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Without changes, the retirement-savings gap could create a $1.3 trillion economic burden through 2040, according to Pew Research.
However, American households can close the gap over a 30-year period by saving an extra $1,685 per year, which is roughly $140 per month.
One solution may be state-run retirement plans with auto enrollment, research shows.

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Many Americans aren’t saving enough for retirement — and the shortfall could pressure state and federal budgets in the decades ahead. But research shows that state-run programs could help people save for retirement while reducing that strain.
Without changes, the retirement-savings gap could create a $1.3 trillion economic burden through 2040, with increased public assistance costs, lower tax revenue and more, according to a study released Thursday by the Pew Charitable Trusts.

If the current trends continue, 61% of elderly households are expected to have an annual income below $75,000 in 2040, and the yearly income shortfall is projected to be $7,050 by the same year.
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“Many of these retiree households with a shortfall in annual income will need social assistance in some form or another,” said John Scott, director of the Pew Charitable Trusts’ retirement-savings project.
Roughly half of working households may struggle to maintain their pre-retirement standard of living in their golden years, the Center for Retirement Research at Boston College reported this week.
One of the key issues is limited access to workplace retirement plans. As of March 2022, more than 30% of private industry workers didn’t have an employer retirement plan, according to the U.S. Bureau of Labor Statistics.  

How ‘enhanced savings’ may address the shortfall

While the estimated $1.3 trillion economic burden is a significant share of state and federal budgets, Scott feels encouraged by a possible solution to help close the gap.
The report shows that American households could erase the retirement-savings gap over a 30-year period by saving an extra $1,685 per year, which is roughly $140 per month.
Scott said the savings boost may be possible through state-run retirement savings plans, noting that initial data from states already offering the program has been promising.

“Participants in these automated savings programs are saving anywhere from $105 to $190 per month,” he said, referring to an average based on available state data.
For example, if you’re a private sector worker without a 401(k), you may be automatically enrolled to defer part of every paycheck, say 5%, into a state-sponsored account, such as an individual retirement account, which the worker owns, Scott explained.
State-run retirement programs have become increasingly popular as more states pass legislation. In January, Georgetown University’s Center for Retirement Initiatives predicted that state retirement-plan assets may exceed $1 billion in 2023.
Correction: The U.S. retirement-savings gap through 2040 was estimated at $1.3 trillion in the Pew Charitable Trusts survey. An earlier version misstated that figure. More

As the Supreme Court weighs President Joe Biden’s student loan forgiveness plan, college tuition keeps climbing.
This year’s incoming freshman class can expect to borrow as much as $37,000 to help cover the cost of a bachelor’s degree, according to a recent report.

Regardless of where the Supreme Court comes out on President Joe Biden’s student loan forgiveness plan, education debt isn’t going away.
College is only getting more expensive. Tuition and fees plus room and board at four-year, in-state public colleges rose more than 2% to $23,250, on average, in the 2022-23 academic year; at four-year private colleges, it increased by more than 3% to $53,430, according to the College Board, which tracks trends in college pricing and student aid.

Many students now borrow to cover the tab, which has already propelled collective student loan debt in the U.S. past $1.7 trillion.

Students, families are taking on more college debt

Don’t ‘assume future forgiveness’

If the Supreme Court fails to affirm Biden’s plan, millions of federal borrowers would likely be disappointed with the president for failing to deliver sweeping cancellation, legal experts predict.
And even if the justices rule in favor of the Biden administration’s initiative to provide debt relief to low- to middle-income borrowers, students and their parents should not assume this would happen again going forward, according to Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.” 

Nobody should assume future forgiveness as they make borrowing decisions today.

Rick Castellano
Sallie Mae spokesman

“Such broad relief as was announced last August citing the financial harms of the pandemic is not likely to occur again,” he said.
“Nobody should assume future forgiveness as they make borrowing decisions today,” added Rick Castellano, spokesman for education lender Sallie Mae.

Loans ‘shouldn’t be the first step’ to cover costs

“Borrowing can be important step, but it shouldn’t be the first step,” Castellano said. Further, “when it comes time to borrow, it’s critical to do so responsibly and not overborrow,” he added.
There are several strategies that can help, but a “good rule of thumb is never to incur more debt than the annual salary one will receive at their first job after having been graduated,” Chany said.
For those already struggling under the weight of student debt, borrowers have a little more time without a student loan bill, although the U.S. Department of Education indicated that the payment pause could end as soon as August.
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This story is part of CNBC’s College Money Guide 2023, a series to help students and recent graduates understand their money and start their adult life off on a solid financial path.
Getting your first full-time job out of college is exciting!

