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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

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

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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.

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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

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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States sue Trump over rule limiting student loan forgiveness for public servants
How to navigate open enrollment as health insurance premiums increase
Many mutual fund strategies are launching as ETFs: What it means for investors
These inherited IRA mistakes could reduce your windfall, advisors say
Layoffs are mounting, making it a ‘challenging time to be unemployed’: expert
Why travel insurance may not protect you in the government shutdown
Student loan class action effort: Trump official, credit agencies hurt borrowers’ scores
Treasury Department: Series I bond rate of 4.03% through April 2026
Taxpayers may see ‘record tax refund season’ in 2026, analysts say
Millions face ‘huge sticker shock’ when ACA open enrollment starts Nov. 1
Here’s the maximum 2026 Social Security full retirement benefit, after 2.8% COLA
Student loan forgiveness for public servants to be limited under Trump
Democrats propose increasing VA, Social Security benefits by $200 a month
Adjustable-rate mortgages are ‘underappreciated,’ top advisor says
How the 2026 Social Security payroll tax cap could impact your paycheck
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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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More than any other generation, Gen Xers are falling short of their retirement savings goals.
Mounting financial pressures made it harder for the “sandwich generation” to save, according to an advisor on CNBC’s Financial Advisor 100 for 2025.
But there are some ways to get back on track.

Most working adults feel behind when it comes to their retirement savings.
But when broken down by generation, Gen Xers are the least financially prepared generation for retirement by nearly every measure, according to a new research paper by Alliance’s Retirement Income Institute.

“While Baby Boomers dominate the headlines, Generation X faces an even greater retirement crisis,” the authors wrote.
The so-called sandwich generation is the most likely to be supporting both children and aging parents at the same time, the paper found. They’ve experienced eight recessions over their lifetimes and witnessed soaring education, health care and housing costs. Many must now contend with large mortgage and car payments, along with student loan debt, while also balancing greater family responsibilities.
“We’ve held the traditional family values of our parents, but it has maybe robbed us of starting to save for retirement earlier than we might have,” said Ryan Sheffer, a financial adviser at Advance Capital Management in Southfield, Michigan, which is ranked No. 72 on this year’s CNBC Financial Advisor 100 list. 

Rethinking the ‘three-legged stool’

“There are some macro challenges and, of course, the micro challenges,” said Jason Fichtner, the Retirement Income Institute’s executive director and co-author of the report.
Gen X is the age group — roughly defined as those born between 1965 and 1980 — heavily impacted by the shift from defined benefit to defined contribution pensions, as workplace pensions became less common. Only 14% of Gen X workers have a traditional pension compared with 56% of boomers, according to the Retirement Income Institute.

These days, a successful retirement strategy entails “rethinking the three-legged stool of retirement planning,” Fichtner said, which traditionally included employer pensions, Social Security and personal savings. “Now that pension plan is your 401(k) and that has to generate additional protective income,” he said.

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At the same time, Social Security is running low on funding. The trust fund Social Security relies on to pay retirement benefits may be depleted in 2033, according to this year’s report by the Social Security Board of Trustees. At that point, 77% of those benefits will be payable, the trustees projected, unless Congress intervenes to shore up the program.
“I will be eligible for Social Security the year the trust fund is depleted,” said Fichtner, who is also a former deputy commissioner at the Social Security Administration appointed by President George W. Bush. “It becomes a personal issue as well.”

The risk of outliving your savings

Pixdeluxe | E+ | Getty Images

With fewer safety nets, Gen Xers are at a disadvantage, other reports also show.
As it stands, the typical Gen X household had just $40,000 in retirement savings, according to a 2023 report by the National Institute on Retirement Security.
Overall, 69% of Gen X workers said they were behind on their retirement savings, including 47% who said they were “significantly behind” — more than any other generation, according to a separate retirement report by Bankrate released last month.
“Looking across the generations and a variety of income levels, a key challenge for Americans and their retirement savings is to align their contributions with their realistic long-term needs,” Bankrate’s senior economic analyst, Mark Hamrick, said. 
Compared with 62% of boomers, only 41% of Gen Xers believe their savings will last for the duration of their retirement years, the Retirement Income Institute also found.
With less money set aside, having enough to last for the remainder of their lifetimes is a huge concern, Fichtner said. “Over half think they are going to run out.”

