Social Security Is Getting a Raise Next Year. Here’s What That Means for the Average Recipient

Though Social Security plays a pivotal role in helping seniors pay the bills, many retirees continue having a difficult time keeping up. Most seniors, therefore, will be happy to learn that Social Security is about to get a sizable raise. The cost-of-living adjustment, or COLA, for 2019 will be set at 2.8%.

This translates into about $40 more per month for the average beneficiary. And while that’s certainly better than nothing, it’s hardly a life-changing sum for those who are already struggling.

Social Security’s shortcomings

There’s a common misconception about Social Security, and it’s that those monthly benefits alone are enough to sustain seniors. The reality, however, is that Social Security will only replace about 40% of the typical worker’s pre-retirement income. For above-average earners, it will replace an even smaller percentage. Most seniors, meanwhile, need closer to 80% of their previous earnings to maintain a reasonably comfortable lifestyle in retirement. Therefore, those benefits alone don’t do the trick.

Pile of Social Security cards

IMAGE SOURCE: GETTY IMAGES.

Furthermore, despite the fact that the upcoming COLA is the most generous one in recent years, COLAs, in general, have been doing a poor job of keeping up with inflation — despite the fact that they were introduced for the key purpose of helping seniors keep pace with it. In fact, since 2000, Social Security recipients have lost 34% of their buying power, or so reports the Senior Citizens League. Therefore, while it’s encouraging to see a sizable COLA going into 2019, those who rely on Social Security for the bulk of their income should actively take steps to better manage their finances rather than sit back and wait for an extra $40 a month.

Give yourself a raise

While an extra $480 a year is hardly meaningless, it’s also not enough to spell the difference between struggling financially and living a life devoid of financial worries. If you’d rather get closer to the latter, take steps to give yourself a raise.

First, take a long, hard look at your budget and find ways to cut back on expenses you really can’t afford. That could mean selling your home if it’s costly to maintain, downsizing your rental unit to a smaller space, or relocating to a less expensive part of the country where your benefits will go further. Or it could mean making a series of smaller changes, like cutting back on restaurant meals, getting a cheaper cable plan, or canceling a gym membership you rarely use. Chances are, all of these changes will put more than $40 a month back in your pocket.

Next, look into working in some capacity. Retirement is actually a great time to start a business, so if the idea of stocking shelves at the local grocery store to earn money doesn’t appeal to you, do something you’ll actually enjoy.

A relatively substantial Social Security raise is certainly nothing to scoff at. At the same time, don’t use that incoming boost as an excuse not to take financial matters into your own hands. Chances are, you have the ability to make lifestyle changes that will work wonders for your bank account — regardless of the extra money Social Security gives you next year.

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Sears, Once America’s Biggest Store, Collapses Into Bankruptcy

For much of the 20th century, Sears Holdings Corp. defined American retailing with catalogs and department stores that brought toys, tools and appliances to millions of homes.

By the time Sears limped into bankruptcy on Monday, the once-great company was shriveled and sickly. Decades earlier, it had been dethroned by Walmart Inc. as the biggest…

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‘Thank You, Sears, for Being There When No One Else Was’

Sears Holdings Corp., once famous for its catalogs and prized for the variety of items it sold, served as the go-to store, an employer and a wish book to billions throughout its 125-year history. The Wall Street Journal asked readers who shopped or worked at Sears to share their favorite memories from the once-dominant American retailer. Here is what they wrote:

Shopping with Family Members

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Dow Futures Tumble as Saudi Tensions, Trade Concerns Keep Investors Cautious

The Monday Market Minute

  • Global stocks weaken as geopolitical and trade tensions keep investors cautious following last week’s selling on Wall Street.
  • Saudi Arabia has vowed to react to any punishment meted out following the disappearance of prominent journalist Jamal Khashoggi in Turkey last week.
  • Japanese stocks tumble amid concern the U.S. could use currency manipulation rules in future trade agreements as Tokyo negotiates a new deal with Washington
  • U.S. stocks set for more red at the open, with the Dow indicated 200 points lower at the bell and investors looking for Q3 earnings from Bank of America. 

Market Snapshot

Global markets weakened Monday as investors took a cautious stance on stocks amid escalating tensions between Washington and Riyadh over the death of a prominent Saudi journalist in Turkey last month as well as renewed concerns for trade disputes between the U.S. and its major economic partners.

Jamal Khashoggi’s disappearance last month, following a visit to the Saudi consulate in Istanbul on September 28, has sparked both an international murder investigation and a sharp response from the White House, with President Donald Trump threatening “severe” consequences in the Saudi government were to be deemed responsible. 

The tensions slammed shares in Riyadh Monday, with the benchmark Tadawul All Share Index falling more than 3.5% Sunday, sending ripples of concern through markets all around the world and pulling Brent crude prices higher following last week’s sell-off amid the turmoil on Wall Street. 