It’s thrilling to know that someone wants to hire you for a professional job, that you will be getting a salary and that you are officially entering adulthood. But it’s important to not get so caught up in the “It’s an honor to get the offer” feeling and forget to advocate for yourself.
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Almost three-quarters, 73%, of employers expect candidates to negotiate salary, according to CareerBuilder. But 55% of workers don’t ask for a higher salary when they are offered a new job.
“Yes, absolutely, you should always try to negotiate your first job offer and, in fact, and every job offer,” said Alexandra Carter, a professor at Columbia Law School who teaches negotiation skills. “Employers are expecting you to negotiate.”

Employers try to get you ‘as cheap as they can’

Why is advocating for yourself important? Because what you do with your first job offer is the foundation for all your future roles. Negotiate a higher first salary and when it’s time for your next, you will be starting from a higher level. Fail to negotiate, and you’re starting behind — especially since a company’s first offer may not be its best.

“No employer is just going to offer you the most they’re willing to pay,” said Linda Babcock, professor of economics at Carnegie Mellon University and author of books such as “Women Don’t Ask: The High Cost of Avoiding Negotiation.” “They’re trying to get you as cheap as they can.
“Nothing personal — it’s just business.”

Negotiating isn’t just about numbers; it’s also about messages.

Alexandra Carter
author of “Ask for More: 10 Questions to Negotiate Anything”

New grads often think they don’t have any leverage to negotiate their first job offer, but that’s not true.
“You have more leverage than you think,” said Carter, who is also the author of “Ask for More: 10 Questions to Negotiate Anything.” “You start by focusing on your strengths.
“Just because you’re short on experience doesn’t mean that you’re short on value,” she added “Part of career success is learning to tell the story of who you are and the kinds of problems you can solve for the company.”

3 tactics in approaching a salary negotiation

Your negotiation starts from the minute you sit down for that first interview, Carter said.
“Negotiating isn’t just about numbers; it’s also about messages,” she said. “You want to be teaching that employer how to value you and how to think about what you bring to the table from that first interaction.”
These three strategies may help:

Research typical salaries. Go in with an understanding of what the going rate is for the job you are applying for. Companies are increasingly posting salary ranges for jobs, thanks to pay-transparency laws. But it’s also a good idea to do your own homework, using Glassdoor, Salary.com or other job sites that post salaries. It’s also a good idea to reach out to a friend or mentor in the industry to get a sense of the salary for this position. If you know someone at the company you are applying to — even better.
Set the right tone. You want to come off as confident and friendly in your request for higher pay. Carter says think of that person you are negotiating with as a partner, not an adversary. “I have a saying in negotiation: ‘I never request — I recruit,'” Carter said. “I want to pull that person around to my side of the table so that we are working on a common objective. In this case, it’s ‘Here’s what I’m bringing to the table and here’s what the company is bringing to the table and how can we make this package something that excites us both.'”
Emphasize your strengths. You may not have a ton of work experience but what you do have is a new degree. And while you might not think of being fresh out of college as an advantage — it is. It means you have been trained on the latest technology and developments in your field, so you could bring skills and competencies to the company that its existing employees don’t have.

How to answer: ‘What is your salary range?’

Everyone tries not to be the first to throw out a number, but then there it is: The recruiter or interviewer asks what salary range you’re looking for. How do you answer that?
“I’d say, ‘Thank you for asking. Tell me more how the company is seeing that range and how a candidate fits within that,'” Carter explained. “In other words, I want to understand first, before I put out a number, the way that the company is valuing various factors.”

For example, if they say $100,000 is for people with two years of experience and $50,000 is for people who are right out of college — that gives you your answer right there, Carter said.
If they say that it’s really a case-by-case basis, then you go back to that advice to focus on your strengths.
“If I’m able to tell a story about how my qualifications, my education, my experiences are going to make a substantial impact right away, then I can go in right away and negotiate for more,” Carter said. “I would not put out a number until I thoroughly understood how the company is viewing that range.”

How to ask: ‘How much does the job pay?’

