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    These annuities act like ‘bumpers in a bowling lane’ to limit losses, advisor says: What to know before you buy one

    Sales of registered index-linked annuities jumped to $20.6 billion in the third quarter, up 20% from a year earlier, according to research.
    These annuities provide retirement savers with some protection against losses while still providing exposure to the stock market.
    There are variations in the specifics of RILAs, but the general idea is that their performance is tied to an index or indexes.

    Fg Trade | E+ | Getty Images

    Investors who want to benefit from stock market gains but limit the impact of its losses are increasingly turning to registered index-linked annuities.
    Like other annuities, RILAs are insurance contracts that involve handing over money in exchange for a payout, often at a later date. As the name suggests, a RILA’s performance is based on a stock market index (or multiple indexes). They come with limits on both the loss and growth sides.

    “It’s like putting bumpers in a bowling lane — you’re limited on both sides,” said certified financial planner Jessica McNamee, founder and wealth management advisor for Sirius Wealth Strategies in Bellefontaine, Ohio.
    Sales of RILAs reached an estimated $20.6 billion in the third quarter, a 20% jump from the same period in 2024, according to recent research from LIMRA, an insurance and financial services trade group.
    This year through Sept. 30, sales were 18% higher than the same time last year, at $57.3 billion. LIMRA expects sales to exceed $80 billion in both 2026 and 2027, said Keith Golembiewski, assistant vice president and head of LIMRA annuity research.
    “With a growing number of income solutions and downside protection features … RILAs have become more appealing to a wider range of clients,” Golembiewski said.

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    The growth comes as the stock market has continued its upward climb over the last several years, with the major stock indexes posting double-digit yearly gains. The S&P 500 index, for instance, has climbed more than 85% since mid-October 2022. Some financial advisors are recommending that investors rebalance their portfolios and evaluate their risk tolerance in case there’s a market correction or worse.

    “We are later in a bull run cycle,” McNamee said. “As time goes on, the potential gain from this bull market is diminished and the potential risk of a prolonged market dip is increased. I think clients are thinking, ‘How long can this [bull run] continue?'”
    At the same time, investors who are still accumulating their retirement savings need exposure to the market if they want returns that beat inflation — and a RILA can help with that.
    But they aren’t without risk. Here’s what to know before you buy.

    Caps blunt market gains, too

    Remember that those bumpers don’t just affect losses: “Your losses are limited to some extent and the gains are limited to some extent,” McNamee said.
    While the specifics vary among RILAs, here’s an example: Say a RILA is based on the S&P 500 index and comes with a 15% downside limit and a 15% upside cap. If the S&P drops 8%, you won’t incur the loss. But if it slides by 19%, you’d see a 4% loss (the amount greater than the 15% loss limit).
    On the gain side in that situation, if the market jumps by 20%, you’ll only see a 15% gain.

    Using multiple indexes can help diversify holdings

    You can choose the length of the RILA contract — say, one, three or six years. There are also variations in the specifics of your loss limit and gain caps — both are generally larger the longer the contract — as well as the market index or indexes you choose to base your contract on.
    Using more than one index in your RILA can help diversify your money. For instance, say you allotted 70% to the S&P index and the other 30% to a broad-based international index, McNamee said.
    “If U.S. stocks go down but the rest of the world’s stocks are fine, that [index mix] helps to mitigate potential losses because we’re diversifying,” she said.

    One appealing aspect of RILAs is that they generally come with no fees. There’s no upfront sales charge when you enter the contract, nor are there investment fees — because even though your returns are based on the performance of an index, you don’t own the index, McNamee said. 

    Even with downside protection, review risk tolerance

    These annuities are not without risk. 
    For instance, McNamee said, a RILA that covers up to 25% on the downside may seem generous, but history shows it can be worse: In the Great Recession, from late 2007 to early 2009, the S&P lost more than 50%.
    “I remind clients that we could experience that again,” McNamee said. “It is possible for the index to fall more than that and you could lose money.”
    In other words, it’s important to consider your risk profile before buying a RILA, she said.
    “The client needs to analyze whether or not the allocation to an index is appropriate for their risk tolerance, even with the downside protection,” McNamee said.

    Accessing money early can be expensive

    Additionally, it’s important to remember that you are generally locking up your money for the duration of the RILA. If you withdraw money from the annuity before the contract ends, you may pay what’s called a surrender charge.
    Some RILAs let you withdraw up to a certain amount yearly (say 10%) but will apply that surrender charge to any withdrawals beyond that limit, McNamee said. Those charges generally start out higher at the beginning of the contract (say, 8% of whatever you take out) and gradually get lower over the course of the RILA.

