Social Security recipients could receive a large COLA adjustment, forecasters say. Here's how they can earn 4% on their money now.
Summary
Social Security recipients may get a cost-of-living adjustment (COLA) near 4% next year due to recent high inflation, increasing their monthly benefits by about $80. Meanwhile, they can earn around 4% interest today using high-yield savings accounts or certificates of deposit (CDs), which offer better returns than traditional savings accounts.Key Facts
- Inflation recently surged to its highest in about three years, prompting a potential 3.9% COLA for Social Security in 2027.
- A 3.9% COLA would raise the average Social Security monthly payment to roughly $2,150, adding about $80 per month.
- The official COLA announcement for 2027 will be made in October 2026.
- High-yield savings accounts currently offer about 4% interest, much higher than the 0.38% average on regular savings accounts.
- Interest rates on these high-yield accounts are variable but are unlikely to fall soon due to no Federal Reserve rate cuts expected in 2026.
- Certificates of deposit (CDs) provide a fixed interest rate around 4%, but funds are locked until the CD matures, with penalties for early withdrawal.
- Gold investments are suggested as a way to protect savings because gold typically holds value during economic uncertainty and inflation.
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