Yes, you can ask them what the salary range is for this position, but timing is everything. Don’t just blurt out: “How much does this job pay?” Instead, wait until after you’ve asked a lot of information about the role and responsibilities and already talked about what you bring to the table.
Then, Carter suggests saying: “I’ve enjoyed these conversations, and I’d just love to make sure that we are aligned on compensation. Can you tell me more about how the company is thinking about compensation for this role?”

What to do if a job offer is too low

OK. So, now they’ve given you an offer — but it’s not enough. What can you do?
There are some positions where the entry-level salaries are standardized and you may not have that much wiggle room, said Gorick Ng, a Harvard career advisor and author of “The Unspoken Rules.” That could be likely if you get accepted to a leadership development program at a Fortune 500 company or a large bank or accounting or consulting firm. Smaller, less structured organizations will have less rigidity in their salary bands, so you might be able to negotiate for more. It’s important to read the situation.It can help if you have a competing offer (which is why it’s important to apply to a lot of jobs not just a few dream jobs) or if you have a specialized skill in a hot job market.
“I’ve seen new grads with a specific engineering skill set who’ve gotten multiple job offers — all from companies that are intensely competing against each other — who had the ‘leverage’ to ask for more,” Ng said. So, ask yourself: “Am I a dime a dozen in this role or industry? Or, are there not many graduates with my specific skillset or who are willing to do my specific job?”

“If you’ve done the research to make sure that your number is justifiable based on some metric — your qualifications, or what you’ve seen from other job postings, then you are well within your right to counter even if it’s a significant move,” Carter said.
What you shouldn’t do is bring up outside factors like inflation or personal expenses such as student debt.
“Companies don’t set salaries on what’s convenient for employees,” Carter said. “It’s much more about the value you can provide to the company,” as well as the market rate for that position.
If they are firm in their final offer but it’s low, you can ask about what other benefits there are. Maybe they have a free gym, a travel or training budget or a stipend for home-office equipment if the job is full or partially remote.

I’ve seen new grads with a specific engineering skill set who’ve gotten multiple job offers … who had the ‘leverage’ to ask for more.

Harvard career advisor and author of “The Unspoken Rules”

“I would not come back after a best and final and ask for $50,000 more,” Carter said. “Come back if you felt strongly — one incremental thing that would make that job right for you.
“Express your appreciation and ask rather than demand.”
Negotiating doesn’t always come easy to everyone but it’s important to do it for your financial future — and for your future at the company.
“When you negotiate on behalf of yourself, you’re showing the company what kind of negotiator you’re going to be on their behalf,” Carter said. “You’re setting yourself up as a leader and someone to be valued from minute one.”
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As debt ceiling negotiations continue, some officials are warning Social Security checks may be affected.
Benefit checks may be delayed, which would cause financial hardship for individuals and families who rely on that money.
Still, some policy experts say it is unlikely the standoff would come to that point.

Dobrila Vignjevic | E+ | Getty Images

“We don’t know what the implications are of a default because we’ve never had one,” she said.
While that means there is guesswork involved, we do know some things about how Social Security beneficiaries could be affected.
Notably, some policy experts say it is unlikely we would ever get to that point.
“If there is a scenario where seniors are not getting their Social Security checks, there would be a near immediate resolution of this fight,” said Ed Mills, Washington policy analyst at Raymond James.

Social Security checks may be delayed

Experts are generally warning that checks for Social Security beneficiaries may be delayed if the government no longer has the legal authority to borrow.
The National Committee to Preserve Social Security and Medicare has warned that Social Security, Medicare, Medicaid and other payments “may not be made on time and in full” without a debt limit increase.
“Even if all we’re talking about is a delay, you could end up with significant hardship on a large number of people,” Freese said.
They may not be able to buy groceries or medications, which could have “catastrophic” consequences after even a couple weeks’ delay, she said.

Debt default vs. shutdown

President Joe Biden hosts debt limit talks with House Speaker Kevin McCarthy, R-Calif., in the Oval Office at the White House on May 9, 2023.
Kevin Lamarque | Reuters

It is important to keep in mind that a debt default and a government shutdown are different, Freese noted. While failure to fund the government could prompt a shutdown, not increasing or eliminating the debt ceiling may lead to a default.
“For Social Security, the implications are very, very different in those two outcomes,” Freese said.
With a government shutdown, parts of the Social Security Administration will stop, but checks, for the most part, will be automated and keep going out, she said.
With a default, however, there may be no money to send the checks out, Freese said.
Benefits are paid through two sources: payroll taxes and bonds the U.S. Department of the Treasury redeems from the Social Security trust funds. While payroll taxes will keep coming in, it is not clear whether the government will be able to come up with the cash to redeem the bonds to send out the checks, she said.

