduction, single filers can make no more than $75,000, while joint filers can make no more than $150,000. The deduction completely phases out at $175,000 for single filers and $250,000 for joint filers. According to an analysis conducted by the White House's Council of Economic Advisers, the bonus deduction stands to benefit millions of Americans who receive Social Security benefits and pay taxes on them. Citing U.S. Treasury data, the Council found there were 58.5 million people age 65 and over receiving Social Security benefits in 2024. Of this group, 37.4 million received exemptions and deductions that exceeded their taxable Social Security income. With the new bonus deduction, this number will jump by over 14 million to 51.4 million, representing 88% of beneficiaries who are 65 or older and receiving Social Security. The deduction is temporary. It will go into effect next year (for the 2025 tax bill) and last through the 2028 year's taxes. The tax savings for a married couple with $100,000 of income could be roughly $1,600 per year, according to The Wall Street Journal. The average monthly benefit of a retired worker in May was $2,002, or about $24,024 a year. Assuming both people in a marriage receive that benefit (for a total of $48,048), the savings will amount to roughly 3.3% of the married couple's combined average benefits. That is equal to the average COLA since 1975 and above the average 2.6% COLA since the turn of the century. Remember, these savings are in addition to the 2026 COLA, whatever it ends up being. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Social Security's 2026 COLA Could Be the Worst in Years, but Millions of Retirees Will Get a Big Financial Boost Anyway was originally published by The Motley Fool
Yahoo
24-06-2025
- Business
- Yahoo
Will President Trump's Tariffs Inadvertently Boost the 2026 Social Security COLA?
It looks like actions by the Trump administration will result in some level of tariffs on most countries. Many economists expect tariffs to boost inflation to some degree. Higher inflation is generally considered bad, but it can be a good thing when it comes to Social Security benefits. The $23,760 Social Security bonus most retirees completely overlook › President Donald Trump imposed sweeping "reciprocal" tariffs on all of the United States' largest trading partners in early April. A 90-day pause on most of these tariffs followed in mid-April to give the countries time to negotiate individual trade deals. However, Trump still set a base tariff level of 10% for everyone except China. Roughly 75 days into the pause, very few trade deals have actually been signed, and the 10% base tariffs remain (even for countries that signed deals), suggesting that some level of tariffs is here to stay as long as President Trump is in charge. Many experts argue that tariffs will result in higher levels of inflation. Coincidentally, inflation is used to calculate Social Security's annual cost-of-living-adjustment (COLA). The speculation is that the rise in inflation will result in a larger-than-expected COLA boost in 2026. Given that tariffs have not been this high for some time (and have never been this high across so many countries), we are in a bit of uncharted territory. There is some dispute over how much impact tariffs will have on inflation, and complications like a slowing economy or recession make coming up with accurate predictions even harder. Here are some thoughts on how tariffs could lead to higher-than-expected Social Security benefits in 2026 to help you prepare for whatever ends up happening. Since surging to 9.1% at its peak in June 2022, the annualized rate of inflation has fallen significantly, coming in at 2.4% in May, according to the U.S. Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI-U). That rate isn't far off from the Federal Reserve's mandated goal of maintaining a 2% annualized rate of inflation. Many experts are concerned that tariffs, which are an excise tax on imports, are likely to initially boost inflation in the first year they are enacted (before potentially settling into a new, higher standard). The simple thesis is that if companies have to pay a tax to sell certain goods brought in from other countries to the U.S., they will pass as much of that cost onto the consumer as they can, leading to higher prices. So far, there has been little effect from these new tariffs on inflation, but that could be deceptive. Economists think the impact of tariffs will eventually be felt by consumers. "We believe the limited impact from tariffs in May is a reflection of pre-tariff stockpiling, as well as a lagged pass-through of tariffs into import prices," Nomura's senior economist Aichi Amemiya wrote in a recent research note, reported on by CNBC. "We maintain our view that the impact of tariffs will likely materialize in the coming months." RSM's Chief Economist, Joseph Brusuelas, according to CNBC, offered up his own research note that says he's already seeing evidence of tariffs beginning to hit prices. Recent data shows higher prices for products frequently imported, such as canned fruits and vegetables, coffee, tobacco, durable goods, and some major appliances. The report said the price spikes in appliances