Connect with us

Finance

Seniors to get moderate cost of living bump in Social Security payments next year

Published

on

DO NOT USE ON FNC/FBN DIGITAL EDITORIAL. ONLY FOR CREDIBLE CONTENT

Moderating inflation means a smaller increase in Social Security payments.  (iStock)

Social Security and Supplemental Security Income (SSI) benefits for more than 71 million Americans will increase by 2.5% in 2025, resulting in an additional $561 in Social Security income over the course of the year, according to the Social Security Administration (SSA).

Beneficiaries will see an extra $50 monthly starting in January, according to a recent SSA statement. Increased payments to approximately 7.5 million SSI recipients will begin on Dec. 31, 2024. Over the last decade, the cost of living adjustment (COLA) has increased by about 2.6%. The COLA was 3.2% in 2024. The Social Security COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The increase in 2024 will help millions of people keep up with expenses, even as inflation has moderated closer to the 2% target level set by the Federal Reserve, according to Martin O’Malley, Commissioner of Social Security. Still, the adjustment is lower than in previous years because of moderating inflation. Recipients received increases of 3.2% in 2024 and 8.7% in 2023, the most significant bump in payments since the early 1980s because of record-high inflation.

“Inflation took a financial toll this past year, particularly on retirees, who often rely on Social Security as a key source of income,” AARP Chief Executive Officer Jo Ann Jenkins said in a statement. “Even with this adjustment, we know many older Americans who rely on Social Security may find it hard to pay their bills. Social Security is the primary source of income for 40% of older Americans.” 

However, Jenkins said that more needs to be done to strengthen Social Security and secure a long-term solution that Americans can rely on.

If high-interest debt is affecting your retirement savings, consider paying it off with a personal loan at a lower interest rate. Visit Credible to speak with an expert and get your questions answered.

AVERAGE CREDIT CARD DEBT IN THE U.S. IN 2024

Group calls for Senior CPI   

Many Americans are deeply concerned about the impact of inflation on their retirement savings and their ability to make ends meet with Social Security retirement income.  Social Security recipients have lost about 20% of their buying power since 2010, according to annual research by The Senior Citizens League (TSCL).

TSCL and seniors want Congress to start calculating COLA based on the Consumer Price Index for Americans 62 and older (CPI-E) instead of the CPI-W. CPI-E is generally higher than the CPI-W because it surveys the costs of retired households over 62 and more accurately accounts for how older Americans spend money. Older and disabled Social Security recipients spend a significant share of their incomes on housing and medical costs — two spending categories that tend to rise more quickly than overall inflation. The TSCL has also called on Congress to institute a minimum COLA of 3%.

“This year represents another lost opportunity to grant seniors the financial relief they deserve by changing the COLA calculation from the CPI-W to the CPI-E, which would better reflect seniors’ changing expenses,” TSCL Executive Director Shannon Benton said in a statement. “Seniors—and TSCL—demand that Congress takes immediate action to strengthen COLAs to ensure Americans can retire with dignity. Our research shows that 67% of seniors depend on Social Security for more than half their income and that 62% worry their retirement income won’t even cover essentials like groceries and medical bills.”

If you’re looking to reduce your monthly expenses, you could consider paying off high-interest debt with a personal loan at a lower interest rate. Visit Credible to speak with a personal loan expert and see if this option is right for you.

BEST PERSONAL LOANS OF OCTOBER 2024

Tax threshold increases

Another adjustment that will take effect in January is the portion of personal income subject to Social Security tax. That is expected to increase to $176,100 in 2025, up from $168,600 in 2024. This means recipients who earn over $178,100 in 2025 will have to pay the Social Security payroll tax on the amount of their income that exceeds that limit.

Unlike other parts of the federal income tax code, the income thresholds that subject Social Security benefits to taxation have never been adjusted for inflation. Consequently, as Social Security income increases due to COLAs, more retirees can reach the thresholds that trigger the tax on their Social Security benefits.

If you are retired or are preparing to retire, paying down debt with a personal loan can help you reduce your interest rate and monthly expenses. You can visit Credible to compare multiple personal loan lenders in one place and choose the one with the best interest rate for you.

HOW TO PAY OFF DEBT FAST: 5 STRATEGIES

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Continue Reading

Finance

These are 3 big things we’re watching in the stock market this week

Published

on

A security guard works outside the New York Stock Exchange (NYSE) before the Federal Reserve announcement in New York City, U.S., September 18, 2024. 

Andrew Kelly | Reuters

The stock market bounce last week showed once again just how dependent Wall Street has become on the whims of the White House.

Continue Reading

Finance

These U.S. consumer stocks face higher China risks

Published

on

Continue Reading

Finance

Apple iPhone assembly in India won’t cushion China tariffs: Moffett

Published

on

Street's biggest Apple bear says a production move to India is unrealistic

Leading analyst Craig Moffett suggests any plans to move U.S. iPhone assembly to India is unrealistic.

Moffett, ranked as a top analyst multiple times by Institutional Investor, sent a memo to clients on Friday after the Financial Times reported Apple was aiming to shift production toward India from China by the end of next year.

He’s questioning how a move could bring down costs tied to tariffs because the iPhone components would still be made in China.

“You have a tremendous menu of problems created by tariffs, and moving to India doesn’t solve all the problems. Now granted, it helps to some degree,” the MoffettNathanson partner and senior managing director told CNBC’s “Fast Money” on Friday. “I would question how that’s going to work.”

Moffett contends it’s not so easy to diversify to India — telling clients Apple’s supply chain would still be anchored in China and would likely face resistance.

“The bottom line is a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might (and we emphasize might) help with the former. The latter may ultimately be the bigger issue,” he wrote to clients.

Moffett cut his Apple price target on Monday to $141 from $184 a share. It implies a 33% drop from Friday’s close. The price target is also the Street low, according to FactSet.

“I don’t think of myself as the biggest Apple bear,” he said. “I think quite highly of Apple. My concern about Apple has been the valuation more than the company.”

Moffett has had a “sell” rating on Apple since Jan. 7. Since then, the company’s shares are down about 14%.

“None of this is because Apple is a bad company. They still have a great balance sheet [and] a great consumer franchise,” he said. “It’s just the reality of there are no good answers when you are a product company, and your products are going to be significantly tariffed, and you’re heading into a market that is likely to have at least some deceleration in consumer demand because of the macro economy.”

Moffett notes Apple also isn’t getting help from its carriers to cushion the blow of tariffs.

“You also have the demand destruction that’s created by potentially higher prices. Remember, you had AT&T, Verizon and T. Mobile all this week come out and say we’re not going to underwrite the additional cost of tariff [on] handsets,” he added. “The consumer is going to have to pay for that. So, you’re going to have some demand destruction that’s going to show up in even longer holding periods and slower upgrade rates — all of which probably trims estimates next year’s consensus.”

According to Moffett, the backlash against Apple in China over U.S. tariffs will also hurt iPhone sales.

“It’s a very real problem,” Moffett said. “Volumes are really going to the Huaweis and the Vivos and the local competitors in China rather than to Apple.”

Apple stock is coming off a winning week — up more than 6%. It comes ahead of the iPhone maker’s quarterly earnings report due next Thursday after the market close.

To get more personalized investment strategies, join us for our next “Fast Money” Live event on Thursday, June 5, at the Nasdaq in Times Square.

Continue Reading

Trending