Threat to Social Security may be ‘exceptionally low’

For the U.S. to reach a point where it can no longer send out Social Security checks, it would have to cross the “x date” — the point at which it can no longer pay its obligations through extraordinary measures without raising or eliminating the debt ceiling.
Before that happens, markets will react, Mills predicted.

“Market pressure has historically also been one of the ways we have seen D.C. react in the past,” Mills said.
Consequently, the threat of Social Security checks not going out is “exceptionally low,” he added.
But it’s “what could happen if no resolution is ever met,” Mills said.
Still, it is the responsibility of members of Congress to explain the potential consequences if no action is taken, according to Mills. More

Employers now project hiring 4% more new college graduates than they did from the class of 2022, down from earlier projections.
Opportunities and pay vary greatly by location.
San Jose, California, has the highest rate of new grad hiring and the greatest potential to earn six figures, according to a new report.

Hiring outlook slows for new college grads

Overall, job prospects look relatively positive for the class of 2023. Employers plan to hire about 4% more new college graduates from this year’s class than they hired from the class of 2022, according to a report from the National Association of Colleges and Employers, or NACE.
Although that’s down significantly from earlier projections, “there’s still a lot of opportunity out there,” said Kevin Grubb, associate vice provost of professional development and executive director of the career center at Villanova University.
Many undergraduates are giving themselves a head start, he added. “Students have become more motivated and eager to be ready for their career search early on,” Grubb said. “Usually over half have done an internship, which does help them in the labor market when they finish.”

This year’s college seniors are also quick to jump on opportunities: 62% have already accepted their first job after college, compared with only 20% from the class of 2022 this time last year, according to a separate report by LaSalle Network.  

Where new grads get the best bang for their buck

Photo by Mark Scott via Getty Images

Some companies, in industries such as technology, have pulled back given the current economic uncertainty, according to new data from payroll provider Gusto.
However, there are still pockets of growth, mainly in personal service industries such as retail and food and beverage, along with health care and education, Gusto found. NACE also identified significant upswings in transportation and chemical and pharmaceutical manufacturing.
Of course, opportunities and pay also vary by location. San Jose, California, has the highest rate of new grad hiring and the greatest potential to earn six figures, according to Gusto’s report.

Adaptability and flexibility is going to be key.

Luke Pardue
economist at Gusto

But “when you adjust for cost of living, there may be more value in other cities such as Houston, Philadelphia, Austin, Atlanta and Dallas,” said Luke Pardue, an economist at Gusto.
In fact, salaries in Houston stretched the furthest while New York was the least affordable city overall.
“Adaptability and flexibility is going to be key,” Pardue said.
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Strong consumer spending has promoted modest economic growth in the U.S. in 2023.
Indicators like saving rates and credit use suggest that households may soon rein in their budgets.
A recession is not certain or imminent given the current outlook.

Economists have been forecasting a recession for months, and that looming downturn is one of the most anticipated in U.S. history. But it’s not yet materialized, in part due to strong consumer spending.
“Consumer spending represents more than half of the economy,” said Curt Long, chief economist at the National Association of Federally-Insured Credit Unions. “So if consumer spending is strong, that alone is, generally speaking, enough to keep the economy from slipping into a recession.”

In the first quarter of 2023, gross domestic product grew at a 1.1% rate compared to the previous quarter. This modest level of growth is an improvement from mid-2022 GDP figures, which initially brought recession fears to light.
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A key reason for the fear: Inflation stayed stickier than economists anticipated. In May, the U.S. Bureau of Labor Statistics reported headline annual inflation of 4.9%.
To combat inflation, the Federal Reserve has hiked its overnight bank lending rate 10 times over the past year or so. At the Fed’s May meeting, policymakers hinted that they may pause further interest rate increases, barring unexpected developments.
The end of this tightening cycle may be coming into focus as consumers reach their breaking point. As the pandemic fades, historic levels of personal saving have taken a nosedive. Deposits at banks have crested as consumers keep spending amid continually rising prices.