mirrored those seen in 2018-2020 when President Trump last levied tariffs during his first administration. The indications are that tariff rates for certain countries will end up being far higher than expected. For instance, tariffs on Chinese goods are now at 55% following a tentative deal reached between the two countries. That rate includes the 25% tariffs put on China in Trump's first term. Tariffs on Vietnam could land in the 20% to 25% range. These rates are lower than the punitive tariff rates initially imposed on "Liberation Day" but still higher than at any time in modern history. A key part of the Social Security program is the annual COLA. The COLA is intended to help benefits keep pace with inflation, although many would argue it has not achieved this goal for some time. Regardless, the COLA typically increases benefits each year unless inflation is zero or prices actually decrease. Given that the goal of the COLA is to keep pace with inflation, the annual COLA is determined based on inflation data. The Social Security Administration (SSA) uses data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine the COLA. The SSA specifically uses the data from the third quarter of the year, which includes the months of July, August, and September. The SSA takes the year-over-year percentage difference of the CPI-W in each of these three months and then averages the three numbers together to arrive at the COLA. For 2025, the annual COLA was 2.5%. Here are the year-over-year percentage differences in the CPI-W for each month so far in 2025: January 3% February 2.7% March 2.2% April 2.1% May 2.2% As you can see, inflation per the CPI-W has been trending lower. If this trend continues, retirees are looking at a smaller COLA next year than this year. But if inflation reverts higher, the COLA would reverse course, too, which would put more money in the pockets of retirees claiming Social Security. Of course, the COLA can be a bit of a double-edged sword because a higher COLA also likely means a higher cost of living and vice versa. While many experts are projecting higher inflation from tariffs, there's no guarantee that actually comes to fruition. Remember, inflation data has continued to come in soft and it's possible that higher consumer prices get offset by slower growth. For this reason, retirees should not bank on a higher COLA yet and continue to budget for about a 2% COLA in 2026 based on recent CPI-W data. That way if the COLA does come in better than expected, retirees will have a little surplus for their budgets next year. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Will President Trump's Tariffs Inadvertently Boost the 2026 Social Security COLA? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-06-2025
- Business
- Yahoo
3 Top-Ranked Lord Abbett Mutual Funds to Buy for a Steady Portfolio
Founded in 1929, Lord Abbett managed assets worth more than $222 billion as of March 31, 2025. This privately held company has around 184 investment professionals with an average of 18 years of industry experience. Lord Abbett deals in about 59 mutual funds, investing in domestic and global stocks, and fixed-income, tax-free income and multi-asset securities. This renowned global asset manager aims to provide a wide variety of financial products and services to fulfill the needs of its investors. The company seeks successful investment performance on behalf of its clients over the long run. The three key factors that have added to Lord Abbett's success are its independent perspective, smart product design and dedication to active management. Below, we share with you three Lord Abbett mutual funds, viz.,Lord Abbett Global Equity Fund LGCAX, Lord Abbett Inflation Focused Fund LIFOX and Lord Abbett Income Fund LAUVX. Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of Lord Abbett mutual funds. Lord Abbett Global Equity Fund invests most of its assets, along with borrowings, if any, in equity securities of foreign and domestic companies. LGCAX advisors choose to invest in a diversified portfolio of equity securities of global issuers irrespective of their market capitalizations. Lord Abbett Global Equity Fund has three-year annualized returns of 14.3%. By the end of January 2025, LGCAX invested 5.2% of its assets in Alphabet. Lord Abbett Inflation Focused Fund seeks a positive return higher than the Consumer Price Index for All Urban Consumers, which measures the rate of inflation in the U.S. economy by investing in a portfolio of fixed-income securities, which consist of inflation-linked derivatives and inflation-indexed fixed-income securities. LIFOX advisors also buy or sell Treasury futures or interest rate swaps to actively manage its portfolio duration. Lord Abbett Inflation Focused Fund has three-year annualized returns of 3.2%. LIFOX has an expense ratio of 0.49%. Lord Abbett Income Fund invests most of its net assets in investment-grade debt (or fixed income) securities, including corporate debt securities of domestic and foreign (including emerging market) issuers that are denominated in U.S. dollars. LAUVX advisors also invest in mortgage-related and other asset-backed securities issued or guaranteed by the U.S. government, its agencies or instrumentalities and inflation-linked investments. Lord Abbett Income Fund has three-year annualized returns of 3%. Robert A. Lee has been one of the fund managers of LAUVX since September 1997. To view the Zacks Rank and the past performance of all Lord Abbett mutual funds, investors can click here to see the complete list of Lord Abbett mutual funds. Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> View All Zacks #1 Ranked Mutual Funds Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (LAUVX): Fund Analysis Report Get Your Free (LIFOX): Fund Analysis Report Get Your Free (LGCAX): Fund Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