    Beyond that lack of liquidity, it’s important to remember that RILAs, like other annuities, are subject to the same age-related withdrawal limitations as other retirement savings.
    “The biggest mistake I see people make with annuities is they don’t realize that even if it’s funded with non-IRA money, it is still a retirement account,” McNamee said. 
    So if you take money out before age 59½, you may be subject to a 10% early withdrawal tax penalty from the Internal Revenue Service. More

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    Student loan forgiveness notices are going out despite the shutdown — what borrowers need to do next

    Even during the government shutdown, borrowers are getting notices of student loan forgiveness.
    The Trump administration agreed last month to resume forgiving people’s education debts under programs that it had partially paused, including the Income Contingent Repayment plan, or ICR, and the Pay as You Earn plan, or PAYE.
    Financial experts recommend taking a number of steps, including assessing potential tax liabilities, monitoring your credit and revisiting your major goals.

    Tim Robberts | Digitalvision | Getty Images

    Student loan forgiveness is a major relief for borrowers — many of whom have been in repayment for decades. But after receiving debt cancellation, there are key steps you should take, experts say.
    The Trump administration agreed last month to resume forgiving people’s education debts under programs that it had partially paused, including the Income Contingent Repayment plan, or ICR, and the Pay as You Earn plan, or PAYE. The concessions resulted from a lawsuit by the American Federation of Teachers against the U.S. Department of Education, which accused the government of blocking borrowers from opportunities mandated in their loan terms.

    Even during the government shutdown, some student loan borrowers have started receiving messages that the Education Department has forgiven their debt.
    More than 40 million Americans hold student loans, and the outstanding debt exceeds $1.6 trillion. 
    “A financial windfall is a great time to evaluate progress towards life goals,” said Dana Levit, a certified financial planner and the owner of Paragon Financial Advisors in the Boston area. “In this case, there is now additional discretionary income that had previously been used for making payments on the student loan debt.”
    Here’s what to do after student loan forgiveness, according to experts.

    Assess any taxes that may be due

    In some cases, getting your student debt erased can trigger tax liabilities. However, the American Rescue Plan Act of 2021 made student loan forgiveness tax-free at the federal level through the end of 2025.

    Recently, Trump officials made clear that borrowers who become eligible for debt erasure in 2025 won’t get a tax bill from the IRS, even if their debt is formally cancelled in the first few weeks or months of next year. Sometimes there can be a lag time between when someone becomes eligible for the relief and when their debt is actually wiped away.
    It’s a good idea to save any dated notification you get about your eligibility for loan cancellation, in case you wrongly receive a tax bill down the line, experts say.

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    If you become eligible for student loan forgiveness in 2026, you’ll get a copy of IRS Form 1099-C showing the amount cleared as income, said higher education expert Mark Kantrowitz.
    Those who anticipate the debt erasure next year can start to salt away money now for the federal tax bill. Borrowers often don’t have to pay the entire tax liability in one sum, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
    “They can request a plan through the IRS to spread the payments over a longer period of time,” Nierman said.
    Meanwhile, if your liabilities exceed your assets or you’re dealing with a serious financial hardship, you may be able to reduce or eliminate the federal tax bill altogether, she said.
    Borrowers who receive student loan forgiveness this year or in the future may also owe taxes to their state, Kantrowitz said. Currently, five states tax the relief in certain cases, he said: Arkansas, Indiana, Mississippi, North Carolina and Wisconsin.

    Keep records, monitor your credit

    Any student loan borrower who gets their debt forgiven should keep records confirming their eligibility for the relief and that their debt balance was reset to zero, Kantrowitz said. You can find information on your account status at Studentaid.gov and with your loan servicer.
    If you don’t know which company is managing your student loans on behalf of the Education Department, or need the company’s contact information, you can also get that information from the government.
    “Keep this proof of forgiveness indefinitely,” Kantrowitz said, in case your loan servicer makes a mistake and restores the debt to your name or it remains on your credit report.

    Your credit history should reflect the student loan forgiveness within a few months, Kantrowitz said.
    “If it doesn’t, they should contact their loan servicer,” he said.