Getty Images

This is happening as the least well off are increasingly relying on credit in their day-to-day lives. Roughly 29% of households earning less than $50,000 a year were using credit cards to finance their spending, according Bank of America Institute economists. Credit-use rates have risen steadily in recent years despite being below higher pre-pandemic levels.Moderate-income Americans also are facing the significant headwind of less tax-refund money. The average refund this year is $2,777 through April 28, down 8% from the same period last year, according to IRS data.
“Because this is the same household that rely more on the tax refund to finance their spending, a lower refund really has some negative impact on their spending,” said Anna Zhou, an economist at the Bank of America Institute.

Analysts at the New York Federal Reserve report record levels of credit card debt in 2023. This underscores the economic split in the country, with some consumers flush with savings following a thrifty pandemic while others are finding it increasingly difficult to spend wisely amid rising prices, mounting layoffs and the potential of recession.
Still economists see the chance for a soft landing. “We don’t think … the slowdown process will be as dramatic as some people have feared,” said Zhou. “And it will be a gradual process.”
Watch the video above to learn how U.S. consumer spending has so far fended off a recession. More

Generative AI models have already been implemented in technical roles, such as financial analytics and drug development, as well as more human-facing sectors such as customer service and marketing. 
Amid the quick rise and implementation of AI across sectors, some investors are concerned that the potential ESG downsides haven’t been adequately considered and safeguarded against. 

Userba011d64_201 | Istock | Getty Images

Wall Street has eagerly rallied around companies making notable strides in artificial intelligence. However, several investors warn that the increasingly widespread deployment of AI has opened a Pandora’s box of concerns about environmental, social and corporate governance, or ESG.
Generative AI models — ChatGPT being the most prominent example — have already been implemented in technical roles, such as financial analytics and drug development, as well as more human-facing sectors such as customer service and marketing. 

related investing news

Amid the quick rise and implementation of AI across these industries, some investors worry that the potential ESG downsides haven’t been adequately considered and safeguarded against. 
Investors have called for more transparency and data from companies on how they’re using and investing in the new technology. The current lack of sufficient data from U.S. companies means the space is currently “the Wild West,” as described by Thomas Martin, a senior portfolio manager who runs ESG strategy at Globalt. 
“If you’re an ESG-focused investor, you’re dependent on the information that you get. The companies aren’t providing that yet, except the things that will make you imagine things. You can’t base an evaluation based on something you’re imagining, or don’t know if it’s true or accurate, or when it’s coming,” Martin said. “There has to be information that’s out there that comes from the companies themselves and how they’re using [AI].”

Lack of transparency and safeguards

Investors and analysts have noted that ESG regulatory guidelines for AI are notably laxer in the U.S. than in the European Union and in Asia. Meanwhile, in South Korea, the government’s post-Covid Digital New Deal initiative includes national guidelines for AI ethics to promote ethics and responsibility when developing artificial intelligence. 
Researchers have also sought to quantify fairness and bias in AI models through various socio-ethnic parameters. For example, Stanford University’s artificial intelligence index report scores for bias across AI models. It found a “counterintuitive” correlation between fairness and bias: models that scored better on fairness metrics demonstrated stronger gender bias, and less gender-biased models were more toxic.

Technology’s moving so quickly, and I think this is the most disruptive from a social fabric standpoint. It’s actually pretty damn scary. And I’m an engineer by trade, and I’ve been doing this for 30 years. … You know, what I do for a living can probably be replaced in two to three years.

Ted Mortonson
managing director, Baird

Ted Mortonson, managing director at Baird, warned that he sees AI in a similar position to where bitcoin was a few years ago, noting that the U.S. regulatory framework is “not set up for very extreme technology advances.” He added Microsoft CEO Satya Nadella’s comments during the company’s earnings call that it has “taken the approach that we are not waiting for regulation to show up” did not bode well.
“For my clients, that rubbed a lot of people the wrong way. Because this is a social issue,” he said. “I mean, if the [Federal Reserve] wants unemployment to go up and a weakening economy, generative AI is going to do it for them.”

Assessing ESG impacts

While there is no standardized methodology to quantify the exact ESG impacts of a given AI-related investment, there are certain considerations investors can take. 
Morgan Stanley created a three-pronged approach on AI-ESG-driven investments: 

Assessing how an AI investment can reduce harm to our environment — such as by driving energy efficiencies, preserving biodiversity and reducing waste. 
Examining how AI enhances people’s lives, such as by improving interactions between people and businesses. 
Driving AI technology advancements — being a “key player or enabler across the AI ecosystem to make businesses and society better.” 

