Latest news with #SocialSecurityCOLA
Yahoo
4 days ago
- Business
- Yahoo
Social Security COLA 2026: Will Tariffs Impact It?
The cost-of-living adjustment (COLA) for 2026 is projected to be the lowest in five years at 2.4%, according to NBC New York. That would be one-tenth of a percent lower than 2025's COLA, 2.5%, potentially lowering Social Security increases for seniors, survivors and disabled beneficiaries. Be Aware: Try This: In April 2025, inflation decreased to 2.3%. But what does this mean for retirees living on a fixed income? Before you panic, know the rate isn't set in stone. If tariffs increase inflation in the next six months, the COLA for 2026 could change. Another factor is prescription drug costs, NBC New York reported. Here's a closer look at these impacting factors. Inflation dropped to a 12-month low of 2.3% in April, the slowest pace seen since 2021, based on the consumer price index. However, that downward trend could reverse if new tariffs on imported goods lead to inflationary pressure. Tariffs often lead to higher costs for businesses, which tend to pass these expenses on to consumers, which could drive prices — and inflation — back up in the coming months. If inflation starts to rise again, it could influence the projected 2026 COLA for Social Security beneficiaries. COLA estimates are updated monthly, as new inflation data is released. Read Next: Another factor that could contribute to inflation is the rising costs of prescription drugs. But that may be changing. On May 12, 2025, President Donald Trump issued an executive order to lower prescription drug costs. The order stated that pharmaceutical companies 'deeply discount' drug prices to foreign markets and aims to make other countries to pay their fair share. Still, even if drug prices drop, it's unclear how much that would affect COLA and retirees' expenses in general at this time. It should become clearer how inflation and drug prices unfold in the upcoming months. Although experts can speculate, they won't know for certain until Social Security announces the official 2026 COLA report in October 2025. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on Social Security COLA 2026: Will Tariffs Impact It?
Yahoo
16-05-2025
- Yahoo
Louisiana OMV investigates Baton Rouge driving school
BATON ROUGE, La. (Louisiana First) — The Louisiana Office of Motor Vehicles (OMV) confirmed Friday that it is investigating a Baton Rouge driving school. Trinity Driving School on Jones Creek Road closed its doors amid the investigation. A pop-up on their website reads: 'Sorry, we are temporarily closed due to technical difficulties!' A spokesperson for the OMV said students and parents are encouraged to reach out to the agency by emailing ladrivingschools@ or calling 225-925-1795. 'We will be collecting information and will notify the parents/students with further instructions once we have more information,' a spokesperson said. No further details were provided. An investigation is ongoing. Baton Rouge anti-violence programs at risk of federal funding cuts Here's how to download the Louisiana First News mobile app Social Security COLA increase in 2026 projected to be lowest in years, advocacy group says Louisiana OMV investigates Baton Rouge driving school Bad blood: Trump takes new swipe at Taylor Swift Voting rights groups sue over proof of citizenship law in Louisiana Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
14-05-2025
- Business
- Yahoo
Inflation Is Cooling Off. Does This Mean a Lower Social Security COLA in 2026?