    Check if you’re entitled to a refund

    If you continued to make payments on your student debt after you became eligible for forgiveness, the Education Department may owe you a refund.
    To see if you qualify for one, count the number of qualifying payments you’ve made and compare it to the required number. For example, those pursuing Public Service Loan Forgiveness must make 120 payments before loan cancellation; the number of payments required under income-driven repayment plans can be 240 or 300.
    You should be able to get a list of your qualifying payments at StudentAid.gov, and you can request the refund through the Education Department or your loan servicer. Keep a record of your attempts to get back your overpayments, experts say.
    “The refund will be made by ACH or by check from the U.S. Treasury,” Kantrowitz said.
    Student loan borrowers who get notified that they’re eligible for debt cancellation can also ask to be placed in a forbearance while their relief is processed.

    Revisit financial goals

    With your student debt finally gone, you’ll likely find yourself with a few hundred extra dollars a month, said Levit.
    “Start with using this surplus cash to build an emergency fund if it doesn’t exist yet,” Levit said.
    While financial advisors typically recommend a goal of three to six months’ worth of expenses as an emergency fund, having even $2,000 set aside can make a major difference for many people.
    As you get used to life with less debt, you may also want to review your other financial goals, Levit said.
    “These could include buying a house, saving for college and saving for retirement,” she said. “This is the time to see if any of these goals are underfunded, and if they are, to use this money to catch up on these targets.” More

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    Federal workers face more missed pay, financial challenges as longest government shutdown continues

    The current federal shutdown is now the longest in U.S. history.
    For hundreds of thousands of government employees, the pause has put their paychecks at risk.
    If the shutdown lasts through Dec. 1, about $21 billion in federal wages may be withheld, estimates the Bipartisan Policy Center.

    A visitor jogs past the Washington Monument during sunrise on November 5, 2025 in Washington, D.C. The record for longest shutdown in the U.S. Government was broken Wednesday as it entered its 36th day.
    Tom Brenner | Getty Images News | Getty Images

    The ongoing federal government shutdown is now the longest in U.S. history.
    As the standoff goes on, hundreds of thousands of federal employees who rely on the government for paychecks continue to see their incomes dry up.

    At least 670,000 federal employees have been furloughed and approximately 730,000 individuals are still working without pay, according to the Bipartisan Policy Center.
    If the shutdown lasts through Dec. 1, federal agency workers will collectively miss about 4.5 million paychecks, or $21 billion in total federal wages, BPC estimates. The average federal paycheck is approximately $4,700 in fiscal year 2025, according to the Washington, D.C.-based think tank.
    Military workers’ pay may also be affected by the shutdown, with almost 4.2 million paychecks at stake if the shutdown continues to Dec. 1, according to BPC, assuming money is not reallocated. The Trump administration has said it plans to use legislative and Defense Department funds to pay military members.

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    As the government shutdown continues, the financial burden for federal workers and their families becomes more pronounced.
    “Maybe a family can weather one missed paycheck, but then two missed paychecks and beyond, it certainly gets much harder,” said Caleb Quakenbush, associate director at the Bipartisan Policy Center’s economic policy program.

    Families may face additional challenges with some safety-net programs, , curtailed as a result of the shutdown. Local food banks and other nonprofits, which are the next line of defense, may experience funding gaps with federal grant money on hold, too.
    The federal government shutdown began on Oct. 1 and has dragged on, with Washington lawmakers at an impasse over soon-to-expire enhanced tax credits for Affordable Care Act marketplace insurance premiums. Democrats want to extend the subsidies as part of a deal to end the shutdown, while Republicans have said they want to negotiate the subsidies separately.
    Without a continuing resolution or a full-year appropriations bill, non-essential government services and operations have halted.

    More pay at risk as federal shutdown continues

    Closed signage is seen around the National Gallery of Art Sculpture Garden on the National Mall on October 12, 2025 in Washington, D.C.
    Anna Moneymaker | Getty Images News | Getty Images

    On Wednesday, the shutdown crossed the 36-day mark, making it the longest federal funding lapse in the country’s history.
    The previous 35-day record was set in late 2018 to early 2019 during President Donald Trump’s first term. In January 2019, Trump signed into law the Government Employee Fair Treatment Act to guarantee retroactive pay for both furloughed workers and excepted employees who continued to work during that shutdown and future lapses.
    During a Tuesday press briefing, White House press secretary Karoline Leavitt declined to confirm that furloughed federal employees will receive back pay. “Republicans in the White House are very much open to discussing this with Democrats,” Leavitt said.
    Near the start of the shutdown, a draft White House memo suggested not all furloughed federal workers would be eligible for back pay.
    The White House did not respond to CNBC’s request for further comment by press time.
    Democrats and Republicans have been working on legislation to pay federal employees during the shutdown, though so far, they have not been able to agree on the terms.