19-05-2025
- Business
- Yahoo
Trash collection fees to increase residential utility bills starting July 1
May 19—Utility bills in Newton will see an increase on July 1. The Newton City Council this past month approved a new fee schedule for solid waste and recycling collection following a new contract with Dodd's Trash Hauling and Recycling. The increase amounts to $3.39 per month for each household in town. Earlier this year, the city distributed requests for proposals to waste management companies, seeking bids for collections services consistent with the existing contract. Three businesses reached out to the city, including local provider Dodd's Trash Hauling and Recycling, which was the clear favorite. Back then it was noted a new contract would result in higher rates for residents no matter which waste management company was chosen. Currently, residents pay $15.16 per month for waste collection services. The new contract would increase that monthly rate for residential units to $18.55 per month. Included in the new five-year contract with Dodd's is an annual rate adjustment tied to the Consumer Price Index for All Urban Consumers (CPI-U). The rate covers solid waste and recycling, landfill tipping fees, recycling tipping fees, leaf bag collection and Christmas tree collection.
Yahoo
09-05-2025
- Business
- Yahoo
The ‘I'll Buy It If' Money Challenge Can Save You From Inflated Prices
Keeping your finances in check can be difficult, especially with persistent inflation and rising costs. Finding tips and tricks to limit your spending and help you become a smarter shopper can be just as fun as it is useful. Read Next: Check Out: Recently, a new TikTok trend has had buyers playing a fun game that also benefits them financially. When most people go shopping, they probably riffle through several steps before buying something without even realizing it. First, they see something they like. Then, they move in to check it out and check the price. Then, they weigh the pros and cons of paying that amount. It's a normal process, but according to some TikTokers, there may be a better way. The 'I'll Buy It If' trend has TikTok users setting spending limits before considering buying an item. For example, a shopper might see a vase on the shelf and decide that it's worth $20 to them. Then, they look at that item more closely and reveal how much it actually costs. If the vase is under $20, they can buy it. Explore More: Trends like 'I'll Buy It If' make it cool for young shoppers to think about their spending habits, which translates to better financial practices. When you start assigning a monetary value to items before the actual costs influence you, you'll have a better idea of how much you want something. Taking the time to assess the item's value will cut down on your emotional spending and buyer's remorse. This practice also helps shoppers deal with higher prices caused by inflation. The Consumer Price Index for All Urban Consumers measures how inflation changes prices across the U.S. From March 2024 to March 2025, for instance, prices increased by 2.4%. But the TikTok challenge can help anchor the way you personally value goods, even if prices jump. If you see a pair of sandals that would be great for the summer, you'll be less likely to buy them at a high price if you take the time to think about what they're worth to you beforehand. The 'I'll Buy It If' trend can encourage mindful spending and help you save more than you otherwise would, but there are some pitfalls to avoid. If you continually overvalue items, you might buy everything you see. At the end of 2024, credit card debt was up 4% compared to a year earlier. Just because you assign a number to an item before you check it out shouldn't mean it's then acceptable to rack up debt for that purchase. TikTok trends can be a fun way to interact with a community and show off how you shop, but this can also cause you to buy unnecessary items. By adding a camera to the equation, you might be more likely to make a purchase just to get a slew of likes, follows and comments. It's best to keep the big picture in mind and remember that you're trying to limit your spending to improve your financial future. More From GOBankingRates 5 Luxury Cars That Will Have Massive Price Drops in Spring 2025 4 Things You Should Do if You Want To Retire Early How Far $750K Plus Social Security Goes in Retirement in Every US Region 12 SUVs With the Most Reliable Engines This article originally appeared on The 'I'll Buy It If' Money Challenge Can Save You From Inflated Prices Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