How to set a retirement savings goal

Most experts recommend consulting with a financial professional to get on track. They can help you set a realistic goal and determine the steps you need to take to meet it.
“Don’t be afraid to pick up the phone,” Sheffer said. Reaching out to a financial advisor who can “diagnose, analyze and prescribe” is a good first step.  
“Get a plan in place and work to achieve it,” he said. “The sooner the better.”

Too often, emotional “paralysis” prevents people from facing their financial reality, said Suzanne Norman, a director at the Retirement Income Institute who also co-authored the report.
“If you don’t know where you are, how do you know how to get where you are going?” she said.
There are still many options for those concerned about their retirement security, she added, including potentially working longer or pursuing a second act in retirement.
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New York Attorney General Letitia James and more than a dozen other state attorneys general on Monday sued the Trump administration over its new rule limiting eligibility for Public Service Loan Forgiveness.
The AGs’ lawsuit was prompted by the U.S. Department of Education’s final rule, released last week, that changes the definition of a “qualifying employer” under the loan relief program.
The rule will exclude certain organizations “that engage in unlawful activities” such as “supporting terrorism and aiding and abetting illegal immigration,” according to an Education Department statement.

New York Attorney General Letitia James stands silently during a press conference on October 21, 2025 in New York City.
Michael M. Santiago | Getty Images

New York Attorney General Letitia James and more than a dozen other state attorneys general on Monday sued the Trump administration over its new rule limiting eligibility for a popular student loan forgiveness program.
The AGs’ lawsuit, filed in Boston federal court, was prompted by the U.S. Department of Education’s final rule released last week. The rule changes the definition of a “qualifying employer” under the Public Service Loan Forgiveness program to exclude certain organizations “that engage in unlawful activities” such as “supporting terrorism and aiding and abetting illegal immigration,” according to an Education Department statement.

PSLF, signed into law in 2007 by George W. Bush, offers debt cancellation after a decade to borrowers who work for non-profits and the government.
“Public Service Loan Forgiveness was created as a promise to teachers, nurses, firefighters, and social workers that their service to our communities would be honored,” said Attorney General James in a statement.
“Instead, this administration has created a political loyalty test disguised as a regulation,” James said.
In an email to CNBC, Under Secretary of Education Nicholas Kent called the rule “commonsense reform.”

Read more CNBC personal finance coverage

More than 40 million Americans hold student loans, and the outstanding debt exceeds $1.6 trillion. Over 9 million borrowers may be eligible for PSLF, according to a 2022 estimate from Protect Borrowers, a nonprofit focused on student loans.

President Donald Trump has been a vocal critic of the Biden administration’s student loan forgiveness efforts, which included making it easier to qualify for PSLF. Under President Joe Biden, more than 1 million people had their debts cleared under the program, according to a 2024 White House fact sheet.
The lawsuit was brought by attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin and the District of Columbia.
A coalition of cities across the U.S, labor unions and nonprofit organizations also filed a lawsuit on Monday against the Trump administration over its PSLF rule.
“The Trump Administration’s illegal actions threaten to make higher education even more expensive for Boston’s teachers, first responders, and civil servants,” said Boston Mayor Michelle Wu in a statement. More

ETF Strategist

ETF Street
ETF Strategist

Asset managers are taking a variety of approaches to offer their mutual fund strategies as exchange-traded funds.
They seek to capitalize on ETF popularity in recent years.
ETFs are generally a better bet for many retail investors, especially those with taxable brokerage accounts, due to their tax-efficiency and lower costs relative to mutual funds, experts said.

damircudic | E+ | Getty Images

Asset managers are debuting more of their mutual fund strategies as exchange-traded funds, a move that seeks to capitalize on ETF popularity in recent years and also benefits many retail investors, according to market experts.
Money managers have taken a few approaches.

Many have converted specific mutual funds to ETFs. Fifty-six mutual funds were converted to ETFs in 2024, a number that has increased steadily from 15 in 2021, according to Morningstar data. Another 40 have done so this year.
Others have opened an ETF “clone” of a specific mutual fund, which allows investors to choose from the mutual fund or ETF version of an investment strategy.