    The government is incurring an obligation to pay employees who continue to work without compensation, according to Quakenbush. In the past, Congress has also typically appropriated back pay for furloughed workers, he said. However, contractors who are not directly employed by the government may be vulnerable to income losses if the shutdown prevents them from working.
    Even once this conflict is resolved, it may have lasting effects on the government’s ability to attract talent, according to Quakenbush.
    Many federal workers could be making more in the private sector, but choose to do the work they do because of a sense of mission or purpose, he said.
    “But our ability to attract quality federal workers in the long term, it really matters how we how we treat them,” Quakenbush said.

    Sidelined federal workers should focus on triage

    Affected workers should focus now on “financial triage,” according to Melissa Caro, a certified financial planner and founder of My Retirement Network, a financial education company.
    “Assess the situation the way an ER nurse would,” Caro said.
    The first steps would be to “stop the bleeding” — secure cash flow, call lenders and delay what can be delayed, she said.
    It’s OK to let go of routines like investing in retirement and savings accounts if you’re facing a cash crunch, Caro said. Just be sure to return to those habits when things return to normal, she said.

    Next, take steps to protect essentials like health coverage, housing and access to medication and food, she said.
    “I think people don’t realize how much flexibility there is if you just pick up the phone and make a call,” Caro said, particularly when it comes to housing or utility bills.
    Federal workers facing a pay lapse may also want to consider renegotiating payments on their debts, where possible, said Emmanuel Eliason, a CFP and founder and CEO at Eliason Wealth Management in Centennial, Colorado. But they should be wary of predatory lenders who may seek to take advantage of their need for cash, he said. More

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    Double-digit mutual fund payouts are coming — how to avoid the tax hit

    ETF Strategist

    ETF Street
    ETF Strategist

    After a strong year for the stock market, many mutual funds are expecting double-digit year-end capital gains payouts for 2025, according to Morningstar.
    That could trigger unexpected taxes for investors with mutual funds in taxable brokerage accounts.
    One solution could be swapping those assets for exchange-traded funds, or ETFs, but there are some key things to consider, experts say.

    Violetastoimenova | E+ | Getty Images

    LAS VEGAS — As 2025 winds down, many investors are bracing for year-end mutual fund distributions, which can trigger a hefty tax bill for assets held in a taxable brokerage account. But there are strategies to avoid the payout, experts say.   
    For 2025, “you’ve got some pretty eye-watering numbers,” with some funds planning to distribute double-digit capital gains, said Brandon Clark, director of exchange-traded funds for asset management firm Federated Hermes. 

    After another strong year for the stock market, more than 10 mutual funds are estimating payouts of at least 25%, with most distributions expected to come around late November through year-end, according to a Morningstar report published on Monday.
    If you own these mutual funds in a brokerage account, you could pay taxes on the capital gains payouts, even when you reinvest the proceeds. Those reinvested gains lower your “basis,” or the asset’s original purchase price, which can help reduce future profits.
    Still, “the ETF solves a lot of those [yearly tax] problems,” said Clark, speaking at the Financial Planning Association’s annual conference on Tuesday.

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    ETFs are generally more tax-friendly than mutual funds because of a “tax loophole” that exists for ETFs, Clark said. 
    Fund managers can make “in-kind” trades and redemptions, which are generally tax-free. As a result, most ETFs don’t have year-end capital gains distributions.    

    However, if you’re planning to swap your mutual funds for ETFs, there are some key things to know, experts say. 

    ‘Do a quick comparison’ of possible gains

    One of the challenges of trading mutual funds for ETFs is that many investors are sitting on significant gains, experts say. 
    You should “do a quick comparison” of the possible gain from selling profitable mutual funds vs. the year-end payout, said certified financial planner Karen Van Voorhis, director of financial planning at Daniel J. Galli & Associates in Norwell, Massachusetts.
    If you sold, you would only incur the gains from mutual funds once vs. yearly payouts, she said. The upfront gain could be worthwhile to “permanently flip to ETFs.”

