If you’re feeling whiplash from all the recent money headlines, you’re not alone. As someone in my late 50s, I’m watching the same mix you are: Social Security changes, shifting interest rates, and that nagging question—“Are we really going to be OK in retirement?”
Let’s walk through the big recent news, then talk about what to actually do about it for your budget, your retirement prep, and your family.
1. Social Security COLA for 2026: Raise Coming, But It May Not Feel Like One
The Social Security Administration has set the 2026 cost-of-living adjustment (COLA) at 2.8%, which works out to roughly $56 more per month for the average retired worker starting in January.
AARP’s response was basically: “Helpful, but not enough.” Their research this fall found:
- Only about 1 in 5 adults 50+ thinks a roughly 3% COLA is enough to keep up with rising prices.
- Around 77% say it’s not sufficient, and most say they’d need closer to 5% or more to really feel caught up.
What this means for you
If you’re already retired, don’t assume the COLA will “take care of” inflation. It’s a small bump, not a raise you can spend freely.
If you’re in your 50s or early 60s, this is another reminder: Social Security is a foundation, not a complete retirement plan.
Practical move:
Before the new benefit hits in early 2026, sit down and:
- Compare this year’s monthly benefit to your expected 2026 benefit (current amount × 1.028).
- Decide now where that extra ~$50–$60 will go:
- Cover higher groceries and utilities?
- Boost a small emergency fund?
- Help with Medicare premiums or prescriptions?
If you don’t give that increase a job, it has a way of disappearing.
2. Inflation: “Better” But Still Biting Where It Hurts
Overall inflation has cooled from the worst of the last few years, but it’s not gone. The Bureau of Labor Statistics reported that consumer prices were up about 2.9% over the year ending August 2025, with food up around 3.2% and “core” prices (excluding food and energy) up just over 3%.
So on paper, that 2.8% COLA “matches” recent inflation. In real life, many of us still feel squeezed because:
- Food prices haven’t really gone back down; they’ve just stopped rising as fast.
- Shelter and some services (like medical care) are still growing faster than overall inflation.
Practical move: Three-month price reality check
For the next 3 months, track only a few categories:
- Groceries
- Utilities
- Gas/transportation
- Medical/medications
- Housing (rent, mortgage, taxes, insurance)
Compare what you spent this fall to what you spent a year ago. That’s your personal inflation rate—and it’s what matters for your household budget.
3. Interest Rates: Mortgage Relief, Savings Headwinds
Mortgage rates drifting down, not back to “the good old days”
After the Federal Reserve’s recent rate cuts, mortgage rates have pulled back from their peaks. A recent NerdWallet snapshot shows average 30‑year fixed mortgage rates around 6.1–6.2%, down noticeably from where they were a year ago, though still well above the ultra‑low rates we saw in 2020–2021.
If you bought or refinanced when rates were in the 7–8% range, this matters.
Practical move (for homeowners):
If your mortgage rate starts with a 7 or 8, it’s worth:
- Getting 1–2 quotes from lenders or a broker.
- Running the numbers on a refinance to ~6%:
- Does the monthly savings justify the closing costs within 3–5 years?
- Will you stay in the home long enough to benefit?
Don’t refinance just because rates are in the news—refi because the math works for your timeline.
Savings accounts: quiet pay cuts
Falling rates don’t just affect borrowers; they hit savers too. NerdWallet’s tracking of online savings accounts shows yields at major online banks have slid from the 4% neighborhood down into the low‑3% range over the course of 2024–2025 as the Fed has eased.
In other words, your “high-yield” savings may not be as high-yield as it was a year ago.
Practical move (for cash savers):
- Log in to your savings account and check your current APY.
- Compare it to:
- Other reputable online banks.
- Short‑term CDs (6–18 months).
- Consider using:
- A ladder of CDs (so all your cash isn’t locked up).
- Keeping 3–6 months of expenses in liquid savings, with any extra in slightly higher‑yield options.
4. I Bonds: A Quiet Option for Inflation‑Sensitive Savings
With inflation moderating, I Bonds aren’t as headline‑grabbing as they were in 2022, but they’re still worth a look. NerdWallet notes that Series I savings bonds are currently offering a composite rate of 4.03% through April 30, 2026, combining a fixed rate and the current inflation adjustment.
They’re not right for everyone, but they can be useful for:
- Money you don’t need for at least a year (you can’t cash them in before then).
- Folks who want federal tax deferral and protection against future inflation spikes.