Inflation data for April came in lower than experts had projected. The latest estimate calls for a 2.3% COLA in 2026. There's a chance that cooler-than-expected inflation could lower the COLA even more. The $22,924 Social Security bonus most retirees completely overlook › If you haven't seen the latest inflation data, the general idea is that prices are rising more slowly than expected. We recently got a look at consumer price index (CPI) data for April, and the year-over-year inflation rate was 2.3%. Not only is this the lowest inflation figure since early 2021, but it was one-tenth of a percentage point lower than economists had expected. The core CPI, which excludes food and energy prices, matched annual estimates with a 2.8% increase, but the monthly rise was lower than expected. This is a little lower than the latest projection for the 2026 Social Security cost-of-living adjustment, or COLA, from the Senior Citizens League (not a government organization). Its latest estimate calls for a 2.4% COLA next year, which is slightly less than the 2.5% seniors received in 2025. But if inflation has been declining so far in 2025, couldn't the trend continue? With the Social Security COLA based solely on third-quarter inflation data, a continued decline in inflation could certainly have COLA implications. However, just because inflation was cooler than expected in April doesn't mean the trend will continue. Here's why many experts don't expect the low inflation to last, and what it could potentially mean for the 2026 COLA. As mentioned, the Social Security COLA uses third-quarter inflation data each year to determine the effect of inflation. The Social Security Administration looks at CPI data (specifically the CPI-W) from July, August, and September, and compares it with the same period from the prior year. The increase in the CPI-W is rounded to the nearest tenth of a percent, and that becomes the COLA. One important point to keep in mind is that April's consumer price index data included some of the effects of President Donald Trump's tariffs, but not much. There were a few notable effects, such as a rather large 9% jump in the prices of audio equipment. Several prominent economists believe that we haven't yet seen the majority of the effect from the tariffs in the inflation data. In a CNBC interview, Moody's chief economist Mark Zandi said he expects to see a noticeable effect from tariffs in the May inflation data that we should get midway through June. Another economist from the Peterson Institute for International Economics estimates that a 10% average tariff rate could add as much as 1% to the CPI "after about six to nine months." Wells Fargo senior economist Sarah House said: "I think tariffs are the biggest question mark over the inflation outlook." Because it's based on third-quarter inflation, it's impossible to predict the 2026 COLA with any degree of accuracy. Because of the ongoing tariff back-and-forth, as well as a generally slowing U.S. economy, the inflation rate on the back end of the year is more uncertain than it usually is. Essentially, the 2026 COLA is going to depend on just how much of an effect we actually end up seeing from tariffs. There are two key questions: What will the tariffs be when the dust settles, and how much inflationary pressure will the implemented tariffs put on inflation? If the trade war intensifies sharply and tariffs end up higher than expected, it could result in a spike in inflation and make the COLA significantly higher than the latest projection indicates. On the other hand, if tariffs end up essentially being quickly negotiated away and/or become a non-event for inflation data, it's entirely possible that inflation could continue to fall during the rest of 2025. The most likely outcome is somewhere in the middle of those two extremes -- but where in the middle is anyone's guess at this point. 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 $22,924 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. Inflation Is Cooling Off. Does This Mean a Lower Social Security COLA in 2026? was originally published by The Motley Fool Sign in to access your portfolio
Business Mayor
14-05-2025
- Business
- Business Mayor
Social Security cost-of-living adjustment for 2026 is projected to be lowest in recent years. Why that may change
Customers shop for produce at an H-E-B grocery store on Feb. 12, 2025 in Austin, Texas. Brandon Bell | Getty Images The Social Security cost-of-living adjustment for 2026 is on pace to be the lowest annual benefit increase in five years, according to new estimates. But that may change depending on the pace of inflation in the coming months. The COLA may be 2.4% in 2026, according to new projections from both Mary Johnson, an independent Social Security and Medicare policy analyst, and The Senior Citizens League, a nonpartisan senior group. If that increase goes into effect next year, it would be lower than the 2.5% boost to benefits Social Security beneficiaries saw in 2025. It would also be the lowest cost-of-living adjustment since 2021, when a 1.3% increase went into effect. More from Personal Finance: Here's the inflation breakdown for April 2025 — in one chart Ways to save on groceries amid food price inflation How to land a new job in a 'low firing, low hiring' market The Social Security COLA provides an annual inflation adjustment to all of the program's beneficiaries, including retirees, disabled individuals and family members. The annual adjustment for the next year is calculated by comparing third-quarter inflation data for the current year to the previous year. The year-over-year difference determines the annual increase. However, if there is no rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, from year to year, the COLA may be zero. The CPI-W, used to calculate Social Security's COLA, increased by 2.1% over the past 12 months, according to data released Tuesday by the Bureau of Labor Statistics. In the months ahead, two factors may affect retirees' cost of living, experts say. Tariffs may push inflation higher Inflation, as measured by the broader consumer price index, sank to its lowest 12-month rate at 2.3% in April since 2021. Yet tariffs may push the inflation rate higher in the months ahead, if those taxes imposed on imported goods go into effect. Tariffs would prompt higher consumer prices and inflation. If that happens in the months ahead, the Social Security cost-of-living adjustment estimate for 2026 may move higher. 