    Know the mutual fund’s ‘record date’

    If you’re planning to sell mutual funds to avoid a year-end payout for 2025, “timing matters,” according to CFP Tom Geoghegan, founder of Beacon Hill Private Wealth in Summit, New Jersey.
    “For mutual funds, you must sell before the record date to avoid receiving the distribution,” he said. If you own the fund on the “record date” or “date of record,” you will still receive the payout, even if you sell after.
    When trading mutual funds for ETFs, you should make sure the new asset “aligns with your investment strategy” without adding unintended risk. More

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    Rising household debt balances point to worsening ‘K-shaped’ economic divide

    Collectively, Americans owe $1.23 trillion on their credit cards, according to a new report from the Federal Reserve Bank of New York.
    However, despite the overall uptick, there is a growing divide among consumers, other reports show.
    Some borrowers are in financial distress, while others are strengthening their financial position, largely by benefiting from stock market rallies and rising home values.

    Americans are falling deeper into debt, but not across the board.
    Collectively, credit card balances rose by $24 billion in the third quarter to $1.23 trillion — up 5.75% from a year earlier to a fresh all-time high, according to a new report on household debt by the Federal Reserve Bank of New York released Wednesday.

    The average credit card balance per consumer now stands at $6,523, up 2.2% year over year, a separate quarterly credit industry insights report from TransUnion also found.
    However, despite the overall uptick, there is a growing divide among consumers, TransUnion found. “Some demonstrate heightened financial resilience while others face mounting challenges,” the report said.

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    Roughly 175 million consumers have credit cards. While some pay off the balance each month, about 60% of credit card users have revolving debt, according to the New York Fed. That means they pay the equivalent of about 20% a year, on average, on the balances they carry from month to month — making their credit cards one of the most expensive ways to borrow money.

    ‘A divergence in consumer credit risk’

    More borrowers are now either superprime, with a credit score of 780 or higher, or subprime, with a credit score below 600, according to Charlie Wise, TransUnion’s senior vice president of global research and consulting.
    That’s creating an increasingly bifurcated consumer economy. “We are seeing a divergence in consumer credit risk, with more individuals moving toward either end of the credit risk spectrum,” Jason Laky, executive vice president and head of financial services at TransUnion, said in a statement.

    Increasingly, consumers now score in the highest and lowest score ranges, an earlier report by FICO also found. FICO is the developer of one of the scores most widely used by lenders. FICO scores range between 300 and 850.

    In the so-called “K”-shaped economy, some borrowers are in financial distress while others have strengthened their financial position, largely by benefiting from stock market rallies and appreciating home values. 
    Wealth has risen fastest for those at the very top, other data from the Federal Reserve also shows, as the value of their investment holdings continues to grow. The top 10% of Americans hold over 87% of corporate equities and mutual fund shares.
    On the other side of the divide, separate studies show large pockets of heightened financial strain.

    Inflation, debt and the shutdown: A ‘volatile combination’

    Beyond rising debt balances, 38% of consumers said it’s “difficult” or “very difficult” to pay bills on time. Among those falling behind, 67% cite insufficient income, according to a survey by debt management company Achieve released Friday.
    The federal government shutdown, which has now stretched past a month, has only added to the pressure on low-income families by affecting critical government programs, including SNAP food benefits.
    “The volatile combination of consumer debt, inflation hangover on prices, elevated interest rates and the shutdown could leave a lasting economic impact, particularly for those more at-risk American households struggling to make ends meet,” said Brad Stroh, Achieve’s co-founder and co-CEO.

    “Even though they have a job in most cases, their purchasing power is no longer rising,” Mark Zandi, chief economist at Moody’s, said of Americans who are struggling.
    Because wage gains have largely not kept pace with stubborn inflation, “many are borrowing money to supplement their income and now they are paying interest on that debt,” Zandi said.
    “They owe a lot of money, but they own very little,” he said.
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    Social Security’s 2.8% COLA for 2026 is sparking debate over how the annual increase gets calculated

    The Social Security cost-of-living adjustment will be 2.8% in 2026, which will put on average an extra $56 per month in retirees’ monthly checks.
    The extra sum will not be a windfall for beneficiaries who are still contending with higher consumer prices.
    Lawmakers and experts say the way the annual increases are calculated could change. But there’s a fierce debate over which approach may be best.

    Skynesher | E+ | Getty Images

    A Social Security cost-of-living adjustment of 2.8% will go into effect in 2026, increasing retirement benefits by $56 per month on average, according to the Social Security Administration. With many older Americans struggling to keep up with rising prices, the moderate adjustment is reigniting a long-standing debate on the calculations that go into the COLA.
    The size of the latest cost-of-living adjustment is about average. Out of 51 COLAs that have been put into effect since 1975, the 2026 adjustment ranks at No. 29, according to The Senior Citizens League.