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Additionally, more than 80 asset managers have sought permission from the Securities and Exchange Commission to launch an ETF share class of their existing mutual fund portfolios, said Bryan Armour, director of ETF and passive strategies research for North America at Morningstar.
This is a slightly different strategy from the others. Mutual funds are generally available in a variety of share classes; in this case, the ETF would be another share class and share the same portfolio as mutual fund investors.
“This is one of the biggest trends in the fund market right now,” Armour said. “Over the next two years, we’d expect a large number of ETF share classes to be used heavily.”

The SEC green-lit the first application, for Dimensional Fund Advisors, on Sept. 29.
“We’re sort of waiting for the next shoe to drop, and my guess is it would have happened were it not for the government shutdown,” Armour said, in reference to the SEC approving more applications.

ETF popularity

ETFs and mutual funds are broadly similar: They are relatively liquid baskets of stocks, bonds and other assets overseen by professional money managers, and can help investors diversify their portfolios.
Investors have shown a strong preference for ETFs in recent years.
Investors poured about $1.1 trillion into U.S. ETFs in 2024, a record high, according to Morningstar. Meanwhile, investors withdrew $388 billion from U.S. mutual funds.
ETF assets still account for just one-third or so of the total U.S. fund market, but are gaining ground: They had a 14% market share relative to mutual funds at the end of 2014 and a 5% share in 2004, for example, according to Morningstar.

That popularity is mainly due to key differences that many financial advisors say make ETFs a generally better financial choice for retail investors.
Exchange-traded funds are generally more tax-efficient, thereby saving investors from surprise annual tax bills on capital gains distributions, and tend to have lower annual fees than mutual funds, according to certified financial planner Blake Pinyan, a senior financial planner and tax manager at Anchor Bay Capital in Carlsbad, California.
ETF holdings are also more transparent for investors, Armour said. Asset managers must disclose their ETF holdings every day, while mutual funds typically do so on a monthly or quarterly basis.
“ETFs have become so much more prominent in the market,” Armour said. “At a high level, asset managers are trying to capitalize on demand,” he added.

How to decide: ETF or mutual fund?

D3sign | Moment | Getty Images

Investors who have taxable brokerage accounts should generally aim to hold ETFs in such accounts, due to their tax efficiency, Pinyan said.
“Avoid mutual funds in taxable accounts,” said Pinyan, who is a member of CNBC’s Financial Advisor Council. “Having a mutual fund in a taxable brokerage account could result in the investor paying a lot more in tax liability. They’re very tax-inefficient.”
Exchange-traded funds aren’t necessarily better in all circumstances, though, experts said.
For example, an ETF’s tax benefits are moot in tax-preferred accounts like IRAs and in 401(k) plans, experts said.

This is one of the biggest trends in the fund market right now.

Bryan Armour
director of ETF and passive strategies research for North America at Morningstar

Additionally, investors should pay attention to whether an ETF “clone” of an actively managed mutual-fund strategy is an “identical twin” or a “cousin,” wrote Gregg Wolper, a senior manager research analyst of equity strategies for Morningstar Research Services.
In other words, an ETF portfolio that’s a “cousin” may be similar but not identical to the same manager’s mutual fund, he wrote, and therefore may not be well-suited to all investors depending on preferences.
If the SEC approves more applications for asset managers to launch their mutual funds in an ETF share, it could come with a potential drawback for some ETF investors: shared tax exposure with mutual-fund shareholders, according to a Morningstar analysis published in October.
That could dilute some of the relative tax benefits for ETF investors, though such an occurrence would likely be rare, it said.
“Certain situations, often prompted by the actions of investors in the mutual fund, can leave investors in the ETF share class on the hook for capital gains distributions,” it said. More

The Valero Energy refinery in Texas City, Texas.
F. Carter Smith | Bloomberg | Getty Images

The focus on dividend stocks is growing, as the U.S. Federal Reserve announced another rate cut. Investors can consider stocks that offer dividends and also have the potential to drive capital appreciation, enhancing the total return.
In this regard, recommendations of top Wall Street analysts can help us identify stocks that have solid upside and pay attractive dividends. The stock picks of these experts are backed by in-depth analysis of a company’s growth opportunities and ability to pay dividends consistently.

