Social Security beneficiaries received some important news this year – their benefits will rise by 3.2% in January. This cost-of-living adjustment (COLA) brings the average retirement benefit up by about $50 per month.
While any extra income is welcomed, this year’s increase falls short compared to last year’s 8.7% hike, which was aimed at tackling inflation.
Although inflation remains stubborn, seniors can still explore several strategies to enhance their financial well-being in 2024. With high-interest rates on savings products, it’s now more crucial than ever to make smart financial decisions.
Here are a few easy ways seniors can grow their money while taking advantage of the current economic climate.
1. Open a Certificate of Deposit (CD)
A Certificate of Deposit, commonly known as a CD, is an excellent way for seniors to grow their money without much risk.
With current CD interest rates reaching as high as 5.5% or more, especially when dealing with online lenders, seniors can see significant returns. In some cases, you might even find a CD offering a 7% Annual Percentage Yield (APY). This option allows you to grow your money safely over time.
However, it’s important to choose a CD term that you’re comfortable with. CDs typically come with penalties for early withdrawals, meaning if you need to access your funds before the term is over, you might forfeit some or all of the interest earned.
2. Consider a High-Yield Savings Account
For seniors who want to grow their money but still need easy access to their funds, high-yield savings accounts are another great option. These accounts currently offer interest rates as high as 6%, which can significantly boost your savings.
Unlike CDs, high-yield savings accounts do not require you to lock your money away for a set period, making them a more flexible option.
It’s worth noting, though, that these interest rates can fluctuate. If rates fall in 2024, the amount of interest you earn may decrease as well. That’s why it’s a good idea to take advantage of these higher rates now while they’re still available.
3. Review Your Monthly Budget
Another effective way seniors can improve their financial situation is by reviewing their monthly budget. If it’s been a while since you’ve taken a close look at your expenses, you might be surprised at how many opportunities you can find to save money.
Look at your investments, bills, and other expenses – there may be ways to cut costs, especially in areas like credit card debt or healthcare.
For example, if you’re paying too much for healthcare costs not covered by Medicare, exploring Medicare supplemental insurance or long-term care insurance might be worthwhile. These types of insurance can help cover gaps in healthcare expenses, saving you money in the long run.
Additionally, switching from credit card payments to cash payments could help you avoid high credit card interest rates.
Must Read: Which States Offer the Highest Social Security Payments? Compare Monthly Benefits Now!
Summary
While the 3.2% Social Security increase may not seem like much compared to last year’s adjustment, it’s still a positive change. More importantly, there are plenty of other ways seniors can boost their finances.
By opening a CD or high-yield savings account, reviewing your budget, and exploring insurance options, you can ensure your money is working harder for you. Take advantage of today’s high-interest rates and review your expenses to stay financially secure in 2024.
Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.