U.S. equity futures indicated a weak opening on Wall Street Monday, with contracts tied to the Dow Jones Industrial Average suggesting a 100 point decline and those liked to the broader S&P 500 marked 13 points to the downside amid the ‘risk-off’ sentiment. Nasdaq Composite futures were indicated 50points lower.

Markets in Asia were also rattled by the tensions, as well as comments over the weekend from U.S. Treasury Secretary Steve Mnuchin, who told the IMF’s annual meeting in Bali that his department would like to use language to prevent current manipulation into any new U.S. trade deals.

The comments hit markets in Japan, which is currently negotiating a new agreement with the U.S, with the Nikkei falling 1.87% to close at 22,271.30 pionts while the broader MSCI Asia ex-Japan index was marked 1.1% lower heading into the final hours of trading.

Stock slump resumes in Asia after only short lived stabilization. Risk-Off mood returned following a weekend of warnings on global econ fragility from annual IMF gathering and rising oil prices on US-Saudi tensions. Pound slipped as no Brexit deal reached. Most EM currencies dip. pic.twitter.com/bRjmsF3Sgu

— Holger Zschaepitz (@Schuldensuehner) October 15, 2018

European stocks were softer at the open, as well, with the Stoxx 600 falling past a 22- month low by mid-morning in Frankfurt before paring the decline to around 0.2% as investors await the formal filing of Italy’s 2019 budget to the European Commission and the ongoing uncertainty of Brexit negotiations, following a weekend of 11th-hour talks ahead of Wednesday’s EU Summit that is expected to reach at least a partial conclusion on Britain’ future relationship with the bloc.

Electrolux AB (ELUXY) was an early mover of note, with shares in the home appliance manufacturer falling 2% in Stockholm after the Chapter 11 bankruptcy filing of Sears Holding (SHLD) in the United States late Sunday. Electrolux said around 10% of its annual revenues are earned via its association with Sears, but noted that it’s been making contingency plans since the retailer’s financial concerns became apparent earlier this year. 

Oil prices resumed their gains following last week’s sell-off amid the tensions in Riyadh and the looming U.S. sanctions on the sale of Iranian crude, which come in to force in just over two weeks.

Brent crude contracts for December delivery, the global benchmark, were seen 92 cents higher from their Friday close in New York and changing hands at $81.35 per barrel while WTI contracts for November delivery, which are more tightly liked to U.S gas prices, were seen 60 cents higher at $71.94 per barrel.

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MARKETS LIVE: Sensex flat in volatile trade, Nifty nears 10500; IT gains

Benchmark indices Sensex and Nifty ended Monday’s session on a positive note led by buying in pharma and IT counters. The S&P BSE Sensex gained 132 points to settle at 34,865 while NSE’s Nifty50 index closed at 10,512.50, up 40 points. It was the second consecutive day that the stocks ended in the green. 

However, gains were capped as rising oil prices, weakening rupee and rising inflation dampened investor sentiment amid weak Asian cues.

Asian shares slipped as worries over Sino-US trade disputes, a possible slowdown in the Chinese economy and higher US borrowing costs tempered optimism despite a rebound in global equities late last week.

Back home, the rupee opened weak, at 73.80/$ against its previous close of 73.57. During the trade, it slipped further and once again breached 74 levels. The domestic unit had hit a fresh low of Rs 74.48 per dollar on Friday. Going forward, any negative moves on the back of a strengthening dollar or rising crude is likely to strain the rupee as well.

The WPI Inflation for September rose to a two-month high of 5.13 per cent, mainly due to the hardening of food prices and the rise in the cost of petrol and diesel.

Among individual stocks, HUL fell over 4 per cent after the FMCG major reported a 19.5 per cent year-on-year growth in standalone profit to Rs 15.25 billion. The stock ended Rs 1,526.60 apiece on BSE, down 3 per cent. 

Avenue Supermarts ended 6 per cent lower at Rs 1,333 after the company after margin disappointment in the second quarter of the current financial year 2018-19 (Q2FY19).
 

Among sectoral indices, shares of pharmaceutical companies advanced in an otherwise subdued market with Nifty Pharma index gaining over 2%.

Dr. Reddy’s Laboratories, Lupin, and Biocon from the index were up in the range of 3% to 5%, while, Sun Pharmaceutical Industries, Cipla, Glenmark Pharmaceuticals, Cadila Healthcare, Aurobindo Pharma and Divi’s Laboratories up between 1% and 2% on the NSE.

IT stocks too rose in the trade. IT major Infosys ended nearly 4 per cent higher at Rs 703.30 apiece on BSE ahead of its Q2 results, due on Tuesday.  

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