Here are three dividend-paying stocks, highlighted by Wall Street’s top pros, as tracked by TipRanks, a platform that ranks analysts based on their past performance.

Valero Energy

We start this week with Valero Energy (VLO), a manufacturer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. In Q3 2025, Valero returned $1.3 billion to stockholders via $351 million in dividends and $931 million in share repurchases. On Oct. 29, Valero declared a quarterly dividend of $1.13 per share. At an annualized dividend of $4.52, VLO stock offers a yield of 2.7%.
Valero Energy recently reported upbeat Q3 results, backed by strong refining margins. Keeping in view the Q3 performance, strong refining outlook, and the company’s attractive capital returns strategy, Goldman Sachs analyst Neil Mehta reiterated a buy rating on VLO stock and raised his price target to $197 from $180.
“We continue to view VLO as a key beneficiary of our more constructive refining outlook, given the company’s balance sheet strength, low-cost operations, and operational execution,” said Mehta.
The 5-star analyst noted that during the third-quarter earnings call, management discussed a constructive refining outlook, driven by limited net capacity additions and widening crude differentials. Mehta also highlighted that Valero’s non-refining businesses performed better than Goldman Sachs’ expectations. Looking ahead, Mehta believes that low inventories, resilient demand, and limited net refining capacity additions support tighter supply/demand expectations for 2026.

In particular, Mehta noted management’s continued focus on capital returns and commitment to allocating excess free cash flow to shareholders. The analyst expects a stronger refining backdrop to contribute to meaningful free cash flow generation, which could support about $4.6 billion of capital returns in 2026, implying a 9% capital return yield.
Mehta ranks No. 812 among more than 10,000 analysts tracked by TipRanks. His ratings have been profitable 58% of the time, delivering an average return of 8.7%.

Albertsons

We move on to the next dividend-paying stock, Albertsons Companies (ACI). The food and drug retailer recently announced upbeat results for the second quarter of fiscal 2025, driven by strong pharmacy sales and digital business. On October 14, Albertsons announced a quarterly dividend of 15 cents per share, payable on November 7. At an annualized dividend of 60 cents per share, ACI stock offers a dividend yield of 3.3%.
Following Albertsons’ better-than-expected fiscal second-quarter results, Tigress Financial analyst Ivan Feinseth reiterated a buy rating on ACI stock and modestly increased his price target to $29 from $28. The analyst is bullish on Albertsons as the company “accelerates growth through AI-powered digital sales, expanding loyalty ecosystem, and high-margin retail media platform.”
Feinseth highlighted that Albertsons is transforming from a traditional grocery operator into a data‑driven, digitally integrated food and wellness platform. This change is being fueled by the company’s e-commerce expansion, loyalty integration, and rapidly expanding Albertsons Media Collective advertising network, which Feinseth believes is well-positioned to become one of its most profitable long-term growth engines.
The top-rated analyst pointed out that ACI’s For U loyalty program is driving both digital engagement and spending growth. In fact, For U membership increased more than 13% year-over-year in Q2 FY25, reaching over 48 million active participants. The growing member base boosts ACI’s business as members transact more frequently, spend more, and are increasingly using cross-channel rewards, noted Feinseth.
Additionally, Feinseth highlighted that Albertsons is enhancing shareholder returns through ongoing dividend increases and share repurchases, including the recently announced additional $750 million accelerated share repurchase authorization. He expects ACI stock to deliver a total return of close to 50%, including dividends.
Feinseth ranks No. 296 among more than 10,000 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, delivering an average return of 14.2%.