    Yet just 10% of seniors are happy with the annual COLAs, a recent survey from the nonpartisan senior group found, based on responses from 1,920 adults age 62 or older.
    The COLA is assessed each year to help benefits for approximately 75 million Americans keep pace with rising costs. Changing the underlying data used in its calculation could affect the size of beneficiaries’ payments, and also have implications for Social Security’s trust funds, which are running low.

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    The Social Security cost-of-living adjustment is calculated based on a subset of the consumer price index, formally known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
    “CPI-W has always been the measure that was used,” said Emerson Sprick, director of retirement and labor policy at the Bipartisan Policy Center.
    The announcement of the COLA for 2026 prompted some Democrats in Washington to propose a bill to change the index used for the COLAs to the Consumer Price Index for the Elderly, or CPI-E, which some contend would better reflect seniors’ spending. Another group of Washington Democrats has pitched increasing benefits by $200 per month for six months in 2026 to help beneficiaries cope with elevated consumer prices.

    “We want the CPI-E or 3%, whichever one is higher,” Shannon Benton, executive director at The Senior Citizens League, said of the group’s long-term campaign for a more generous COLA.

    Social Security checks under different measures

    Yet the data suggests that switching to a different COLA measure might not result in the substantial boost to benefits that retirees and other beneficiaries hope to see.
    Based on the current COLA formula, a person who claimed a $1,000 monthly benefit in 2005 would be receiving $1,601 now, according to Sprick’s calculations.
    If instead the COLAs had been indexed to the CPI-E over that period, their benefits would be $1,622 now, or just 1% more, according to Sprick.
    Another measure that’s often suggested for the COLA — the chained CPI — would result in a benefit of $1,555 now, or 3% less than the current formula, Sprick’s calculations found.
    Likewise, 2024 calculations by Alicia Munnell, a senior advisor at the Center for Retirement Research at Boston College, found the average annual rate increase for the CPI-W was 2.5% from 2000 to 2023, based on CPI data from the Bureau of Labor Statistics. The CPI-E would have pushed that average annual rate of increase to 2.6% in those years, while the chained CPI would have resulted in a 2.2% average boost to benefits, Munnell found.

    “It all depends on when you retire,” said Mary Johnson, an independent Social Security and Medicare analyst, who is among the advocates for switching to the CPI-E.
    “In some years, it would have made a very big difference,” Johnson said. “In other years, not so much.”
    Yet over the course of a 20- to 25-year retirement, indexing the COLA to the CPI-E would result in slightly higher benefits — and that compounds over time, she said.

    COLA calculations under other indexes

    The current index used to calculate the COLA, the CPI-W, measures the changes in prices for a basket of goods and services consumed by urban wage earners and clerical workers.
    It is a subset of the broader CPI index used to measure the rate of monthly and annual inflation, or the Consumer Price Index for All Urban Consumers, or CPI-U. The CPI-W and CPI-U indexes track each other very closely, according to Sprick, and over time will produce the same average COLAs.
    The CPI-E weights expenditures differently compared with the CPI-W, with medical care, housing and recreation costs comprising a larger portion of the index, according the Bipartisan Policy Center. Other costs — including apparel, education, food and transportation — are not emphasized as much as they are in the CPI-W.
    Another index, the chained CPI, shows how consumers adjust their buying behavior in response to price changes across categories, such as substituting chicken when the price of beef rises.
    The chained CPI is “most accurate” because it includes a broader segment of the population, according to Romina Boccia, director of budget and entitlement policy at the Cato Institute, who is among the advocates for changing to that measure.

    The chained CPI represents 1 out of 8 Americans in its calculation, while the current index used for the COLA, the CPI-W, includes the purchasing behavior of 1 in 3 Americans who are not seniors, Boccia said.
    The chain component of the CPI reflects not only inflation, but also its impact on purchasing power, she said.
    “That’s what we’re really trying to account for, is the purchasing power of the Social Security benefit,” Boccia said. “We’re trying to keep that fixed.”

    Updating the way the COLA is measured, and in turn, the benefits people receive, would have an impact on Social Security’s trust funds. The trust fund the program relies on to pay retirement benefits may run out in 2032, according to the Social Security Administration’s latest projections based on changes in the “big beautiful” legislation Congress passed in July.
    A switch to the chained CPI would reduce the program’s shortfall by 14%, while turning to the CPI-E would increase it by 11%, according to the Bipartisan Policy Center, citing estimates from the Social Security chief actuary.
    Even as Social Security faces long-term funding woes, 34% of respondents in The Senior Citizens League survey said they would want the Trump administration and Congress to prioritize better COLAs, while 33% said they would want fixing the program’s finances to come first.