Practical move (for cautious savers):
If your emergency fund is solid and you’re sitting on extra cash earning next to nothing:
- Talk to your tax or financial advisor about whether putting a small slice (not all) into I Bonds makes sense for your situation, especially if you’re a conservative saver who hates watching inflation nibble away at your money.
5. Retirement Confidence: Many Americans Are Worried – and Adjusting
Recent surveys paint a picture that lines up with what I hear from a lot of families:
- A Pew Research Center study this month found that only about 26% of U.S. adults feel “very” or “extremely” confident their income and assets will last through retirement. Around 4 in 10 aren’t confident or don’t think they’ll be able to retire at all, with uncertainty much higher among lower‑income households.
- A NerdWallet/Harris Poll survey found that 27% of Americans saved less than usual for retirement over the last 12 months because of inflation, and around 30% say their planned retirement age has shifted—some later, some earlier.
If you’ve pulled back on retirement contributions to keep up with everyday bills, you’re in crowded company.
6. Policy Changes You Should Know: Secure 2.0 & What’s Coming
The Secure 2.0 Act, passed in late 2022, is still rolling out new features that matter to those of us in our 50s and early 60s:
- Higher “catch-up” contributions for ages 60–63 starting in 2025
- For workplace plans like 401(k)s, the catch‑up limit for that age band will jump to the greater of $10,000 or 50% more than the regular catch‑up (NerdWallet estimates this at about $11,250 in 2025).
- Roth catch-up rule for high earners (2026)
- If you’re 50+ and earn more than $145,000 from one employer, your catch‑up contributions to that plan will have to be Roth (after‑tax) starting in 2026.
- Saver’s Match (2027)
- The old “saver’s credit” will be replaced with a federal match of up to $2,000 into your retirement account for qualifying lower‑income savers.
Practical move (for people in their 50s–early 60s):
If you’re still working, ask HR:
- “What is my current contribution rate?”
- “Am I using the catch‑up for 50+?”
- “Does our plan support Roth contributions if I’m a higher earner?”
Even nudging your contribution up 1–2 percentage points of your paycheck now can make a meaningful difference over the next 8–10 years.
7. How to Turn All This News Into a Simple Family Money Plan
Let me pull this together into a short checklist you can actually act on.
Step 1: Refresh your 2026 household budget
- Start with take‑home pay + Social Security + pensions.
- Add in the COLA bump (if you receive it) and any expected pay raises.
- Update your must‑pay expenses:
- Housing, taxes, insurance
- Utilities
- Groceries
- Transportation
- Debt payments (especially credit cards and car loans)
If the numbers don’t balance, adjust your discretionary categories (eating out, travel, subscriptions) before cutting retirement savings.
Step 2: Tidy up your debt strategy
- List all debts with:
- Balance
- Interest rate
- Monthly payment
- Focus on:
- Credit cards or loans above 10% interest.
- Any mortgage you might realistically refinance down from 7–8% to closer to 6% if the math works.
A simple approach:
- Make minimums on everything.
- Throw any extra at the highest‑rate debt.
- Once that’s gone, roll that payment into the next one (debt “snowball” or “avalanche” style).
Step 3: Protect your emergency fund—even if retirement saving slowed
If you had to pause or reduce retirement contributions this year to handle higher prices, try to:
- Protect at least one automatic contribution—even $50–$100 a month.
- Re‑aim any future pay raise or COLA:
- Half toward the budget,
- Half toward restoring retirement savings.
That way you don’t feel like you’re sacrificing everything, but your future self still gets a share.
Step 4: Have a family money conversation
Once or twice a year, especially when there’s a big news cycle like this, sit down as a couple or family and talk about:
- What’s worrying each of you (retirement, college, medical costs, helping parents or kids).
- What you can control this year (budget choices, savings rate, debt decisions).
- One or two small changes you’ll commit to for the next 6 months.
This doesn’t have to be a dramatic “Family Summit.” It can be a Saturday morning coffee chat at the kitchen table—pen, paper, a couple of recent statements, and a willingness to be honest.
Final thought
The headlines can make it feel like the ground is constantly shifting—COLAs that don’t feel like raises, rates that help your mortgage but hurt your savings, surveys saying most people are worried.
You don’t have to fix everything at once. But if you:
- Know what’s changing (Social Security, inflation, rates),
- Keep your budget grounded in today’s prices, and
- Take one or two concrete steps—like reviewing your mortgage, tuning up your savings, or nudging your retirement contributions—
you’re doing exactly what a thoughtful, financially wise household should be doing in late 2025.
If you’d like, tell me a bit about your situation (retired or still working, married or single, rough income range), and I can turn this into a customized checklist just for your household.