The firm characterizes the first two as likely requiring a low to a high level of effort from investors. It notes that the final step likely requires a high level of engagement. 
Some investors believe AI itself can help investors monitor and track ESG efforts by companies. Sarah Hargreaves, head of sustainability for Commonwealth Financial Network, said AI could be particularly useful for investors to compare the environmental impacts of their investments alongside current and forthcoming regulatory standards.
“I’d also think that AI’s ability to manage and optimize relative ESG data would be particularly relevant for investors looking to delineate between dedicated ESG investments versus those subject to greenwashing,” she wrote in an email to CNBC.  
Baird’s Mortonson also mentioned that tech companies themselves could make AI-ESG analysis easier. He noted that databases and cloud-based companies such as ServiceNow and Snowflake are “incredibly well positioned with Next Generation AI” to release accurate and detailed ESG data given the significant amounts of data they store.

Employment obsolescence

As AI gains more capabilities and becomes more widely implemented, concerns over job displacement — and potentially obsolescence— have emerged as some of the biggest social concerns. 
The Stanford report, which was published earlier this year, found that only 18% of Americans are more excited than concerned about AI technology — with the foremost concern being “loss of human jobs.” 
Additionally, a recent study by professors at Princeton University, the University of Pennsylvania and New York University suggested that high income, white-collar jobs may be the most exposed to changes from generative AI. 
The study added that developing policy to help minimize any disruptions stemming from AI-related job losses “is particularly important” as the effects of generative AI will disproportionately target certain occupations and demographics. 
“From a social standpoint, it will impact employment, both blue-collar and white-collar employment, I would say materially in the next five to 10 years,” Mortonson said.
Globalt’s Martin sees such losses as part of the natural cycle of technological advancements.
“You can’t stop innovation anyway; it’s just human nature. But it frees us up to do more, with less, and to foster growth. And AI will do that,” said Martin.  
“Are some jobs going to go away? Yeah, most likely. Will aspects of jobs get better? Absolutely. Will that mean that there will be new things to do? That even the people who are doing the old things can do and move into and migrate into? Absolutely.”
Mortonson was less sanguine. 
“The genie’s out of the bottle,” he said, noting that companies are likely to embrace AI because it can boost earnings. “You just don’t need as many people doing what they’re doing on a day-to-day basis. This next generation of AI [is] basically bypassing the human brain of what a human brain can do.”
“Technology’s moving so quickly, and I think this is the most disruptive from a social fabric standpoint. It’s actually pretty damn scary. And I’m an engineer by trade, and I’ve been doing this for 30 years,” he said. “You know, what I do for a living can probably be replaced in two to three years.” More

Social Security beneficiaries saw the biggest cost-of-living adjustment in 40 years for 2023.
But as inflation subsides, next year’s benefit increase may not be as generous, a new estimate finds.

Bernardbodo | Istock | Getty Images

Benefits’ buying power dropped 36% since 2000

The Senior Citizens League also evaluated how well Social Security benefits have kept up with rising costs and found they have fallen short.
Over the past year amid persistent high inflation, eggs were the fastest-growing cost for seniors, based on the group’s analysis of Bureau of Labor Statistics data through February. Other categories that landed in the top five fastest growing costs include apples, bread, coffee and dental visits.
Since 2000, Social Security benefits have lost 36% of their buying power, according to The Senior Citizens League’s calculations.
To be able to live as well on Social Security benefits as beneficiaries did in 2000, today’s retirees would need an extra $516.70 per month, the nonpartisan senior group found.
The updated analysis of the loss in buying power — measured from January 2000 through February 2023 — improved from a 40% decline found in last year’s study. Yet the slightly improved 36% loss in buying power is still one of the deepest losses recorded, according to the group’s analysis.
Eggs also topped the list of fastest-growing costs for seniors since 2000. Other categories in the top five include prescription drugs, heating oil, dental services and Medicare Part B premiums.
One caveat to a record high cost-of-living adjustment this year is the extra money — estimated to be more than $140 per month — may help prompt higher levels of spending among older Americans, according to research from Bank of America Institute.
While higher spending may complicate the fight against higher inflation, it is delayed relief for older Americans, whose cost-of-living adjustment was lower than price growth in 2022.
“The average retiree has found living with these high rates of inflation extremely difficult,” David Tinsley, senior economist at Bank of America Institute, previously told CNBC.com. More