    Some experts say other reforms could help

    Many of today’s seniors say the current COLA only goes so far to help with higher costs. Prices for electricity, natural gas and meat are still up significantly, said Johnson, who is retired.
    “Heaven help you if you have a flat tire or you need to do something with your car,” Johnson said. “Just the parts are so expensive these days.”
    Beneficiaries are also expected to face higher Medicare Part B premiums in 2026. Medicare’s trustees have projected the standard monthly premium may rise 11.6% to $206.50 next year, up from $185 per month in 2025. Because those premiums are typically deducted directly from Social Security checks, they will affect how much of the COLA beneficiaries may see reflected in their checks.
    How far Social Security benefits go depends on the area in which a retiree lives, according to the Elder Economic Security Standard Index, which was developed by the Gerontology Institute at the University of Massachusetts Boston to measure the income older adults need to pay for their basic needs and age in place.

    “While the cost-of-living adjustment is important, there are still too many people who are at the maximum benefit they can withdraw, whether it’s individual or with a spouse, [that] is still really low,” said Michelle Putnam, director of the Gerontology Institute.
    Social Security is the primary source of income for 40% of older Americans, according to AARP.
    To help shore up benefits for those who are struggling, some experts, including Boccia at the Cato Institute and Sprick at the Bipartisan Policy Center, say broader benefit reform is necessary.
    “Certainly, benefits should be strengthened for some beneficiaries; the way to do that is not through COLA,” Sprick said.
    Instead, the way benefits are calculated could be changed to ensure that beneficiaries who are at the lower end of the lifetime earnings distribution receive an adequate benefit from the time they claim, he said. More

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    After years of outsized stock market returns, it’s time to reassess your portfolio ‘risk exposure,’ top-ranked advisor says

    The major stock indexes have posted gains of more than 60% since mid-October 2022.
    If you haven’t rebalanced your investment portfolio lately, it’s worth doing it now, financial advisors say.
    After years of strong gains, investors “could have too much in equities and not enough in safe assets,” said James Armstrong, president of Henry H. Armstrong Associates, which is ranked No. 14 on CNBC’s Financial Advisor 100 list for this year.

    Pekic | E+ | Getty Images

    [CK bullet with numbers.]
    The stock market’s impressive run in recent years may be fattening your portfolio, but it also might have thrown your intended investment mix off balance.

    While artificial intelligence stock valuations spurred a market decline on Tuesday, the major indexes are still well up this year, propelled both by AI-related and big technology stocks. Through Tuesday’s close, the S&P index is up about 15.1%. Both the Dow and the Nasdaq have also posted double-digit gains for the year of roughly 10.6% and 20.9%, respectively.
    Those jumps come on the heels of outsized returns in 2023 and 2024. In fact, the S&P has surged by about 90% since mid-October 2022. The Dow’s gain in that time is about 61% and the Nasdaq, roughly 126%. Some experts view the market as overpriced — meaning they expect a correction at some point.

    More from CNBC’s Financial Advisor 100:

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    Financial advisors say if you haven’t recently rebalanced your portfolio, now is the time. Rebalancing restores your intended asset allocation — that is, how you divvy up your portfolio among stocks, bonds and other assets.
    Investors “should look at their risk exposure and review the purpose of the money and then sell down riskier areas of their portfolio,” said James Armstrong, president of Henry H. Armstrong Associates in Pittsburgh, which is ranked No. 14 on CNBC’s Financial Advisor 100 list for this year.
    “They could have too much in equities and not enough in safe assets,” Armstrong said.

    Don’t let FOMO lead to ‘a dangerous posture’

    Say you built a portfolio with 60% stocks and 40% bonds. If you were never to rebalance, significant stock market returns could lead to that ratio standing at more like 90:10 over time — a portfolio based mostly on stocks, which come with more volatility and risk.
    “I’ve been surprised by how many people are afraid to cut back their equity exposure because they’re afraid of missing out on upward gains, and that’s a dangerous posture,” Armstrong said.