Williams Companies

Finally, let’s look at energy infrastructure provider Williams Companies (WMB). On October 28, Williams announced a quarterly cash dividend of 50 cents per share, payable on December 29, 2025, and reflecting a 5.3% year-over-year increase. At an annualized dividend of $2 per share, WMB stock offers a 3.5% yield.
Ahead of Williams’ Q3 results scheduled after the market closes on November 3, RBC Capital analyst Elvira Scotto reiterated a buy rating on WMB stock with a price forecast of $75. In a preview on the Q3 results of the companies in the U.S. midstream space, Scotto stated that Williams and Targa Resources (TRGP) are her favored names into the earnings.
Scotto noted that the secular tailwind for natural gas due to rising power demand for electrification and artificial intelligence (AI)/data center growth is driving the need for more energy infrastructure. The 5-star analyst believes that among the stocks within her coverage, “WMB is best positioned to benefit given its gas transmission asset footprint and its Power Innovation projects.”
Furthermore, Scotto expects WMB to deliver a CAGR (compound annual growth rate) of about 10% in its EBITDA (earnings before interest, taxes, depreciation, and amortization) from 2025 through 2030. The analyst looks forward to additional information on WMB’s recently announced Power Innovation projects and any new projects. Scotto expects an uptick in Q3 2025 numbers on a quarter-over-quarter basis across all business segments, with Transmission, Gulf, and Power driving the biggest absolute increase.
Scotto views WMB’s February analyst day as the next catalyst for the stock. The analyst expects WMB to increase its EBITDA growth target from the range of 5% to 7% to high single digits or more.
Scotto ranks No. 270 among more than 10,000 analysts tracked by TipRanks. Her ratings have been successful 64% of the time, delivering an average return of 13.7%. More

If you’re a non-spouse heir, the rules for inherited IRAs are complicated, and mistakes can be costly, experts say.
Many accounts must be emptied within 10 years, and some heirs must start taking required minimum distributions in 2025 to avoid an IRS penalty.
Inherited IRA planning is important amid the “great wealth transfer,” with more than $100 trillion expected to change hands through 2048, according to Cerulli Associates.   

Juanma Hache | Moment | Getty Images

While many investors welcome a windfall, the rules for inherited individual retirement accounts are complicated — and mistakes can be costly.   
Since 2020, certain inherited accounts are subject to the “10-year rule,” and heirs must empty the balance by the 10th year after the original account owner’s death.  

Plus, some non-spouse beneficiaries, commonly adult children, must begin taking required minimum distributions, or RMDs, in 2025 over the 10-year period, or face a hefty IRS penalty. 
Inherited IRA planning is important amid the “great wealth transfer,” with more than $100 trillion expected to change hands through 2048, according to a December report from Cerulli Associates.   

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Stories for investors who are retired or are approaching retirement, and are interested in creating and managing a steady stream of income:

Here are three of the biggest inherited IRA mistakes and how to avoid them, according to financial advisors.

1. Not knowing the IRS rules

For non-spouse heirs, “the [inherited IRA] rules can get complex fast, and it’s critical to know your options,” said certified financial planner Brett Koeppel, founder of Eudaimonia Wealth in Buffalo, New York.
The “10-year rule” and new RMD requirement for 2025 apply to most non-spouse beneficiaries, such as adult children, if the original IRA owner reached RMD age before their death.

If you fail to take inherited IRA RMDs for 2025, you could be subject to a 25% IRS penalty on the amount you should have withdrawn. However, you could reduce that fee to 10% by disbursing the correct amount within two years and filing Form 5329. In some cases, the IRS may waive the penalty entirely.

2. Not planning for ‘significant taxes’

If you inherit a pretax IRA, you can expect to pay regular income taxes on withdrawals, which may require tax planning during the 10-year drawdown, experts say.
Some heirs aim to take only their RMD for the first nine years and a lump sum in year 10. But this could mean “significant taxes in that final year of distribution,” said CFP John Nowak, founder of Alo Financial Planning in Mount Prospect, Illinois. He is also a certified public accountant.
Instead, you should run multi-year tax projections to decide the best withdrawal amounts for each year, experts say. For example, it might make sense to accelerate distributions during temporary lower-income years.

3. Keeping the same investments

Another common mistake is failing to change inherited IRA assets, according to CFP Jamie Bosse, a senior advisor at CGN Advisors in Manhattan, Kansas.
Ideally, the investments should match your risk tolerance, goals and timeline. “It’s your money now and should be allocated according to your needs,” she said.
However, when choosing investments, you need to weigh your tax liability, yearly RMD and income needs, said Nowak with Alo Financial Planning.
For example, holding certificates of deposit in your IRA with a maturity date beyond your RMD window could be “difficult or costly to distribute,” he said. More