'This year will be a closer year to watch because of the tariffs,' Johnson said of the 2026 COLA estimate, which is recalculated every month with new inflation data. The official COLA for the following year is typically announced by the Social Security Administration in October. Prescription drug costs President Donald Trump on Monday issued an executive order taking aim at high prescription drug costs in the U.S. The White House hopes to bring those prices in line with other countries. The policy would apply to Medicare and Medicaid, in addition to the commercial market, according to the White House. Changing drug prices would be unlikely to impact the COLA estimate, according to Johnson. But retirees would see an impact to their personal budgets if drug prices came down, she said. Many details of the executive order still need to be fleshed out, noted Leigh Purvis, prescription drug policy principal at the AARP Public Policy Institute. Yet the nonprofit organization, which represents Americans ages 50 and up, praised the Trump administration's efforts to curb big drug companies' ability to charge retirees high prices for necessary prescriptions. 'A lot of people are aware that prescription drug prices are too high, and I think a lot of people are aware that we're paying a lot more than other countries,' Purvis said. 'So any efforts moving us in the direction of paying less and paying something that's more comparable to the rest of the world, I think is something that people could probably get behind,' she said. READ SOURCE
CNBC
13-05-2025
- Business
- CNBC
Social Security cost-of-living adjustment for 2026 is projected to be lowest in recent years. Why that may change
The Social Security cost-of-living adjustment for 2026 is on pace to be the lowest annual benefit increase in five years, according to new estimates. But that may change depending on the pace of inflation in the coming months. The 2026 COLA may be 2.4% in 2026, according to new projections from both Mary Johnson, an independent Social Security and Medicare policy analyst, and The Senior Citizens League, a non-partisan senior group. If that increase goes into effect next year, it would be lower than the 2.5% boost to benefits Social Security beneficiaries saw in 2025. It would also be the lowest cost-of-living adjustment since 2021, when a 1.3% increase went into effect. More from Personal Finance:Here's the inflation breakdown for April 2025 — in one chartWays to save on groceries amid food price inflation How to land a new job in a 'low firing, low hiring' market The Social Security COLA provides an annual inflation adjustment to all of the program's beneficiaries, including retirees, disabled individuals and family members. The annual adjustment for the next year is calculated by comparing third quarter inflation data for the current year to the previous year. The year-over-year difference determines the annual increase. However, if there is no increase in the the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, from year to year, the COLA may be zero. The CPI-W, used to calculate Social Security's COLA, increased by 2.1% over the past 12 months, according to data released Tuesday by the Bureau of Labor Statistics. In the months ahead, two factors may affect retirees' cost of living, experts say. Inflation, as measured by the broader Consumer Price Index, sank to its lowest 12-month rate at 2.3% in April since 2021. Yet tariffs may push the inflation rate higher in the months ahead, if those taxes imposed on imported goods go into effect. Tariffs would prompt higher consumer prices and inflation. If that happens in the months ahead, the Social Security cost-of-living adjustment estimate for 2026 may move higher. "This year will be a closer year to watch because of the tariffs," Johnson said of the 2026 COLA estimate, which is recalculated every month with new inflation data. The official COLA for the following year is typically announced by the Social Security Administration in October. President Donald Trump on May 12 issued an executive order taking aim at high prescription drug costs in the U.S. The White House hopes to bring those prices in line with other countries. The policy would apply to Medicare and Medicaid, in addition to the commercial market, according to the White House. Changing drug prices would be unlikely to impact the COLA estimate, according to Johnson. But retirees would see an impact to the personal budgets if drug prices came down, she said. Many details of the executive order still need to be fleshed out, noted Leigh Purvis, prescription drug policy principal at AARP Public Policy Institute. Yet the nonprofit organization, which represents Americans ages 50 and up, praised the Trump administration's efforts to curb big drug companies' ability to charge retirees high prices for necessary prescriptions. "A lot of people are aware that prescription drug prices are too high, and I think a lot of people are aware that we're paying a lot more than other countries," Purvis said. "So any efforts moving us in the direction of paying less and paying something that's more comparable to the rest of the world, I think is something that people could probably get behind," she said.