    Basically, if you are in retirement or near it, you don’t have the time to recover from a prolonged down market the way retirement savers in their 20s or 30s do.
    “I wouldn’t let fear of missing out blind me to the possibility [of] a bear market,” he said. “I’d want to have some money in a safe place.”
    Armstrong also said it’s important to think about how a 20% or 30% drop in the value of your portfolio would affect your life or your future.
    “If it will matter, the time to take action is now while prices are high,” Armstrong said. “Take some money off the table and put it in a safe place.”

    How rebalancing benefits investors

    Advisors say you should have a rebalancing strategy and stick to it.
    “Rebalancing takes the emotion out of it. It puts the client in a position where they have a systematic approach,” said Benjamin Offit, a certified financial planner based in Columbia, Maryland, and a senior wealth advisor and partner for Composition Wealth of Los Angeles. “That enables them to unemotionally sell high and buy low.”
    Rebalancing also lets you profit off gains from outperforming investments while paying lower prices for underperforming ones.
    Remember that if you sell stocks you hold in a taxable account, any gains on assets held for one year or less are subject to regular income tax rates. Profits on assets held longer than a year are considered long-term gains and face tax rates of 0%, 15% or 20%, depending on your income. 

    If you can stick to a rebalancing strategy, it helps with tax planning, Offit said. If you rebalance before your positions drift too far from their target, you won’t incur a huge capital gain, he said.
    In contrast, allowing massive runups over time in a particular position can make it harder to sell due to high embedded capital gains, which can mean a large tax bill, he said. 
    Many financial advisors recommend rebalancing your portfolio at least once a year, if not more often.
    “I think a couple times a year or maybe more, look at your risk exposure and review what the goal is for the money,” Armstrong said. More

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    Donations to hunger relief organizations surge amid SNAP crisis: Here’s how to give wisely

    SNAP benefits, formerly known as food stamps, are being reduced or delayed amid the ongoing government shutdown.
    Across the country, local food banks are stepping up to help families facing food insecurity.
    Donations to hunger relief organizations jumped nearly 600% last week, according to nonprofit evaluator Charity Navigator.

    The federal government shutdown, which has now stretched past a month, has put critical services in jeopardy, including the Supplemental Nutrition Assistance Program. To help fill the gap, individual donors are lending outsized support to hunger relief nonprofits.
    The SNAP program, formerly known as food stamps, is run by the U.S. Department of Agriculture and provides basic assistance to about 42 million people. The agency cautioned last month that food aid would be suspended as the shutdown drags on.  

    A sign hangs at a customer service area, as the U.S. President Donald Trump administration said it plans on Monday to partially fund food aid for millions of Americans after two judges ruled it must use contingency funds to pay for the benefits in November during the government shutdown, at a grocery story in Long Beach, New York, U.S., Nov. 3, 2025.
    Shannon Stapleton | Reuters

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    “[Monday’s] announcement is an important first step, but it’s not enough,” Diane Yentel, president and CEO of the National Council of Nonprofits, an industry association, said in a statement. “Millions of families, children, and seniors remain at risk of delayed or reduced food assistance,” she said.
    Local food banks are often the next line of defense. However, these nonprofits are also under pressure with federal funding on hold. 

    “Food banks, shelters, and community organizations are stretched thin,” Yentel said. “Every delay or reduction in SNAP benefits pushes more people toward emergency assistance and places additional strain on the nonprofit sector.”

    Donations to hunger relief efforts spike

    Amid critical funding shortages, individual donors have stepped in to help the nonprofits, charities and public service organizations that provide support to families in need.
    Between Oct. 23 and Oct. 27, giving to hunger relief organizations surged roughly 587%, according to Charity Navigator, a third-party evaluator.
    “A lot of food banks are getting a tremendous increase in donations,” said Charity Navigator’s CEO Michael Thatcher. “Knowing that your neighbor is going hungry is not OK.”

    A resident browses donated food items in the pantry at Feeding South Florida in Pembroke Park, Florida, US, on Friday, Oct. 31, 2025.
    Eva Marie Uzcategui | Bloomberg | Getty Images

    Donors can find a relief effort through sites such as Charity Navigator, BBB Wise Giving Alliance or CharityWatch, which assess criteria such as how transparent a nonprofit is about its finances and how much of its budget goes toward programs.
    To that end, Charity Navigator compiled an “end hunger fund,” which splits donations among seven leading nonprofits that provide immediate support, including Feeding America and Second Harvest. 
    Alternatively, search for food banks within your state or region, Thatcher said: “You can give locally or nationally; the need is there.”
    Many community groups are also collecting food and personal care items to distribute to families at risk.
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