Finance

Your Social Security COLA increase could be bigger than expected next year

Published

1 year ago

April 16, 2024

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Social Security recipients are on track to receive a cost-of-living adjustment (COLA) next year that is bigger than previously expected after inflation accelerated for the third month in a row.

The Senior Citizens League, a nonpartisan group that focuses on issues relating to older Americans, estimated the adjustment could be about 3%, based on March inflation data, which showed the consumer price index climbed 0.4% from the previous month and is up 3.5% from the same time last year.

Both figures are higher than expected, underscoring the challenge of taming high inflation.

The annual Social Security change is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or the CPI-W, from July, August and September. The CPI-W also posted a 3.5% increase in March.

JAMIE DIMON WARNS INFLATION, INTEREST RATES MAY REMAIN ELEVATED

Should Social Security beneficiaries see a 3% increase in their monthly checks next year, it would mark a steep decline from both 2023, when recipients saw an 8.7% bump and from 2024, when benefits rose by 3.2%.

In this photo illustration, a Social Security card sits alongside checks from the U.S. Treasury on Oct. 14, 2021, in Washington, D.C. (Kevin Dietsch/Getty Images / Getty Images)

However, it remains higher than the 2.6% average increase recorded over the past two decades.

An increase of that magnitude would raise the average retiree benefit of $1,907 by about $57.21 per month.

Even with last year’s cost-of-living increase, many retirees say they are struggling to keep up with high inflation, according to Mary Johnson, a research analyst at the Senior Citizens League who conducted the analysis.

This year’s 3.2% benefit increase exceeded the actual rate of inflation in March and matched it in February.

WHY ARE GROCERIES STILL SO EXPENSIVE?

“That means older consumers are losing buying power,” Johnson said.

The Social Security Administration will release the final adjustment percentage in mid-October.

Shoppers are seen in a Kroger supermarket on Oct. 14, 2022, in Atlanta, Georgia. ((Photo by Elijah Nouvelage / AFP) (Photo by ELIJAH NOUVELAGE/AFP via Getty Images) / Getty Images)

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Inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.

The typical U.S. household needed to pay $227 more a month in March to purchase the same goods and services it did one year ago because of still-high inflation, according to calculations from Moody’s Analytics chief economist Mark Zandi shared with FOX Business.

Americans are paying on average $784 more each month compared with the same time two years ago and $1,069 more compared with three years ago, before the inflation crisis began.

The analysis suggests that while inflation has fallen from the highs of mid-2022, many families have yet to see material relief.

Finance

Warren Buffett tells WSJ he stepped aside as CEO after finally feeling old

Published

2 hours ago

May 14, 2025

Business Finance News

Warren Buffett does a walkthrough of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2025.

David A. Grogen | CNBC

Age isn’t just a number for Warren Buffett after all.

The 94-year-old investment legend recently surprised shareholders by announcing his intention to step down as Berkshire Hathaway CEO after an epic 60-year run. The reason behind the decision was the physical effects of aging he’s been experiencing, Buffett said in a new interview with the Wall Street Journal.

“I didn’t really start getting old, for some strange reason, until I was about 90,” he told the Journal in a phone interview. “But when you start getting old, it does become—it’s irreversible.”

The Oracle of Omaha, who turns 95 in August, revealed to the paper that he started to lose his balance occasionally, while experiencing issues remembering someone’s name sometimes. His vision also turned less clear when reading newspapers.

It marked an end of an era at Berkshire, which was a failing New England textile mill six decades ago and was transformed into a one-of-a-kind conglomerate with businesses ranging from Geico insurance to BNSF Railway. Buffett is handing over his reins on a high note as Berkshire shares are near a record high, giving the conglomerate a market cap of nearly $1.2 trillion.

Berkshire’s board voted unanimously to make Greg Abel, now vice chairman of noninsurance operations, president and CEO on Jan. 1, 2026, and for Buffett to remain as chairman.

Still, Buffett said he remains mentally sharp to make investment decisions when opportunities arise. The value investing icon is known to take advantage of market turmoil and depressed prices to make big purchases.

“I don’t have any trouble making decisions about something that I was making decisions on 20 years ago or 40 years ago or 60 years,” he told the Journal. “I will be useful here if there’s a panic in the market because I don’t get fearful when things go down in price or everybody else gets scared….And that really isn’t a function of age.”

— Click here to read the original WSJ story.

Finance

New York AG James sues Capital One after Trump’s CFPB drops claims

Published

3 hours ago

May 14, 2025

Business Finance News

The logo for consumer lending firm Capital One Financial Corp is seen on its headquarters on January 20, 2023 in McLean, Virginia. The company has reportedly eliminated up to 1,100 technology positions this week as its digital structure matures.

Win Mcnamee | Getty Images News | Getty Images

New York Attorney General Letitia James sued Capital One on Wednesday, accusing the bank of “cheating” customers out of millions of dollars in interest payments – just months after the Trump administration’s Consumer Financial Protection Bureau dropped a similar suit against the financial institution.

In a complaint filed in Manhattan federal court, James alleged that Capital One marketed its “360 Savings” account as its high-yield savings account, then left those customers in the dark by failing to inform them about its new “360 Performance Savings” product that offered substantially higher interest rates.

As interest rates rose starting in 2022, the state attorney general’s office said, Capital One froze the interest rate of its 360 Savings product at 0.3%, while increasing the rate of the 360 Performance Savings accounts to as high as 4.35%, meaning New York 360 Savings customers lost out on “millions of dollars of interest.”

The suit further alleges that Capital One instructed its employees not to tell 360 Savings customers about the new product “unless they explicitly asked.”

The complaint mimics litigation by the CFPB, which was dropped in February under Trump-era CFPB Acting Director Russell Vought. That suit alleged Capital One’s marketing led U.S. customers to miss out on more than $2 billion in interest.

The dropped CFPB case is among a slew of other enforcement lawsuits that the agency pursued under previous CFPB director, Rohit Chopra, and that have been dismissed by President Donald Trump’s administration.

“Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice,” James said in a statement Wednesday. “Big banks are not allowed to cheat their customers with false advertising and misleading promises.”

Capital One did not immediately respond to CNBC’s request for comment Wednesday. The bank disputed the CFPB allegations earlier this year and told CNBC that it transparently marketed its 360 Performance Savings account.

The New York suit accuses Capital One of violating state and federal law and seeks “restitution and damages for all affected Capital One customers.”